Tuesday, 3 December 2013

Asset-rich, cash-poor retirees speak up

They live in landed property but some are so cash-strapped, they hope for low-wage jobs and Workfare. Amid many calls on the public purse, how can their needs be addressed?
By Andrea Ong And Maryam Mokhtar, The Straits Times, 30 Nov 2013

SEVENTY-YEAR-OLD Wen Zhen counts every cent. He eats two slices of bread for breakfast and lunch each. For dinner, he cooks a vegetable dish, paired with a $2 packet of rice that he ekes out over two nights.

Yet outwardly, the retired quality surveyor - who declined to give his full name - would seem to have no money worries. After all, he lives in landed property.

Home is a single-storey terraced house in Opera Estate in Joo Chiat constituency bought by his late father for $17,000 in the 1960s. The 150 sq m house is in original condition and is dwarfed by swanky three-storey homes, but it is worth $1.6 million.

This resident of a millionaire row gets by on some savings and a monthly allowance of $500 from his son, who lives overseas.

Not only that, but Mr Wen Zhen, who is separated from his wife, says his estranged brother has threatened to sell off the house: "I just hope nobody chases me out, because I will have nowhere else to go."

Living in a single-storey terraced house on the same estate, and worrying about financial stability in the future, is administrator Dai S. L., 48. She looks after her 75-year-old mother and 80-year-old father, a wheelchair user. Her firm is not doing well and she is afraid of losing her job.

Ms Dai knows downsizing will free up much-needed cash, but says: "There is no option of selling this house as long as both my parents are still alive. This house was bought by my grandfather, and it means a lot to them."

The retiree residents of Joo Chiat constituency were in the news recently when Acting Minister for Culture, Community and Youth Lawrence Wong held a dialogue session there and they highlighted their plight.

One retiree who spoke up was pioneer resident Chris Chen, 70. The neighbourhood committee chairman noted that those in the estate paid hefty property taxes though they bought their homes decades ago at "less than the cost of buying a car today". He says he is doing fine, but knows of many retired neighbours who feel the pinch from taxes or medical bills.

These seniors are the face of a growing group of Singaporeans who are asset-rich but cash-poor - they have not much savings or income, yet receive little in government help as their property assets mean they may not meet qualifying criteria.

Mr Wong assured residents the Government is "very mindful of this particular group of sandwiched Singaporeans" in designing its tax system, which is moving to a more progressive model.

Clearly, some of these asset-rich, cash-poor retirees are in need, but how can the Government identify those elderly who are truly less well-off, regardless of address, and where should it draw the line in giving assistance?

Too much invested?

SINCE Independence, home ownership has been linked to national identity and as a way for Singaporeans to own an asset that keeps giving as property values appreciate. But this may have created its own problem - putting too much money into homes and retiring with too little savings on hand.

Professor Benedict Koh, director of the Singapore Management University's Centre for Silver Security, says the asset-rich, cash-poor phenomenon is an outcome of over-investment in property. And the proportion of such seniors is only going to rise as the population ages, say Prof Koh and other observers.

Property price rises over the last 30 years have led to retirement savings being locked up in housing, he says.

A 2007 study he led found that 43.9 per cent of cumulative Central Provident Fund (CPF) savings have been invested in properties, based on CPF data from 2005. He also calculates that the average CPF balance for all age groups falls short of the current minimum sum of $148,000, based on data from CPF's 2012 annual report.

Ms Peh Kim Choo, director of Hua Mei Centre for Successful Ageing, is worried that the asset-rich, cash-poor problem will be exacerbated as baby-boomers retire over the next 20 years.

This is the generation that entered the workforce after CPF and the message of home ownership were introduced, she says.

As more of these folk retire, says Ms Peh, "that is where we will see a lot more of the asset-rich, cash-poor situation".

It cuts across both public and private housing, she notes. Her centre has counselled such seniors living in larger HDB flats.

However, the phenomenon is arguably more pronounced for elderly private estate residents. Typically, they bought their private homes at much lower prices in the 1960s or 1970s.

Retired principal Ho Chee Peng, 77, is a first-generation resident of Teachers Estate who bought his terraced house for $24,700 in 1969. He and his wife, retired teacher Ho Fong Oi, 71, live off their savings. But they have elderly and widowed neighbours without much savings and income who do not get the same government benefits as someone who may live in an HDB flat but drives a Mercedes or Maserati.

Such situations make retirees like them question: Who is to say that one group is better off than the other?

For richer or poorer

THE Government's means-testing for large-scale special transfers like the GST Voucher and CPF top-ups has two main criteria: assessable income (AI) and annual value (AV) of residence, or the estimated annual rental that could be collected for a property. They provide a proxy for assessing a person's income and wealth.

During his visit to Joo Chiat, Mr Wong said it is fair for those with more income and wealth to pay higher taxes to fund greater public spending.

He spoke of how the Government has moved on the means-testing and tax systems to better take into account the asset-rich and cash-poor elderly. It now uses annual value instead of HDB flat type as a qualifying criterion for Budget surplus transfer schemes as this benefits owners of lower-end private property and is a "fairer system".

The Ministry of Finance (MOF) tells Insight it switched to annual value as a means-testing criterion in 2003, when the Economic Restructuring Shares (ERS) scheme was introduced. That allowed those in private properties with lower annual value to benefit from the higher quantum of ERS, compared with the New Singapore Shares in 2001 which depended on HDB flat type.

"Our approach of using both AI and AV as criteria is a practical way of identifying those who are less well-off, from among the full population of adult Singaporeans. It is not perfect, but broadly equitable and progressive," said MOF.

That complements other schemes that are less broad-based, allowing for more customised assessment of individual needs, MOF said.

The Government is also moving towards a more progressive tax system, with measures introduced in this year's Budget giving an indication of future directions.

It is lifting property tax rates for the top-most tier of homes with AVs of above $59,000, as a form of wealth tax. But when the new rates kick in next year, 95 per cent of all owner-occupied homes will pay lower property tax, said MOF. This covers all HDB owner-occupiers, including retirees, and 74 per cent of owner-occupied private homes.

Responding to Workers' Party chairman Sylvia Lim at the Budget debate, Deputy Prime Minister Tharman Shanmugaratnam said the Government, in designing the new scheme, had studied where older Singaporeans owned private homes to ensure their situation was taken into account.

For instance, they looked at Opera Estate, Teachers Estate and Serangoon Gardens, which falls within Ms Lim's Serangoon ward in Aljunied GRC.


Marine Parade GRC MP Seah Kian Peng feels there has been a change in the Government's mindset, and the current means-testing methods "by and large are quite fair and address most of the residents who do need help".

But some gaps remain, said Mr Seah and other MPs with larger concentrations of retired residents living in private estates.

One sticking point is the annual value threshold of $13,000 for several subsidies and schemes.

As seen in the Joo Chiat dialogue, schemes that help alleviate the cost of health care are upper-most on retirees' minds.

Ms Lim has asked several times in Parliament if the threshold can be reviewed for the Community Health Assist Scheme (CHAS), which subsidises care at private GPs. CHAS looks at per capita household monthly income, or annual value for economically inactive households. The latter in effect disqualifies retirees living in property of higher annual value even if they are cash-poor.

Economically inactive patients with property annual value above $13,000 get less subsidies for staying in B2 and C-class hospital wards.

The $13,000 annual value criterion also applies to the Workfare Income Supplement (WIS). Ang Mo Kio GRC MP Inderjit Singh told Insight that this disqualified some of his private estate constituents who wanted to take on low-paying jobs to support themselves after retirement.

In its response to Insight, MOF noted the $13,000 annual value threshold covers all HDB flats.

The $21,000 annual value criterion for GST Voucher, on the other hand, covers all HDB flats and about 15 per cent of all private properties - or about 80 per cent of all properties.

The MOF also said retirees living in properties with higher annual values can still benefit from "substantial health-care subsidies" at polyclinics and public hospitals as well as through Medisave top-ups. In this year's Budget, the Medisave top-up of $200 benefited 1.5 million Singaporean citizens aged 45 and above, regardless of where they lived.

However, there are those who feel the asset-rich are being too demanding. SMU's Prof Koh believes "it would be inequitable for well-off retirees to insist on holding on to their wealth in property but want handouts from the Government because they don't have enough cashflow".

In a letter to The Straits Times Forum Page this week, Mr Toh Cheng Seong said asset-rich, cash-poor seniors should "spare a thought for those who are in greater need of public help".

This echoes the more pragmatic line taken by the Government in the past: Cash-strapped seniors with high-value assets should monetise their property, whether by downsizing, sub-letting rooms or taking up a reverse mortgage.

But that is not always a viable option, say observers and MPs.

Ms Lim tells Insight: "To ask them to sell and downgrade is an emotional decision, not just dollars and cents."

Mr Singh, whose Kebun Baru ward includes Teachers Estate and Sembawang Hills, says: "Some mentioned to me that they want to spend their last years in their own house and it will be unfair for them to be asked to move to a new environment."

Uprooting and moving to an unfamiliar environment can also be traumatising for the old, say social workers and sociologists.

Dr Kang Soon Hock, head of the social science core at SIM University, says the elderly in private property may find it hard to find a cheaper, smaller home in the same area, though "it would be best if seniors, who choose to downsize, are able to remain close to the area they have been living for a large part of their lives".

It is a hard trade-off for those involved. Mr Seah tries to explore options for residents who say they are asset-rich and cash-poor, such as sub-letting a room.

Still, as Joo Chiat MP Charles Chong puts it: "The perception of heartlanders is that (asset-rich, cash-poor retirees) are better off. If the Government gives assistance to them, they would feel some sort of injustice. But we see it at at the micro and individual level, and we see how heartbreaking it is."

On top of that, economics don Chia Ngee Choon of the National University of Singapore says there could be other social or behavioural motives in play. For instance, the desire to leave a bequest to one's children is "very strong".

What can be done?

WHAT then can be done to improve the situation of these asset-rich, cash-poor retirees?

One suggestion is to extend the full benefits of some "essential" schemes to all seniors above a certain age, like the senior citizen concession card for public transport.

Retired senior lab technologist Vincent Tan, 77, who lives in Teachers Estate, says: "Why not cast the net wider to include everyone above a certain age?"

Mr Singh says this could be done under the Pioneer Generation Package announced at this year's National Day Rally: "Many bought properties a long time ago when there were no HDB flats and hence did not enjoy the subsidy of public housing. I think we can be generous and give them help like CHAS and other subsidies."

Alternatively, he adds, the annual value criterion could be lifted for schemes like WIS and CHAS.

Hua Mei Centre's Ms Peh suggests a "basic universal package" for the elderly, which would be in line with recent moves like removing the age limit for MediShield Life.

Mr Seah favours raising taxes on the rich - whether via income, property or luxury cars - to help the less well-off.

SMU's Prof Koh says, however, the Government should spend more effort tackling "the underlying cause of the asset-rich, cash-poor dilemma" - over-investment in property. He calls for a cap on how much CPF savings can be tied up in property.

Observers say greater financial literacy and education is needed. "I don't think anyone really knows how much we really need to grow old," says Ms Peh.





Growing power of the grey vote
By Andrea Ong, The Straits Times, 30 Nov 2013

MR TERRENCE Netto still vividly remembers a comment by a government minister to private estate residents during a dialogue session in the 1990s.

"He said, if you want government subsidies, sell your house and move to a three-room flat," says the 75-year-old.

That remark riled him and many of his neighbours in the Seletar Hills private estate where he lived at the time. "We went on the warpath!" he says.

They felt the Government seemed to be turning its back on them when they needed some support after working all their lives, just because they lived in private homes, he says.

Mr Netto, a retired purchasing officer, saved up to buy his single-storey terrace house for $270,000 more than 20 years ago. He thinks the unhappiness of the Seletar Hills residents may have bled over into the 1997 General Election, when the former Cheng San GRC, of which Seletar Hills was a part, became a hotly contested focal point.

While the Workers' Party (WP) team led by Mr J.B. Jeyaretnam lost, it garnered 45.2 per cent of the vote - a near 10-point swing from the 1991 election.

The 1997 polls turned on other issues as well, but it showed that not being sensitive to those who feel the squeeze of being asset-rich but cash-poor can exact a political toll.

The potential for the issue to become a hot potato is greater now, as the population ages and more baby boomers who own homes leave the workforce.

One political consideration is that private housing dwellers are conventionally thought to be less supportive of the ruling People's Action Party (PAP).

The Institute of Policy Studies' (IPS) post-election surveys in 2011 and 2006 consistently showed that, compared to residents of other housing types, those living in private housing were the most in favour of political pluralism.

Many of the older estates where residents are more likely to face the asset-rich, cash-poor squeeze also fall in wards that are marginal.

Take Opera Estate, consisting of private housing, in Joo Chiat (see main story), where the PAP's Mr Charles Chong beat the WP's Mr Yee Jenn Jong by a mere 388 votes in 2011. Other examples of these older estates include Serangoon Gardens, part of Aljunied GRC which the WP won in 2011.

Indeed, Associate Professor Reuben Wong of the National University of Singapore feels that the sentiments of the asset-rich, cash-poor in Serangoon Gardens may help to explain the swing towards the WP.

As the political landscape has changed over the years, so too have politicians' messages on issues such as whether private estate residents should receive government benefits given to Housing Board flat dwellers.

In 1981, then Prime Minister Lee Kuan Yew roasted professionals and government officers living in Siglap private homes for being "too demanding" in pressuring their MP for refinements.

In the 1990s, the debate zoomed in on whether the Government should provide upgrading for private estates, and not just HDB ones.

Private estate residents said they paid a disproportionate share of taxes compared to HDB residents and should benefit from improvement works. They felt it was unfair that HDB folk were subsidised twice - once when they bought their flats, and again when these were upgraded. It led then Prime Minister Goh Chok Tong to caution in 1996 that private estate residents should not view asset enhancement schemes like HDB upgrading or Central Provident Fund top-ups with envy, but as part of the push to help the less well-off.

But in December that year, ahead of the 1997 polls, Mr Goh announced that the Government would soon start upgrading common areas in private estates, though he drew the line at upgrading individual homes.

Another factor raising the profile of the growing group of asset-rich, cash-poor retirees: They are adding their muscle to an emerging electoral "bloc" - the grey vote.

As Mr Chong noted recently, many ageing issues that Singapore will eventually face are manifesting themselves in Joo Chiat, where the elderly folk may tend to vote according to whichever party they feel is addressing their specific needs. There are signs that this trend had already begun in "greying wards" during the 2011 polls, says Prof Wong.

The IPS surveys also found that while most seniors aged 65 and above voted conservatively in 2006, this was no longer the case in 2011.

The 1999 Inter-Ministerial Committee Report on the Ageing Population flagged the "powerful political role" senior citizens could play by 2030, when they are projected to form one in five of the population.

As for Mr Netto, he sold his Seletar Hills house for about $2 million and bought a flat in Sengkang for more than $620,000 this year as he could no longer shoulder the cost of medical bills and maintaining his old home.

He misses the greenery and open spaces of his old home but says he is fortunate to be able to choose a new home near a park and river: "At least I had a choice. It's those who feel they have no choice and are being forced to move who will be unhappy."





Sentimental attachment not valid excuse

ASSET-RICH, cash-poor Singaporeans should not expect government aid ("Asset-rich, cash-poor retirees speak up"; last Saturday).

The rational and responsible thing to do would be to sell the property, or monetise it in some way, and use part of the sale proceeds to buy a less expensive home and set aside the balance for daily expenses.

Refusing to sell the property and yet expecting government handouts is like wanting to have your cake and eat someone else's as well.

Citing sentimental attachment to a house as a reason for not wanting to part with it is hardly any justification for the Government to offer financial support to asset-rich, cash-poor Singaporeans.

Instead of lamenting their "predicament", they should be thankful that their properties have appreciated greatly in value over the years.

There are those in more dire need of financial assistance, like the "asset-less, cash-poor", some of whom do not even have a roof over their heads.

If there is any assistance that the Government should offer to the "asset-rich, cash-poor", it is advice on financial planning and perhaps some guidance on working with real estate agents.

Louis Lee Lip Kian
ST Forum, 3 Dec 2013





Be prudent in giving financial aid

LAST Saturday's article ("Asset-rich, cash-poor retirees speak up") highlighted the Government's increasingly challenging balancing act when citizens approach it for aid.

On the one hand, there are quarters calling on the Government to do more for the poor by setting a poverty line, like what Hong Kong has done.

On the other hand, we have asset-rich Singaporeans clamouring for the Government's assistance in coping with the rising cost of living.

While the Government has pledged to be more compassionate, it has to be mindful that Singapore does not become a welfare state. Aid, once given, would be very difficult to retract.

I know of recipients of public aid who choose to work in jobs that do not pay well although they are capable of earning more. Instead, they would rather seek handouts from the Government.

Their expenses include cable TV subscriptions, car loan instalments, foodcourt dining, cigarettes, costly mobile plans, air-conditioning bills and so on. Clearly, these are luxuries they can do without.

My concern is that while there is political pressure on the Government to be more generous in helping the needy, this might inadvertently erode our work ethic and competitiveness.

The last thing we want would be for taxpayers to subsidise these "needy" Singaporeans for non-essential items.

Hence, much prudence is required when dishing out financial assistance.

Perhaps the Government can come up with a list of essential needs. Subsequently, it can put a dollar value to individual items on the list, and dish out monetary aid accordingly when citizens seek assistance.

The Government should also provide financial aid to only citizens.

Elgar Lee
ST Forum, 3 Dec 2013





* Why property tax must be levied on vacant homes

WE THANK Mr Geoffrey Kung for his feedback ("Don't levy tax on vacant properties"; last Tuesday).

Property tax is a tax on wealth. It is thus levied on the ownership of properties, irrespective of whether the property is occupied or vacant.

In line with this policy intent, we will remove the property tax refund for vacant properties with effect from Jan 1 next year.

Besides property tax, there are no other forms of wealth taxes in Singapore.

The tax is also payable on owner-occupied properties, although at a concessionary rate.

We appreciate that some owners of unoccupied properties may be in the process of looking for rental tenants or are keeping the properties vacant for personal reasons. However, as such properties form part of the wealth of the individual, it would be fair to levy property tax on the properties.

Lim Bee Khim (Ms)
Director, Corporate Communications





* Vacancy refund for property tax removed to ensure consistency

MR ANG Miah Boon asked why the rationale for the removal of the vacancy refund for property tax was not shared with the public ("Questions remain on property tax"; Dec 14).

As property tax is a tax on wealth in the form of property ownership, it should be levied irrespective of whether the property is vacant or occupied. The vacancy refund scheme was thus removed, consistent with this intent of property tax.

The change coincides with the introduction of a new and more progressive property tax schedule on residential properties in 2014. The rationale for the removal was explained in the Budget statement in February this year, and when the amendment Bill was tabled in Parliament in October.

Mr Ang also asked why property tax is the only tax on wealth in Singapore. We eliminated estate duties in 2008 as its greatest impact was not on the wealthiest, who tended to manage their financial assets globally.

In doing so, the Government explained that property tax would be retained as a wealth tax. Property taxes are more efficient, and can be structured more equitably, with the owners of more valuable properties paying more.

We also do not levy wealth taxes on any other forms of wealth such as cash or equity for practical reasons - monies can easily be shifted to similar assets in other financial centres, and such taxes will impact Singapore's competitiveness as a financial centre.

Lim Bee Khim (Ms)
Director, Corporate Communications




Questions remain on property tax

IN ITS reply ("Why property tax must be levied on vacant homes"; Tuesday), the Ministry of Finance did not answer the question raised by Mr Geoffrey Kung ("Don't levy tax on vacant properties"; Dec 3).

It did not explain why there was a need to change the policy on property tax refunds for vacant homes. Was it to plug a loophole or to generate revenue? Was it introduced because of a concern that more properties are becoming unoccupied as a result of the cooling measures and the cut in the influx of foreign workers, who typically stay in rental homes?

When there is a change in policy, it would be good for the people to know the rationale behind it, instead of leaving them to speculate.

Also, I am interested in the ministry's view that property tax is the only tax on wealth in Singapore. How does it define wealth, which can come in many forms such as cash, equity, or fixed assets like property?

When wealth is accumulated from income, it is already taxed. But if it is kept in the form of cash, there is no tax. However, when the same cash is invested in property, it is taxed as "wealth", regardless of whether that property generates rental income.

Ang Miah Boon
ST Forum, 14 Dec 2013




Don't levy tax on vacant properties

I AGREE with the divergent views expressed by Mr Ang Miah Boon ("Higher property tax will put squeeze on retirees") and Mr Toh Cheng Seong ("Prudence vital for asset-rich, cash poor") last Wednesday.

I belong to the large group of retirees who are asset-rich and cash-poor. Many of us depend on rental earnings as our sole source of income.

In the report ("Govt 'will look out for asset-rich, cash-poor'"; Nov 18), Acting Minister for Culture, Community and Youth Lawrence Wong was quoted as saying that in designing its tax system, the Government is "very mindful of this particular group of sandwiched Singaporeans".

If the new property tax regime is meant to be fairer, then what is the rationale for removing the refund of property tax on unoccupied buildings?

Taxes should not be imposed when there is no profit or gain.

People depending on rental for income would not want to leave their property vacant; they are always on the lookout for suitable tenants. So is it fair to tax them when they are unable to find tenants and, thus, not receiving income?

Also, Mr Toh suggested reverse mortgage schemes as a solution for asset-rich, cash-poor seniors.

Being interested in such schemes to see out my retirement years, I have queried many financial institutions on reverse mortgages for rented properties, but have not been able to find any. Perhaps those in the know can advise me on this?

Geoffrey Kung
ST Forum, 3 Dec 2013




Higher property tax will put squeeze on retirees

THE Government will introduce a more progressive property tax from next year, whereby those who own higher-value property will have to pay higher property tax ("More progressive tax system expected"; last Wednesday).

While this looks fair, it puts the squeeze on retirees.

After contributing to the economy for 30 to 40 years, some workers can afford to retire with property that generates rental income.

However, come next year, they will have to pay more property tax, and they have no employment income to make up for their higher expenses.

If the additional revenue from progressive property tax is meant to close the income gap, why is the Government taking from retirees as well? Are retirees expected to downgrade their standard of living in order to help fund programmes for people who have yet to contribute to the economy, yet are expecting government handouts?

Unlike progressive income tax, property tax is an expense regardless of whether the property is generating income or not. There is no way to avoid it, unlike for consumption tax where one can simply consume less.

I hope the Government will rethink the implementation of progressive property tax. Several cooling measures have already led to reduced rentals, and retirees are being squeezed from both ends.

Ang Miah Boon
ST Forum, 27 Nov 2013





Prudence vital for asset-rich, cash-poor

ASSET-RICH and cash-poor seniors should spare a thought for those who are in greater need of public help ("Govt 'will look out for asset-rich, cash-poor'"; Nov 18).

The values of their properties would have risen greatly over the years, and it is only natural that the tax on these assets correspond to the appreciation in value.

Life is all about making adjustments - including getting out of one's comfort zone if necessary - in accordance with one's circumstances.

Seniors who cannot afford to keep up their current lifestyles should consider monetising their assets.

Reverse mortgage schemes are widely available. Selling the property for a more modest retirement home is another option.

The seniors' immediate family members, including their children if they have any, could be another primary source of financial assistance.

The last thing they should expect is for taxpayers to subsidise their lifestyle habits, especially when they are in a far better situation than the less fortunate in society.

Prudence is all about living within one's means, especially during one's twilight years when fresh sources of income are less readily available.

Toh Cheng Seong
ST Forum, 27 Nov 2013





Defend principle of self-reliance

ALL PARLIAMENTARIANS should seek to uphold the underlying ethos of self-reliance, self-awareness and self-control that continues to define Singapore's success ("Asset-rich, cash-poor retirees speak up"; last Saturday). Exceptions to the norm, where applicable, can and should be made.

However, it does not make sense for taxpayers to mollycoddle retirees with the means of taking care of their own material needs, especially those who own multiple properties and are complaining about the squeeze of progressive property taxes on their rental income ("Higher property tax will put squeeze on retirees" by Mr Ang Miah Boon; Nov 27) .

These landlords - who are seeking preferential tax treatment just because they are senior citizens who have contributed to Singapore's success - have many options to fund their retirement needs, including cashing in on their assets and, if need be, investing the fresh funds in financial instruments such as annuities.
The attractive returns on their real estate investments are partly due to Singapore's economic achievements over the last 50 years.

They should be grateful and spare a thought for those who are more deserving of public assistance.

According to MPs Sylvia Lim and Inderjit Singh, some retirees have formed an emotional bond with their homes and would like to live out their final years there.

I share their observation - as long as these seniors can afford to do so.

Singapore cannot afford to pander to every asset-rich, cash-poor retiree who harbours such sentiments, as our society ages.

It will also contradict our efforts at building HDB studio apartments and retirement villages to encourage prudence among senior citizens.

The same can be said of Mr Singh's argument that members of the asset-rich, cash-poor class deserve handouts because they did not enjoy public housing subsidies in the past.

It is akin to suggesting that all private property dwellers who have not enjoyed any housing grant from the Government, including myself, should have their Central Provident Fund savings topped up.

As Western Europe has shown, populist policies to address the age-old problems of welfarism have the nasty habit of backfiring on future generations.

Let us be very clear that this discussion is not about the rich versus the poor, or between private property dwellers and heartlanders.

It is about defending a very sensible principle of robust self-reliance against the emerging "cancer" of self-entitlement and "half-baked" egalitarianism across all strata of our society.

Toh Cheng Seong
ST Forum, 5 Dec 2013





Asset-rich, cash-poor retirees not at fault

I DISAGREE with Professor Benedict Koh, director of the Singapore Management University's Centre for Silver Security, that the asset-rich, cash-poor phenomenon is an outcome of over-investment in property ("Asset-rich, cash-poor retirees speak up"; last Saturday).

It is our economic success in a fast-changing socio-economic landscape, accompanied by hyper-inflation and runaway property prices, that has created this problem.

What can asset-rich, cash-poor retirees do when the environment around them has changed so rapidly over the past few decades that they are unable to adapt?

Singapore has one of the highest home ownership rates in the world. Members of the "pioneer generation" worked very hard in order to buy their homes.

It is not their fault that their Central Provident Fund savings have become insufficient for their retirement because of high inflation and changes in Singapore's tax system, including the introduction of consumption tax and progressive tax. Many now find themselves living in one of Asia's most expensive cities.

A home is not a motel. Should an inclusive society force its elderly retirees to uproot from their homes and downgrade because of changed circumstances?

The Government should be more magnanimous towards these people. It should offer them lower health-care and eldercare costs, as well as other social benefits to lighten their burden in their "winter years".

Paul Chan Poh Hoi
ST Forum, 5 Dec 2013





Asset-rich, cash-poor must be pragmatic

WE NEED to be very clear that asset-rich, cash-poor retirees are wealthy, except that their wealth is illiquid ("Asset-rich, cash-poor retirees speak up"; last Saturday). Therefore, their "plight" is misplaced and their pleas for government assistance should not be entertained.

They have a choice - continue sitting on their assets and contend with limited cash, or unlock the value of their assets, which can amount to millions of dollars, given the sharp appreciation of property prices over the years.

As with all things in life, there is a trade-off. We cannot expect to have our cake and eat it as well.

I used to be an owner of multiple properties. Two years before retiring, I cashed out my investment properties and invested the proceeds prudently so as to ensure a stable source of passive income that enables me to maintain my desired lifestyle.

For retirees with only one property, there are many ways to unlock its value, for example, by downgrading or mortgage refinancing.

When push comes to shove, we have to be pragmatic. We need to fend for ourselves. No one, including the Government, owes us a living.

Hence, it is embarrassing for such people to expect help from the Government, when they should instead be helping their fellow citizens who are truly in dire need of assistance.

Lawrence Loh Kiah Muan
ST Forum, 5 Dec 2013





A question of fairness

I AM a 66-year-old retiree living in a condominium unit worth about $1.35 million. I have never forgotten that the appreciation in value of my home was possible only because of good government policies and planning.

If I should need cash one day, I will sell my condo unit and downgrade to a three-room HDB flat.

Some retirees living in private landed properties worth millions of dollars are expecting the Government to give them financial assistance so they can continue living in their homes, which they intend to leave to their children when they die.

Is it fair for them to have their cake and eat it, too? Do they not know that they are the envy of thousands of retirees living in rented one- and two-room flats?

Is it fair or even wise of them to vote irresponsibly because they are envious of the help given to these asset-poor, cash-poor retirees, who have also contributed to the success of Singapore and deserve much more help?

Lee Hong Leong
ST Forum, 5 Dec 2013



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