According to the Singapore Department of Statistics, the old-age support ratio continues to decline, reflecting Singapore’s elderly population outnumbering the working group. This stresses the importance of financial adequacy for seniors to prevent financial pressure on their family members. In response to this need, the government implemented several measures to help the ageing population maintain a decent quality of life. One such effort includes the Silver Housing Bonus (SHB).
What is the Silver Housing Bonus (SHB)?
The Silver Housing Bonus (SHB) is a programme supported by the government to provide senior households, especially low-income ones, the means to support and fund their retirement by monetising their private property. Through this scheme, seniors who decide to downsize, sell their existing property, and use the net sale proceeds to top-up their CPF retirement account (CPF RA) and join CPF LIFE may receive a cash bonus of up to $30,000.
How the Silver Housing Bonus (SHB) Works
The Silver Housing Bonus (SHB) incentivises the sale of a retiree’s existing property in exchange for a smaller flat. The SHB cash bonus that can be received and should be topped up to the retiree’s CPF retirement account will then be computed based on the net sale proceeds. Per the House and Development Board website, we can calculate net proceeds by subtracting the following values from the selling price of the retiree’s current flat:
- Outstanding loan, if any, on the retiree’s existing property;
- The resale market purchase price of the smaller flat; and
- The resale levy payable.
It should be emphasized that for seniors who wish to incentivise the sale of their current flat through the Silver Housing Bonus scheme, the top-up of their CPF retirement account should come directly from its net proceeds. Currently, the maximum cash bonus that a household can receive is $30,000. This is because the top-up amount for the senior’s CPF retirement account is capped at $60,000 by the prevailing full retirement sum. Any top-up, however, that is below $60,000 is subject to a pro-rated cash bonus, ratioed at $1 cash bonus per $2 CPF top-up.
Voluntary top-up to compensate for the insufficient proceeds needed to get the maximum cash bonus is also not allowed. For example, if the net sale proceeds is $50,000, the senior household will receive $25,000 as a cash bonus and won’t be allowed to voluntarily top-up $10,000 for them to receive an additional $5,000 cash bonus.
Qualifying for the Silver Housing Bonus (SHB)
To qualify for the Silver Housing Bonus (SHB), seniors wanting to apply for SHB can’t opt to buy housing bigger than their current flat or avoid buying an HDB flat or resale one altogether. Moreover, the senior household must meet the following eligibility criteria:
- Citizenship: At least one owner applying for SHB should be a Singapore citizen.
- Age: The Singapore citizen applying for SHB should be at least 55 years old.
- Monthly Household Income: The gross monthly household income should be $14,000 or less.
- Existing Property: The owners of the HDB flat being sold and applied for SHB should have met a minimum occupation period of five years before they’re allowed to resell their flat. They should also not have concurrent ownership of a second property. Their private housing should also be valued at $13,000 or less.
- Next Property to be Bought: The next property that the retiree who’s opting to apply for SHB should be no larger than a 3-room from HDB or from the resale market. It should also not exceed the value of the current property (i.e., the one intended to be sold).
- Timeframe: Booking or applying to buy a resale flat must be done before the existing property is sold or within 12 months after it’s sold. Afterwards, when the next flat’s sale is completed, the SHB application should be submitted within one year of buying the flat.
Comparing the Silver Housing Bonus and the Lease Buyback Scheme
The Silver Housing Bonus (SHB) and the Lease Buyback Scheme (LBS) are monetisation programmes launched by the government to help seniors be financially competent and supplement their retirement income. In these programmes, the seniors’ property will be sold, and the cash proceeds should be used to top-up the seniors’ CPF retirement account. These monetisation programmes, though, are designed differently.
For instance, the Silver Housing Bonus scheme requires the elderly, aged 55 years old and above, to sell their existing flat and exchange it for a smaller flat type. On the other hand, the Lease Buyback Scheme allows the elderly, aged 65 years old and above, to continue living in their existing property as it only requires the sale of the remaining leases of their flat, provided it has at least 20 years left.
The two schemes’ values for the bonuses and top-up amounts also vary. In SHB, the cash bonus depends on the net proceeds of the sold property and the amount topped up in the CPF RA. Whereas in LBS, the cash bonus depends on the remaining lease and the type of flat being leased. Both incentivised top-ups from the programmes are capped at $60,000.
What to Do Next
Upon deciding to choose the Silver Housing Bonus for your monthly retirement income, you should immediately seek senior citizen studio apartments suitable for your needs. You may also opt for an elderly home modification to make the new flat you’ll want to stay in more comfortable.
At Retire Genie, we offer high-quality options to make retirement a more pleasant experience for a Singaporean citizen. From the best nursing home in Singapore to assisted living in Singapore, we’re committed to helping retirees receive the best services for elderly care. Contact us here today to learn more.
The Silver Housing Bonus (SHB) is just one of the flat monetisation efforts introduced by the Singaporean government to help mitigate the economic effects of the country’s ageing population. Through this initiative, low-income and middle-income elderly Singaporeans may live a comfortable life throughout their retirement years, as their monthly lifelong payout is expected to increase. More importantly, this also helps reduce the financial burden on the family members of the elderly, thus avoiding the possibility of elderly abuse and promoting a healthy and harmonious family relationship.