Tuesday, 2 September 2014

Govt looking at flexible options for lease buyback

Instead of 30-year lease, flat owners may get to vary the number of years
By Lim Yan Liang, The Straits Times, 1 Sep 2014

ELDERLY flat owners who opt for the Lease Buyback Scheme may be given the option to retain more or fewer years on their flat's lease, in a bid to make the scheme more flexible.

Minister for National Development Khaw Boon Wan said this yesterday during a post-National Day Rally dialogue for youth in Sembawang GRC, adding that his ministry is set to announce changes to the scheme this week.

Currently, under the scheme, retirees retain 30 years of the lease on their flat and sell the remaining period to the Housing Board in return for monthly payouts. The proceeds can be used to top up their Central Provident Fund (CPF) Retirement Account for annuity payouts.

But depending on when they join the scheme, said Mr Khaw, some seniors may find the 30-year lease too long or too short.

For example, those who join when they are younger may worry about outliving the lease period, while those who join when they are older, say at 80 years old, may find the 30-year period too long.

To address these concerns, he said the Government could vary the period of the lease that it buys back.

He suggested, for example, a 35-year period for those who sell part of the lease back at 65 years old, so that it would last until they are 100 years old.

Someone who joins the scheme late may be able to sell the Government a longer part of his lease to get a bigger payout, he said.

His comments yesterday followed Prime Minister Lee Hsien Loong's announcement during his National Day Rally speech last month that the Lease Buyback Scheme will be extended to owners of four-room flats as well, as part of the larger push to make sure that Singaporeans have enough for retirement.

Mr Khaw said that this makes about 75 per cent of seniors eligible for the scheme, compared with about 35 per cent previously when it was limited to owners of smaller flats.

At a separate dialogue in Pasir Ris-Punggol yesterday, Deputy Prime Minister Teo Chee Hean was asked why the scheme was not extended to include even larger flats. Mr Teo, the Coordinating Minister for National Security and the Home Affairs Minister, said the scheme is meant for retirees who want to continue living in their own flats.

He added: "We don't need to encourage people to stay in flats which are much bigger than they really need." Those with larger flats, he said, can consider other alternatives to get income, such as renting out their flat or downsizing to a smaller one.

At the Sembawang event, Mr Khaw was asked if Sembawang is slated for large-scale development projects, like those in Jurong highlighted in Mr Lee's National Day Rally speech this year.

Mr Khaw said the Government had "massive plans" for the development of the North, and that facilities at Sembawang will be ramped up as the population grows.

Noting that there have been requests for sports facilities, he said a site has been found and the details will be announced in a few months.

Sembawang town is still relatively small, Mr Khaw said, and flats were being built over the last three years to grow its population.

Business undergraduate Han Dong, 25, who was at the dialogue, said he was glad that the concerns of young people were on the Government's mind.

Experts back options for lease buyback
They say this will attract more seniors to the scheme, but call for safeguards
By Janice Heng, The Straits Times, 2 Sep 2014

More elderly flat owners are likely to be interested in the Lease Buyback Scheme if they have a choice of how many years of their lease to retain and how many to sell back to the Government, said property experts.

But they also warned about allowing too much flexibility and suggested pegging such options to the flat owner's age.

On Sunday, National Development Minister Khaw Boon Wan said that the Government is looking at ways to create more flexibility in the Lease Buyback Scheme.

Currently, the scheme lets Housing Board flat owners keep 30 years of their lease and sell the rest back to the HDB.

The sales proceeds are used to top up their Central Provident Fund (CPF) Retirement Accounts, with any extra being received in cash.

Mr Khaw said his ministry is studying whether elderly flat owners may be given the option to retain more or fewer years on their flat's lease.

A longer lease would mean that flat owners do not have to worry about outliving the 30 years.

A shorter lease would let them get more cash upfront.

Details of the changes are set to be announced this week.

Experts were upbeat about the the proposed move, but highlighted the need for safeguards.

Offering a shorter lease to an 80-year-old, for instance, will free up more cash for these older flat owners who might have more medical costs, said R'ST Research director Ong Kah Seng.

But allowing too short a lease to be left on the flat runs the risk that flat owners will outlive it.

"I believe that there should be a minimum cap on how many years the owner can retain, and the cap should be adjusted according to their age," said OrangeTee managing director Steven Tan.

If too much flexibility is offered, he added, some might take advantage of it by keeping a very short lease and counting on the Government to not evict them.

The Government has guaranteed that no elderly Singaporean will be made homeless under this scheme.

"But this guarantee will cost taxpayers' money to fulfil" if many flat owners do outlive their leases, noted SLP International Property Consultants' head of research Nicholas Mak.

Mr Ong thought that the target age should rely on projections by medical, elder-care and sociology experts on possible life expectancies in the coming decades.

The Lease Buyback Scheme is one of several options which four-room flat owner Teo Hup Seng, 71, is considering.

The retiree, who lives with his 66-year-old wife, welcomed the option of keeping a shorter lease: "It would be good if they allowed it. Thirty years is more than enough for us."

Seniors at successful ageing discussion say they prefer to age in place
By Loke Kok Fai, Channel NewsAsia, 31 Aug 2014

To age in place, living independently within a supportive community was the desire of many seniors who were at a focus group discussion on senior-friendly homes on Saturday (Aug 30).

It is the second in a series of public discussions on the national Action Plan for Successful Ageing. The plan aims to engage Singaporeans to come up with strategies to help seniors age successfully. It will look into eight areas, including lifelong learning, health and wellness and retirement adequacy, with discussions centred on building 'A Nation for All Ages'. Participants will identify the areas they feel are most important in determining successful ageing.

Over half of the 44 participants at the discussion on Saturday were above 60 years old. Most of them said they would rather live in the same flat as they age than to move in with their children. And even if they require more assistance, many preferred right-sizing their apartment or turning to other options like living in a retirement village.

Some participants said they did not want to force family members to take care of them, citing changing social dynamics and generational differences. Others preferred to stay within familiar surroundings than move out.

The participants asked for more to be done to create a better environment for community integration and mutual support among the elderly such as providing better spaces for communal daily activities between seniors such as cooking or eating.

They also suggested outreach initiatives such as training 'senior ambassadors' - who may be younger seniors physically fit enough to do regular house visits but are old enough to empathise with the concerns of their charges - to interact with lonely seniors.

"They probably want to feel that 'I can be as independent as I can for as long as I want to, for as long as I'm able to', be it financially or even physically. Living with their children may give them the sense that they are dependent on their children physically. So they do not mind or would want to live near their children so that emotional support can be made available, but at the same time they want to be as independent as they can," said Dr Mohamad Maliki Osma, Minister of State for National Development.

"What came across today was also the sense of community. Many of the seniors spoke about the need for the community to come together - neighbours coming together to support one another, to recognise and identify vulnerable elderly neighbours, for example. I think that's also quite positive, because I think many are beginning to realise that we need to build a community that's mutually supportive of one another," he added.


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