1. Singapore’s population is ageing, and more Singaporeans will need long-term care as they grow old. A stronger long-term care financing system supported by government subsidies, insurance, personal savings and family support provides Singaporeans greater assurance that they can afford aged care services for themselves and their loved ones.
2. The Government has announced that it will further strengthen long-term care financing, through a comprehensive package of measures:
- The Government will introduce CareShield Life, a new long-term care insurance scheme, and provide premium support and incentives for Singaporeans to join the scheme.
- The Government will allow MediSave withdrawals in cash to support long-term care needs and expenses.
- The Government will set up ElderFund, a new assistance scheme for lower-income Singaporeans who are severely disabled and who need additional support for their long-term care needs.
3. To be implemented from 2020, the measures are part of our key social policies to strengthen social risk-pooling, facilitate the use of personal and family savings, and provide an additional safety net for long-term care expenses.
CareShield Life
4. In May 2018, the Government accepted the ElderShield Review Committee’s recommendations to introduce the new CareShield Life scheme. CareShield Life will provide better protection, through lifetime payouts that last as long as policyholders are severely disabled[1]. Starting payouts will be significantly higher than ElderShield at $600 per month, and will increase over time.
5. To ensure that premiums are affordable and that no Singaporean loses CareShield Life coverage due to financial difficulties, CareShield Life will have the following features:
- Use of MediSave for Premiums. Singaporeans will be able to use their MediSave to pay for all of their CareShield Life premiums and that of their immediate family members.
- Permanent Means-tested Subsidies. The Government will provide permanent means-tested subsidies for lower-to middle-income Singapore Resident policyholders. Up to two-thirds of households will be eligible for CareShield Life premium subsidies of up to 30%.
- Additional Premium Support. Singapore Citizens in financial need who are unable to pay for their premiums even after the premium subsidies can apply for Additional Premium Support from the Government.
A summary of CareShield Life is at Annex A.
Universal CareShield Life Coverage for Future Cohorts
6. Future cohorts of Singaporeans[2] will join CareShield Life from 2020 onwards. Those aged 30 to 40 in 2020[3] will be the first cohorts to join the scheme. Subsequent future cohorts will join the scheme when they reach the age of 30.
7. Transitional Subsidies will be provided for all future cohorts of Singapore Citizens for the first five years of scheme implementation, from 2020 to 2024.
Encouraging Existing Cohorts to Join CareShield Life
8. Existing cohorts of Singaporeans[4] are encouraged to join CareShield Life from 2021 if they are not severely disabled, but it will remain optional for them. The Government will provide Participation Incentives of up to $2,500 to all Singapore Citizens from existing cohorts who join CareShield Life in the first two years from 2021.
9. More details on the Permanent Means-Tested Subsidies, Transitional Subsidies for future cohorts, and Participation Incentives for existing cohorts are provided at Annex B.
10. Annex C provides illustrations of the estimated premiums, net of subsidies and incentives, for different Singaporeans from existing cohorts, when they join the scheme in 2021.
11. To make joining CareShield Life more convenient, Singapore Residents born in 1970 to 1979 will be auto-enrolled in CareShield Life in 2021, if they are insured under the ElderShield 400 scheme and are not severely disabled. If they do not wish to participate in the scheme, they have up to 31 Dec 2023 to opt out from the scheme and have their CareShield Life premiums refunded.
MediSave Withdrawals for Long-term Care
12. In addition to insurance, personal and family savings are an important source of funding for long-term care needs. From 2020, severely disabled Singapore Residents aged 30 and above will be able to tap on their own or their spouse’s MediSave for their long-term care needs.
13. After setting aside a minimum amount to ensure adequacy for other medical expenses, they can withdraw up to $2,400 per year (i.e. $200 per month) in cash to supplement their long-term care needs. Details on MediSave withdrawals for long-term care are at Annex D.
ElderFund
14. The Government will also introduce an ElderFund scheme in 2020 to assist lower-income Singapore Citizens aged 30 and above, who are severely disabled and need additional financial support for long-term care.
15. Eligible Singapore Citizens can receive up to $250 per month in cash. There will be no cap on payout duration. More details on how to apply for this scheme will be available closer to 2020.
16. ElderFund will benefit those who are not able to join CareShield Life, or have low MediSave balances and inadequate personal savings to meet their long-term care needs. Examples are shown at Annex E.
Strengthening Long-term Care Financing for All Singaporeans
17. Commenting on the measures, Minister for Health Mr Gan Kim Yong said “Ensuring affordable, accessible and inclusive long-term care is a challenge for all ageing societies. This package of measures, including social risk-pooling through CareShield Life, government subsidies and assistance, community support, and personal and family savings, reflects our vision to nurture an inclusive society where all of us come together to support Singaporeans for their long-term care needs and provide them with greater assurance and peace of mind.”
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Annex A
Annex B
Annex C
Annex D
Annex E
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[1] Severe disability is defined as being unable to perform three or more Activities of Daily Living (ADLs).
[2] Singapore Residents born in 1980 or later.
[3] Singapore Residents born in 1980 to 1990.
[4] Singapore Residents born in 1979 or earlier.
[5] Other groups that may also need to pay a catch-up component include ESH 400 policyholders who opted out when they were auto-enrolled and then opted back in later, those who join after 2021, and policyholders whose policies became paid-up, i.e. their policies lapsed after a minimum number of years of premium payment, which qualifies them for a lower payout amount.