Rationale for not applying a fixed Medisave Minimum Sum by cohort

29 January 2015

Question No. 462

Name and Constituency of Member of Parliament

Mr Baey Yam Keng
MP for Tampines GRC

Question:

To ask the Minister for Health what is the rationale for not applying a fixed Medisave Minimum Sum by cohort, similar to the Minimum Sum for the Ordinary Account.

Answer: 

1    The Medisave Minimum Sum, or MMS, is the amount a CPF member needs to set aside in his Medisave account to ensure adequate savings for his own and his dependants’ healthcare expenses, including MediShield and ElderShield premiums, during old age.

2    The MMS needs to be adjusted yearly for healthcare inflation. With Singaporeans living longer and Medisave use regularly expanded, we must also review the MMS regularly to more accurately reflect how much elderly Singaporeans need for their healthcare expenses in retirement. To help Singaporeans save more, the Government has also helped to top up Medisave accounts through GST Vouchers and Workfare, and increased employers’ Medisave contributions by one percentage point from the start of this year.

3    Last year, the Government appointed a CPF Advisory Panel to study ways to improve the CPF system to provide greater peace of mind and flexibility for Singaporeans in retirement. My Ministry will review the MMS, taking into consideration the healthcare needs of our current and future elderly and the broader changes to the CPF system. We will provide more details when our review is completed.