Steady Income for LIFE

Few years ago, I met a senior at Chinatown Hawker Centre.., I remebered mentioning this... "Now we own the roof over our head, later, this roof will not be ours." This has come to pass...


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IN a bid to help low-income elderly Singaporeans unlock their flats' values, the Minister for National Development Mah Bow Tan unveiled more details about the HDB Lease BuyBack Scheme (LBS) during Budget 2008 yesterday.

Some 25,000 households, or 70 per cent of two-and three-room flat owners will benefit from it. Under this scheme, HDB will purchase the tail-end of the flat's lease from the home-owner. The value will depend on market conditions.

The flat will then be left with a 30-year lease, which the home-owner will continue to live in. For example, if you live in a three-room flat (with a 70-year lease) valued at $200,000, you will get $97,000.

This sum will include $87,000 for 40 years of your flat's lease and a $10,000 government subsidy.Of this, $92,000 will go to the purchase of the CPF Life Plan and $5,000 will be paid out to you in cash.

The CPF Life Plan will pay you about $490 a month for the rest of your life.

The LBS is not the only way you can unlock the value of your flat.

There's also the NTUC Income's reverse mortgage plan, which allows you to borrow against the value of your flat and receive a cash advance from them, either in a lump sum or a series of regular payouts.

The loan is repayable when the property is sold, usually upon the death of the borrower or expiry of the mortgage tenure.


AT LEAST 62 YEARS OLD

To qualify for the LBS, you must be at least 62, live in a three-room or smaller flat, and earn less than $3,000 a month.

While some we spoke to liked this option, others thought the estimated payout was too little to keep up with rising living costs.



This article was first published by The New Paper on Feb 29, 2008.