Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Wednesday, 10 June 2015

The new Medisave Sum - Basic Healthcare Sum

23:26 Posted by cheez 3 comments
Today's post will be on the new Medisave Sum, aka: Basic Healthcare Sum (BHS).
We will be sharing about the difference between the 2 schemes.

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The current scheme "Medisave Minimum Sum (MMS)", will be replaced by the new scheme "Basic Healthcare Sum (BHS)".
We briefly summarised the similarity and difference between the 2 schemes.

Similarity
Contribution rates into Medisave Account remains the same as before
Increases almost every year, and will continue to increase in the future
Amount in excess of the 'required amount to be set aside' can be withdrawn (age 55 & above)
Amount in excess of the 'required amount to be set aside' will be transferred to SA or OA*
*Excess money will be transferred to OA instead of SA if SA has meet the prevailing Retirement Sum.


Differences
Topic Medisave Minimum Sum (MMS) Basic Healthcare Sum (BHS)
Top ups If you did not meet the MMS, you need to top up money into your MA until you hit the prevailing year's MMS before you can withdraw any money out of your CPFIf you do not meet the BHS, you do not need to top up money into your MA before you can withdraw money out of your CPF
Starting/ Ending Date End on 31 December 2015. However, you now have the option to not top up your MA to the MMS amount Start on 1 January 2016
Age Amount is Fixed NA. You will be pegged to the prevailing year's MMS when you are making your withdrawal 65. Upon reaching 65, your BHS is fixed at that year's prevailing sum
Maximum amount kept in MA $48,500 is the maximum amount you can retain in your MA for year 2015 $49,800 will be the maximum amount you can retain in your MA starting from 1 Jan 2016
Minimum amount kept in MA $43,500 is the minimum amount you must have in your MA for year 2015 before you withdraw any money out $49,800 will be the minimum amount you must have starting from 1 Jan 2016 should you wish to withdraw any money out

We understand that this might not be all comprehensive about the new scheme.
I believe there are more points that we can talk about that we have not yet discovered.
However, we hope that this would be able to show the changes made in the new scheme against the old as well as raise interest about this new scheme.
We would love to see you give us some feedback as to what else can be added or what information did we posted wrongly.
We would also like to know about your views and comments regarding this new scheme.
So feel free to comment and email us!

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3 comments:

  1. "$49,800 will be the minimum amount you must have starting from 1 Jan 2016 should you wish to withdraw any money out"
    If did not meet the minimum amount, then need to top up before one can withdraw money out of cpf?
    If yes, does this not contradict the top up in the BHS?

    ReplyDelete
    Replies
    1. Hi,

      Thank you for your question.
      I see my mistake, the sentence is not clear enough.
      What I meant was,
      1) you can withdraw any amount of money out of your MA that is in excess of $49,800 (age >55).
      2) If you do not meet the $49,800; you need not top up any money from your other CPF accounts to MA to meet the $49,800. In that sense, you can withdraw money out of your CPF without using it to top up your MA to $49,800.

      My apologies for the confusion.
      I hope this clarifies

      Delete
  2. "Age Amount is Fixed 55." Upon reaching age 55, your MMS is fixed at the prevailing rate for that year.

    This is false. Under the old scheme, you are always subjected to the prevailing MMS whatever your age.

    ReplyDelete