Friday, 5 September 2014

Changes to HDB Lease Buyback Scheme to benefit more elderly and offer greater flexibility from 1 April 2015







More cash upfront under enhanced lease buyback plan
Smaller sum goes into CPF; leases can vary and more will qualify
By Janice Heng, The Straits Times, 4 Sep 2014

MORE elderly flat owners will be able to sell part of their lease back to the Housing Board (HDB) for retirement income under changes to the Lease Buyback Scheme announced yesterday.

 Those who co-own flats can also unlock more cash upfront while putting less in their Central Provident Fund (CPF) Retirement Account. All owners can also choose how many years of their lease to keep, within limits.

Currently, they can retain only a 30-year lease. All flat owners will get a new option of keeping a 35-year lease. Depending on their age, they can reduce this to as little as 15 years for those aged 80 and older.

These changes, made in response to feedback, will take effect from April 1 next year, when the scheme will also be extended from three-room and smaller flats to include four-room flats.

However, National Development Minister Khaw Boon Wan said he does not expect the change to result in a spike in interest in the scheme, which has seen a low take-up rate since its launch in 2009.

About 800 households have taken part so far, and Mr Khaw told reporters at a media briefing: "I don't think it will be in the tens of thousands... a few hundred definitely, maybe a few thousand."

Under the scheme, flat owners continue to live in their flats and sell a portion of their remaining lease.

The changes mean that for households with two or more owners, each owner has to top up his CPF Retirement Account to only half of his individual age-adjusted Minimum Sum, using proceeds from the sale of the lease.

Previously, proceeds were first channelled to meeting the full Minimum Sum. With the changes, flat owners can get more cash upfront, capped at $100,000.

"We have always said that the Minimum Sum is enough to look after the basic needs of a couple," said Mr Khaw. Owners will also get a cash bonus if they participate in the scheme - $20,000 for three-room and smaller flats, and $10,000 for four-roomers.

 Fearing that some owners might "just spend or invest (the proceeds) unwisely", Mr Khaw urged seniors to be prudent.



The Government will also raise the monthly household income ceiling from $3,000 to $10,000, making more seniors eligible. The minimum age is 63.

With four-room flats included, 75 per cent of elderly HDB households could potentially take part in the scheme, up from 35 per cent now.

About 290,000 HDB flats are owned by Singaporeans aged 55 or older, and 80 per cent of these flats are fully paid for.

Mr Khaw said that the best option for elderly couples is to live with their children and rent out their flat. "Should you need it, the option is there... but most people do not need it."

Asked if five-room flats might qualify eventually, he said: "Let's do it for the four-room (flats) first."

Property experts welcomed the changes. PropNex Realty chief executive Mohamed Ismail Gafoor said of the scheme: "It is finally ready to take off."






More cash a draw, but some prefer to bequeath their flats
Aim of revamp is to give people more options: Khaw
By Yeo Sam Jo, The Straits Times, 4 Sep 2014

WHEN the income ceiling is raised next April so they become eligible for it, Mr Thomas Wong, 64, and his wife might well take advantage of the Lease Buyback Scheme.

Changes announced yesterday mean they could sell part of the lease on their four-room Bukit Batok flat back to the Housing Board (HDB) in return for something more in their pockets.

"If there is more cash, it will be more flexible for us. We can go for a holiday or invest the money," said Mr Wong, who is self-employed. His wife, 63, is a secretary. They have an adult son.

The couple take home about $3,200 every month. The revamp raises the income ceiling from $3,000 to $10,000.

Property experts say that, like the Wongs, other home owners will be attracted to the scheme now because of the greater cash proceeds promised.


"The cash gives you the peace of mind that you have more flexibility with your money."

Agreeing, SLP International Property Consultants head of research Nicholas Mak said this change in the rules would make the most difference for elderly owners who are cash-strapped.

He said: "Those who need money urgently are more likely to join such a scheme, and they wouldn't want to see a large part of their proceeds go into CPF," he said.

From next April, co-owners of a flat will need to top up their CPF Minimum Sum by just half the amount that is now required, giving them more cash in hand.

The revamped scheme also gives owners more options over how much of their lease to keep. Currently, flat owners have to keep 30 years of the lease and sell the rest back to HDB.

Under the new rules, they must sell at least 20 years back to the HDB, but those aged 70 and older can keep just 25 years and sell the rest. Those aged 75 and older may keep just 20 years on their lease. Those 80 or older can choose to keep just 15 years.

All eligible flat owners will be able to keep a new maximum of 35 years on their leases.

"It is definitely something we are interested in," said Mr Wong. "But we might still hold back so we have the option of leaving the flat to our grandchildren."

Other residents, such as taxi driver Tan Ah Tee, also voiced the desire to hold on to their flats as their children's inheritance. "It is very expensive for my son to buy a new flat," said Mr Tan, 65, who lives with his wife, eldest son and daughter-in-law in a four-room flat in Bedok North. "I wish to leave it to my children and the future generations."

National Development Minister Khaw Boon Wan said the issue of bequest boils down to choice, and the aim of the revamp is to give people more options. "Different people have different needs, different preferences," he said. "It also depends on your relationship with your children, and whether you have children.

"I think the key is to make sure there are different kinds of options, and to let people choose."

R'ST Research director Ong Kah Seng said that the scheme's objective is to cater to elderly people who need to and are willing to monetise their property assets, and that this should take "centre stage" over the issue of bequest.

Mr Mak also noted that the value of the balance on the lease would go into a home owner's estate upon his death. He said: "The children may not get the flat, but they will get money from the flat."




Post by Ministry of National Development.





More flexibility for Lease Buyback Scheme
By Olivia Siong and Joy Fang, Channel NewsAsia, 3 Sep 2014

Four key changes were announced for the Lease Buyback scheme on Wednesday (Sep 3).

 Firstly, the scheme will be extended to four-room flats. This means that 75 per cent of elderly households will be covered - up from 35 per cent currently. Four-room households will also get a S$10,000 cash bonus when they participate.

Secondly, the income ceiling for those participating in the scheme will be raised from S$3,000 to S$10,000. Authorities said this will allow seniors who are still working or living with their family to qualify for the scheme.

Thirdly, the CPF top-up requirement for households with two or more owners will be relaxed. Households with two or more owners will no longer be required to top up their CPF Retirement Accounts to their full age-adjusted prevailing Minimum Sum. Instead, they only need to top up to half of the Minimum Sum, and have the option to withdraw more cash upfront.

Lastly, seniors can choose the length of lease to retain. Currently, elderly owners who qualify for the scheme can sell part of their flat’s 99-year lease back to the Housing and Development Board (HDB) in return for monthly payouts, keeping only a 30-year lease.

When the change kicks in, those aged 70 to 74 will have the option of a 25-year lease, while those aged 75 to 79 will have the option of a 20-year lease. Those aged 80 and above will have the option of a 15-year lease. Seniors can choose to retain up to a maximum of 35 years of lease. 

National Development Minister Khaw Boon Wan had earlier said there are concerns about outliving the 30-year lease, while others feel the 30-year lease could be too long for those who are older.

Only about 800 elderly households have taken up the Lease Buyback Scheme since it was introduced in 2009. It is hoped that these enhancements, which will kick in from April next year, might attract more to the scheme. The changes follow Prime Minister Lee Hsien Loong's National Day Rally speech last month, in which he announced that the scheme will be extended to four-room flats.

HOW THE RELAXED CPF TOP-UP REQUIREMENT WILL BENEFIT THE ELDERLY

According to the Ministry of National Development, only two out of 110 joint flat-owners who took up the Lease Buyback Scheme in 2013 were able to retain some cash after topping up their CPF retirement accounts. In comparison, 140 of the 230 sole owners that applied last year were able to retain some cash after topping up their CPF retirement accounts.

Joint flat-owners will now only need to top up their accounts to half the Minimum Sum. Here is how it works: Take the example of Mr and Mrs Wong, a 65-year-old couple whose three-room flat has a remaining 65-year lease valued at S$350,000. If they retain a 30-year lease, they can sell the remaining 35 years to the HDB for S$148,000, which takes into account the flat's depreciation over time. The proceeds are then split equally between the couple, who each get S$74,000.

Under the existing scheme, if Mr Wong has S$20,000 in his CPF Retirement Account and Mrs Wong has S$5,000, they would have had to use all their proceeds to top up their CPF Retirement Account to meet the Minimum Sum of S$155,000. This means they would have received an additional S$810 in monthly CPF Life payouts and nothing in cash.

But come next year, the couple will need to meet only half the Minimum Sum, which would be S$77,500. So after topping up their accounts, this means that Mr and Mrs Wong would have S$18,000 in cash, though their additional monthly CPF Life payouts will fall to S$700.

However, Mr Khaw said that with additional cash proceeds, he is concerned that people may spend or invest unwisely: "My word of advice is, please think a little bit. If people persuade you to invest in some Brazilian property or something ... do not believe those things."

He also urged male senior citizens to use the additional cash proceeds to top up their wives' retirement accounts, if they had no other immediate needs. He said: "You are talking about this age group where most of the homemakers will not have much CPF and therefore not much in their retirement accounts.

"So I think it is the duty of the men now that you have this additional cash proceeds. Our rules do not mandate it, but you can voluntarily use it to top up your wife's retirement account, which I think is the proper thing to do, the responsible thing to do and also it is the wise thing to do, because where else can you get such high interest rates like in CPF?"

Today, about 290,000 HDB flats are owned by Singaporeans aged 55 and above, with about 80 per cent of these flats fully paid up, with no outstanding mortgage loan. So besides taking up the Lease Buyback Scheme when they reach the CPF drawdown age, seniors can also choose to sublet, or right-size to a smaller flat should they need the additional retirement income.





PARLIAMENT: LEASE BUYBACK SCHEME

Value of flat lease determined by market: Khaw
The lease is calculated based on the flat’s market value with its full remaining lease, less the value of the first 30 years of lease and any outstanding housing loan, Minister for National Development Khaw Boon Wan said.
Channel NewsAsia, 8 Sep 2014

Under the Lease Buyback Scheme (LBS), the value of the flat’s lease is determined from the market value of the flat, based on industry-accepted standards and valuation practice, Minister for National Development Khaw Boon Wan said in Parliament on Monday (Sep 8).

Under the scheme, eligible seniors can choose to retain part of their flats' lease and sell the remainder back to the Housing and Development Board (HDB) for retirement income. Authorities had announced enhancements to the LBS last week, to allow greater flexibility and more seniors to benefit.

In Parliament, questions were raised as to how the sales proceeds for those participating in the scheme are calculated.

Ms Foo Mee Har, MP for West Coast GRC, asked: "Even when the duration of the lease sold to HDB is equal to the duration of the lease retained by the owners, why are the sale proceeds to owners lower? How does HDB calculate the depreciation in determining the value of the lease that they purchase? Would they vary the depreciation rate depending on the years of lease retained? How is the calculation done?"

Mr Khaw responded: "So it doesn't mean that for the first 'X' years of a lease to be retained, its value will equal the tail-end of the lease that the owner is selling to HDB. It is not a straight line."

Mr Khaw pointed to two reasons for this. The first is the time value of money - a thousand dollars today is worth more than a thousand dollars in 35 years’ time. The second reason is that properties with a shorter outstanding lease tend to depreciate faster than properties with a longer lease.

Mr Khaw said: “The end result is, if I may use the example that the member (Ms Foo) gave, which is a 50-50, equal period. The valuers are likely to value the first part of the lease, which will be retained by the owner, at about maybe 60 per cent. So instead of 50-50 share of the full value of the lease, it will be roughly 60-40. So the lease that they are selling is probably worth about 40 per cent of what the market value of the lease is today."

The restrictions imposed on flats under the LBS are also taken into account as those under the scheme cannot sublet the whole flat, nor sell the unit in the open market. They can, however, choose to sublet a room.

 In response to Ms Foo's question about how HDB determines the value of the lease under the scheme, Mr Khaw said: “The Lease Buyback Scheme proceeds is the market value of the flat with its full remaining lease, less the value of the first 30 years of lease retained by the household and any outstanding housing loan.”

A professional valuer from HDB’s Panel of Private Valuers first assesses the market value of the flat with its full remaining lease, after a physical inspection of the flat and reference to recent comparable market transactions, Mr Khaw said.

“Adjustments are made to reflect restrictions placed on the LBS flat - namely no subletting of whole flat and no resale. Because of these adjustments, the LBS proceeds are higher,” he said.

OTHER QUESTIONS ON LEASE BUYBACK SCHEME


Flat owners who have spare bedrooms can choose to sublet them after taking up the LBS, Mr Khaw said. There are no plans to relax the minimum occupation period which is applied to the purchase of all HDB flats, he said.

Another question that came up was what happens to flats under the LBS, if they are chosen for the Selective En-Bloc Redevelopment Scheme (SERS). Mr Khaw said these households will receive compensation based on the balance lease of their flat at the time of the SERS announcement.

The Ministry of National Development said this compensation will be the market value of the balance lease or the Lease Buyback refund value, whichever is higher. The market value varies according to the property market situation and the flat's remaining lease, while the refund value is what the owner under the scheme would have received if he terminated the lease voluntarily.

They will also get SERS re-housing benefits. This includes the option to buy a new replacement flat with the same balance lease as their LBS flat or a fresh 99-year lease, at a subsidised price.






Why unsold lease is worth more than portion sold
'Time value of money', different rate of depreciation the reasons: Khaw
By Janice Heng, The Straits Times, 9 Sep 2014

 IF A Housing Board flat owner keeps half his remaining lease and sells the other half back to the Government, what he keeps is worth more than what he sells - even though the number of years for each is the same.

This aspect of the Lease Buyback Scheme has puzzled many and yesterday National Development Minister Khaw Boon Wan explained what was behind the unusual situation. The reason, he said, is that a property's value does not fall at a steady rate.

First, there is the so-called "time value of money".

Under the scheme, a flat owner keeps the next 30 years of his lease. The Government pays now to buy the far-flung remainder of the lease - say, the final 30 years.

But $1,000 today, for instance, is worth more than $1,000 in several years' time, said Mr Khaw.

This is why the immediate half of a lease is worth more than the future half.

Second, properties with a very short lease left tend to depreciate faster than properties with a very long lease remaining.

As a result, when half the lease is kept and half sold, the first half is likely to be valued at about 60 per cent and the second at 40 per cent, said Mr Khaw in reply to Ms Foo Mee Har (West Coast GRC).

He later added that this 40 per cent, which the owner receives, is already higher than would be the case under "strict computation".

The first half of the lease is rightly worth 75 per cent, and the other half just 25 per cent. But that would mean much lower proceeds under the scheme.

This is why HDB introduced conditions. Owners who have sold part of their lease cannot resell the flat and cannot sublet it entirely, though they can sublet rooms.

"Because of those conditions put in, when valuers value the front end of the lease to be retained, they take that into account and discount it," he said.

This is why the second half is worth 40 per cent instead of 25 per cent. "So that enables the Lease Buyback Scheme to be a lot more attractive and to be a lot more meaningful to the owners."

He was replying to Workers' Party MP Png Eng Huat (Hougang), who wanted to know why such restrictions existed.

The need for substantial sales proceeds is also why HDB requires at least 20 years of lease to be sold back, Mr Khaw told Ms Lee Bee Wah (Nee Soon GRC).

Mr Hri Kumar Nair (Bishan-Toa Payoh GRC) wanted the Ministry of National Development to reveal how its calculations are made.

"How valuers value properties is not secretive," replied Mr Khaw. "It's an established practice and there are tables which are published by valuers." If owners object to the valuation of their flats, they can appeal, he added.

Ms Foo and Mr Baey Yam Keng (Tampines GRC) wondered how property cycles would affect the scheme as payouts are based on market value.

Mr Khaw said the ups and downs of the property market will affect all monetisation options, from lease buyback to selling one's flat and moving into a studio apartment. The key is proper counselling so that a flat owner is aware of all the options, he said.

Since the Lease Buyback Scheme began in 2009, 1,083 seniors from 812 households have taken part in it.

The sales proceeds go towards topping up their Central Provident Fund savings which are used to buy the CPF Life annuity.

The average monthly annuity payout for people in the scheme is $550. The highest payout is $1,200, and the lowest $50, which was for an owner with only a 5 per cent share of the flat.





Lease buyback: Owners can still benefit from SERS
By Janice Heng, The Straits Times, 9 Sep 2014

A FLAT owner who has sold part of his lease back to the Government will still benefit if his flat is up for redevelopment, National Development Minister Khaw Boon Wan said yesterday.

He was fielding questions from five MPs about the Lease Buyback Scheme, under which Housing Board flat owners keep 30 years of their lease and sell the rest back to the Government.

From April next year, the scheme will have greater flexibility, like a range of lease lengths.

If such a flat later falls under the Selective En bloc Redevelopment Scheme (SERS), the owner will be compensated based on the market value of the remaining unsold lease, said Mr Khaw.

Under SERS, old estates are redeveloped, and affected owners get compensation and rehousing benefits, including new replacement flats at subsidised prices.

Those who have taken up the Lease Buyback Scheme can choose a replacement flat with the same remaining lease as their existing one, or one with a fresh 99-year lease at a subsidised price, said Mr Khaw.


Such owners will not be left homeless, said Mr Khaw.

"HDB will look into the circumstances of each case to work out an appropriate housing arrangement, taking into account the elderly owner's health condition, financial status and the availability of family support," he said.

This is done on a case-by-case basis as the owner could be bedridden, for instance, and thus may need a place in a nursing home rather than a flat. The HDB would work with the Health Ministry to ensure the owner is "well- placed", said Mr Khaw. This will depend on whether his children, if any, are able to look after him.

The lease can also be extended, taking a cue from studio apartments that are sold on 30-year leases. For these, the HDB commits to a 10-year lease extension at the prevailing market value.

From April, flat owners opting for the Lease Buyback Scheme can choose to keep a 35-year lease. "Those who are concerned about outliving their lease can take up this longer lease option," he said.

Insurance is another option the Government is studying, said Mr Khaw. Flat owners could buy insurance such that, if they outlive the committed lease, the insurer takes over and pays for the extra lease needed.

But the downside is that if the owner dies before the lease is up, he will lose the remaining value.

This is in contrast to the current practice, which is that any unconsumed lease will be refunded to the owner's estate, he said.





Those outliving lease under LBS won't be left homeless
HDB's restrictions on LBS flats enhance value of retained lease: Khaw
By Lynette Khoo, The Business Times, 9 Sep 2014

The Ministry of National Development (MND) made it clear on Monday that under the Housing & Development Board's (HDB) lease buyback scheme (LBS), those who outlive the remaining lease of their flat will not be left homeless.

The ministry is also studying the option of insurance for the elderly to insure against the likelihood of their outliving the lease.

Minister for National Development Khaw Boon Wan noted, however, that such an insurance scheme "cuts both ways".

The benefits of such insurance are restricted only to a minority who outlive the lease, while there is downside for the majority, who will have to forfeit having any unconsumed lease refunded to their estate beneficiaries.

"Our commitment is nobody will be left homeless," Mr Khaw said. "The HDB will look into the circumstances of each case to work out an appropriate housing arrangement, taking into account the elderly's health condition, financial status and the availability of family support."

Mr Khaw was fielding questions from Members of Parliament (MPs) who raised concerns about the elderly outliving their retained leases under the LBS, which allows the elderly to monetise their flat by selling the tail-end of the lease to the HDB.

MP Baey Yam Keng asked the Minister if the HDB could specify the value of lease extensions when an elderly signs up for the LBS. Mr Khaw explained that the government "cannot commit to something so uncertain" due to the market vagaries of property prices.

Those who are concerned about outliving their lease can take up the option of retaining a maximum lease of 35 years under the enhanced LBS from April next year, he said.

Under the enhanced LBS that kicks in next April, joint flat owners only need to top-up to half the age-adjusted Minimum Sum, which allows them to receive more proceeds in cash than before, but still subjected to a cap of S$100,000. The scheme is also extended to four-room flats and households with income of up to S$10,000.

Mr Khaw pointed out that as for LBS flat owners whose flats are selected for the Selective En bloc Redevelopment Scheme (SERS), they will receive compensation for the residual lease of their flat and also SERS rehousing benefits. Compensation for the residual lease will be based on either the market value or the stated refund value, whichever is higher.

Other MPs also asked how the HDB determines the value of the lease under the LBS.

Mr Khaw explained that the flat is valued by a professional private valuer appointed by the HDB, based on widely accepted industry standards and valuation practice. But how the value is split between the front-end retained lease and the tail-end sold lease is "not a straight line depreciation" due to the time value of money and that property with a shorter outstanding lease depreciates faster than one with a longer lease.

Going strictly by industry valuation standards, valuers are likely to value the tail-end of the lease much lower than the lease retained by the owner, Mr Khaw said. This is why the HDB disallows subletting of the entire flat or resale under the LBS, he added. "When valuers value the front-end of the lease to be retained, they take that into account and discount it, so instead of the 75-25 split, it then ends up roughly 60-40."

The significant improvement of value of the tail-end lease sold to the HDB results in higher cash proceeds for the owners - making the LBS "a lot more attractive and meaningful to the owners", Mr Khaw said.

He noted that the property cycle can affect all monetisation options, whether it is lease buyback, right-sizing or disposing the flat.

The key is to make sure that there is proper counselling so that the flat owners are fully aware of the options and do not rush into making a decision, he said.





Sold on revised Lease Buyback Scheme
By Loh Keng Fatt, The Sunday Times, 21 Sep 2014

Like some of my friends, I see no need to bequeath property to my children if they have the means to buy their own homes.

So, what will I do with my house?

When I retire, I intend to sell it and use some of the proceeds to buy a lower-cost property - most likely a resale Housing Board flat.

Ideally, since I will not be handing over the flat to my sons, I will be able to use it only for as long as my wife and I expect to live.

And this is where the revisions to the Lease Buyback Scheme - where HDB flat owners sell back part of the remaining lease to the Government - have caught my attention, for they seem to dovetail nicely with my financial planning for old age.

I think there is merit in opting to retain the lease of a flat for 15, 20 or 35 years and, in the process, get to monetise the asset.

The HDB cites an example where a couple, aged 65, are joint owners of a paid-up four-room flat worth $450,000, and with a 65-year lease remaining.

If they keep 30 years of the lease and sell the other 35 years under the Lease Buyback Scheme, they will get $190,000.

There is a $100,000 cap on the amount that they can receive in cash, with the rest - if both owners have already fulfilled their Minimum Sum requirements - going to their Central Provident Fund Retirement Account, which pays a decent 4 per cent interest rate.

The scheme is now also extended to owners of four-room HDB flats, in addition to those with smaller units.

There is also greater flexibility for the owners to choose the number of years of the lease to keep, from 15 to 35 years.

These changes are in sync with my plans to buy a four-room resale HDB flat - I like the luxury of having some space - perhaps in Punggol with its waterfront living.

But I am more excited about another rule revision.

The Lease Buyback Scheme eligibility is now expanded to applicants with household incomes of up to $10,000 a month, up from $3,000 previously.

This will allow my two sons - they should be working by the time I retire, and if their pay is not too high - to continue living with my wife and me until they get married and move out.

If they moved out and my wife and I worked part time, our combined salaries would unlikely breach the $10,000 limit.

Applications under the revised scheme will be accepted from April 1 next year, but I am already quite sold on it.

Given that one can expect to live 30 years after retirement, I believe others will also find the revamped scheme a viable option in fine-tuning their housing and financial strategy in old age.

There is one other condition to be met - the home owner must have lived in the flat for five years before applying for the scheme.

But what is five years of waiting in return for greater financial security - with more funds freed up - for many years of old age ahead?

While I won't be leaving my sons any property, I would like to use some of that money to help them buy their first homes.





What happens to excess proceeds from lease buyback plan?
By Arthur Lim, TODAY Voices, 10 Sep 2014

I refer to the report “MPs ask how flats in lease buyback plan are valued” (Sept 9). While the National Development Minister has addressed the subject of how valuations are computed and what would happen if a flat comes under the Selective En bloc Redevelopment Scheme, another pertinent issue needs more clarity.

The minister mentioned that proceeds from the lease buyback must first be used to meet the Minimum Sum and any balance would be paid in cash, capped at S$100,000.

What happens, though, if there is a further surplus, which should rightfully be disbursed to the owner(s) and not be bound by the cap? Where does it go to?

Secondly, what happens should one or both owners die before the lease expires? What would be the basis for computation?

It would be helpful if ministries could spell out detailed information when announcing policy changes, especially in areas such as healthcare, housing and education, to provide better transparency.






Excess proceeds of lease buyback will be disbursed to owners in cash
By Lily Chan-Wong Jee Choo, Director (Policy & Property), Housing & Development Board, TODAY Voices, 26 Sep 2014

 We thank Mr Arthur Lim for his letter “What happens to excess proceeds from lease buyback plan?” (Sept 10).

The Lease Buyback Scheme (LBS), one of various monetisation options for elderly flat owners to supplement their retirement income, will be enhanced from April 1 to benefit more elderly households and offer greater flexibility to meet different needs.

The four enhancements are: Extension of the LBS to four-room flats; higher monthly household income ceiling of S$10,000; relaxed requirement for households with two or more owners to top up their Central Provident Fund Retirement Accounts (CPF RAs) with the LBS proceeds; and flexibility for households to choose the length of lease to retain.

The proceeds will first be used to top up the owners’ CPF RAs. The rest — up to S$100,000 — will be disbursed to them in a cash lump sum.

Sole owners must use the proceeds to top up to the age-adjusted prevailing Minimum Sum (MS).

For households with two or more owners, from April 1, each owner will only need to use his share of the proceeds to top up his RA to half the age-adjusted prevailing MS.

If the household’s remaining proceeds are not more than S$100,000, the owners will receive this all in cash.

If the remaining proceeds are more than S$100,000, each owner will use his share to further top up his RA to the prevailing MS. They will receive proceeds of S$100,000 (or more, if they have met the prevailing MS) in cash.

If an owner dies, any remaining lease will be passed to his beneficiary, who can either continue living in the flat for the remaining lease or return it to the Housing and Development Board (HDB) for the residual value of the lease.

The owner’s remaining CPF monies will be distributed to his nominees. If no CPF nomination was made, the monies will be distributed to his family members according to intestacy law or Muslim inheritance laws.

The HDB has financial counsellors to provide personalised advice to interested seniors.

Those who wish to learn more about the LBS or other monetisation options may visit any HDB branch or call the HDB branch service line (1800 225 5432) (8am to 5pm on weekdays). More information on the LBS can be found at http://www.hdb.gov.sg/cs/infoweb/residential/living-in-an-hdb-flat/for-our-seniors/lease-buyback-scheme.

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