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The advent of the Covid-19 pandemic has made even more obvious the problems faced by our elderly and retirees and, by extension, the financial burden placed on the younger working generations.
Poverty among the elderly in Singapore is significant. Much of this is the consequence of the PAP depriving our retirees of their CPF savings.
The CPF, originally intended as a pension savings scheme, have been allowed to be used, among other things, to service housing loans and to pay for Medisave. This has resulted in insufficient funds for retirement.
In addition, the funds have been withheld when a member turns 55, a breach of the original promise under the CPF Act.
It is clear that poverty among retirees is the result not so much through profligate spending or the negligence in financial planning but rather through the state siphoning off these funds.
As a result, children and relatives of the elderly have to provide financial support. The 2019 Household Expenditure Survey found that the working children of retiree households contribute nearly $500 per month towards their income. This contrasts with the average CPF payout of only $280 a month.
Such a situation places extra burden on the retirees’ children who are already under great financial pressure to take care of their own families.
SDP’s proposal: Retirement Income Scheme for the Elderly (RISE)
Under the SDP’s plan, Singapore citizens 65 and older who are in the bottom 80 percent of wage earners, will be guaranteed a basic income of $500 a month.
This sum will replace the amount that workers contribute to their retired parents’ monthly income.
Researchers have noted that a Singaporean retiree needs $1,379 a month to meet basic living standards. RISE will help to partially meet his/her needs.
There are three main advantages of RISE:
One, it is enacted through legislation which means that income of Singaporean retirees is guaranteed and stable. This will give our elderly peace of mind. At the moment, financial packages like the Pioneer and Merdeka Generation Packages ad hoc and do not allow for planning for the duration of one’s retirement years.
Two, it is paid to all poorer retirees unlike the PG and MG packages which are given only to certain cohorts of Singaporeans. Also, RISE is paid in ready cash whereas MG and PG packages come in the form of mainly Medisave top-ups.
Three, RISE will relieve working Singaporeans of the pressure from having to financially support their elderly parents.
In the aftermath of the Covid-19 pandemic, it is important that our elderly continue to live in security, not poverty. And as mentioned, working adults, the sandwiched generation, should not be further burdened by having to take care of their children as well as retired parents.
RISE is part of the 4Y1N campaign: Four ‘YES’ to suspension of GST, retrenchment benefits, retirement income, putting people first and one ‘NO’ to a 10 million population.
This is the SDP’s campaign message in the coming GE. To reach out more effectively to the electorate, the SDP has prepared a series of videos on the subject in the four official languages and three dialects (Hokkien, Teochew and Cantonese) which will be posted on our social media platforms shortly.