Central Provident Fund (Amendment) Bill

Debate resumed.

4.02 pm

Mr Zainudin Nordin (Bishan-Toa Payoh): Sir, the CPF scheme was established since 1955. In the early days, this compulsory saving scheme was started to serve the basic needs for retirement of our workers.

Sir, I read in the 2009 Annual Report of the CPF and discovered that when it started back in 1955, it only had 0.18 million members and about $9.1 million in its account. In 2009, it was reported that CPF had more than 3.29 million members and more than $166 billion in its account. What a transformation for Singapore and its workers.

We all know that the CPF has evolved, serving beyond the basic needs of retirement alone. Some of our workers even questioned the need to evolve the CPF scheme to what it is today. As an example, the monies in the Ordinary Account may be withdrawn for a range of purposes, including housing and approved investments. It is estimated that withdrawals for housing and investments alone represent more than 75% of all CPF withdrawals. So for our ageing population and workers, there are questions that were raised on whether the CPF scheme would be adequate for their retirement. As an example, for the OECD countries, the retirement payout for the workers is in the order of 57% of the last pre-retirement income. Thus, it would be interesting for us to know what it would be for our workers in Singapore when they retire some day.

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With the evolution of the CPF, Sir, I am very happy to note that the proposed amendment to be made today is, in my view, something which is very humane and a positive direction for our workers. The proposed Special Needs Savings Scheme (SNSS) demonstrates that our Government has taken this proactive step to help families of persons with disabilities. I am also glad that, beyond just allowing for the creation and transfer of such monies, the Board will also continue to pay interest on the amount that is transferred to the accounts of persons with disabilities.

Sir, may I propose a few suggestions, beyond just allowing for this to happen? May I suggest: (1) for the Government perhaps to look at and consider the contributions of the persons or siblings or relatives into his account in a different light, for example, to offer some kind of tax write-off or special tax exemption for the contributors; and (2) to see if there are ways to offer a higher interest rate for the accounts of the persons with disabilities. It will also go a long way to grow the amount of money in the account to help these persons with disabilities.

The other proposal on the question of the reversal of contributions from the various CPF accounts is a positive move. But it would be good for the Ministry to explain why in the very first place these restrictions were put in place; at the same time, for the Ministry to study whether in the long run the movement between the accounts might have a detrimental effect on the retirement savings of our individual workers.

Sir, beyond just the CPF account evolving into helping our workers to cope with the future challenges, it would be worthwhile for us to think again about the basic needs and the requirement for our workers when they retire. Sir, with that, I support the Bill.

4.06 pm

Mr Yaw Shin Leong (Hougang): Mr Speaker, Sir, while I acknowledge the intent behind the Bill, there are two areas which I wish to seek further clarity.

First, the Special Needs Savings Scheme introduced by this Bill allows parents to nominate their children with special needs to draw a monthly cash payout, receive Medisave transfers or a combination of both after the parent has passed on. The statutory provisions, as they are drafted, give wide discretion to the CPF Board and MCYS to decide the amount and method of making the payouts to the nominee. Three parties – the parent, the Board and MCYS – could potentially be involved in the decision on how much to pay the SNSS nominee and how these payments should be made. It should be kept simple: the parent's wishes expressed in the nomination should come first because parents will know the needs, which include financial needs, of their children best. If the parent's nomination is unclear, only then should the MCYS be allowed to exercise its discretion. This will reduce the risk of slip-ups in coordination between the Board and MCYS. What areas of concern does the Board have that make it necessary for the wide discretionary powers?

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I also note that under the proposed section 25(1C), the Minister for Community Development, Youth and Sports will decide whether the child qualifies as a nominee under this scheme. If the Minister does not issue the certificate of eligibility, the applicant can apply back to him for reconsideration under section 25(1E). There is a concern that this avenue of reconsideration may not be effective since, according to the Bill, the reconsideration is being done by the same person who made the decision in the first place, ie, the Minister. I note that the Minister can delegate one or both of these powers to others, as allowed by section 25(1H). How does the Government intend to ensure that the reconsideration is done with fresh eyes and it is not just a formality?

Second, CPF LIFE payouts and Minimum Sum withdrawals are an important source of regular income to retired Singaporeans. However, the proposed changes to sections 27Q and 77(1)(o) allow the Board to pay the CPF LIFE payouts and the Minimum Sum withdrawals by a member who reaches 55 into that member's account. Our retirees need their CPF LIFE payouts and Minimum Sum withdrawals in cash for their living expenses. Could the Minister clarify why does the Board need the power to pay these payouts and withdrawals to the member's CPF account instead of in cash? It is rather strange that a member can finally withdraw and enjoy his hard-earned savings from CPF at 55, only to have the Board put it back into his CPF account. Under what circumstances will the Board exercise these powers?

4.09 pm

Mr Christopher de Souza: Mr Speaker, Sir, I thank you for allowing me to join this debate. I rise in support of this Bill, especially the introduction of the Special Needs Savings Scheme (SNSS). This scheme marks an important step in the creation of a more inclusive Singaporean society where not just the needs of the able-bodied are taken care of but also that of the more vulnerable in society. Indeed, the concerns of persons with special needs must all the more be pro-actively addressed. The introduction of the SNSS is to be much lauded as it enables parents to ensure that after their death, funds in their CPF accounts can be regularly disbursed to cover the child's needs until exhausted.

Currently, the CPF savings of an individual who dies are distributed to his nominees as a lump-sum payout. The scheme does help parents provide for the financial security of children with special needs by encouraging them to save for their children's long-term needs. This is a timely response to the concerns raised by families with special needs in recent years. Many parents are concerned about pre-deceasing their intellectually-disabled children, yet do not have the means to set up their own private trusts. Although there is at present a modest trust scheme offered by the Special Needs Trust Company, the firm requires a minimum set-up sum of $5,000.

The SNSS is thus a welcome step forward for low-income families who do not have the means to buy insurance for their children. This is especially pertinent, as many persons with special needs, unlike non-disabled citizens, are not covered for basic health insurance coverage. The SNSS is notably a culmination of some of the recommendations of an MCYS-appointed Parents' Workgroup for the enhancement of financial security for people with special needs.

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While it is heartening that the Government has accepted the CPF as an avenue of saving for a person with special needs, the scheme must be complemented by other measures to be an effective one. There is no one-size-fits-all solution. The parents' concerns for their children with special needs extend beyond financial issues, with many expressing concern for the lack of employment prospects and care-giving options for adult children with special needs.

In line with this, I strongly urge the Government to consider providing more resources and infrastructural support to this segment of the population. For a start, current basic health schemes, such as the MediShield and ElderShield schemes, should be reviewed so that persons with special needs would be able to enjoy the same level of benefits as non-disabled persons. In addition to the CPF as a savings mechanism, a non-profit special needs trust could also be established as another self-help mechanism.

The issue of the lack of preparedness for the financial security of persons with special needs in Singapore must be pro-actively addressed. In particular, the Government should not take lightly the fears and anxieties, many of whom are struggling with their own current financial needs as well. Reports by the relevant workgroups describe a general mood of anxiety and, at times, helplessness, when asked about their biggest concerns for their children after they are no longer able to care for them.

The introduction of the SNSS is, therefore, certainly a step in the right direction. It reflects how we, as Singaporeans, are beginning to consider those with special needs as part of the collage and tapestry of our society, and an integral part, and rightfully so. The question now is what more can be done on the part of the Government to facilitate their integration into society as well as ease the burden on their parents in providing for them financially.

On another note, Mr Speaker, Sir, I would also like to express my support for allowing transfers to be made from the Special to Ordinary accounts. The availability of this option would be undoubtedly useful in the event of a vast change in circumstances suffered by the breadwinners, particularly in light of the flexibility offered by the latter account. Mr Speaker, Sir, I support the Bill.

4.14 pm

Mrs Lina Chiam: Mr Speaker, Sir, I support the spirit behind the Special Needs Savings Scheme which this Bill seeks to create, in that the Government is not leaving it to trust funds provided by private companies for the care of children with special needs.

However, this scheme does not go far enough. It is a very small step. Though in the right direction, it is not clear how this new scheme is very much different from the existing nomination procedures or the intestate succession laws when a CPF account holder passes away. The Government should not retain a person's CPF money in the inheritor's CPF account in the first place. It should be paid out in cash to the recipients and nominees. Otherwise, as the withdrawal age goes up, the CPF funds will be locked up in the CPF account forever.

Mr Speaker, Sir, here I am compelled to cite one common criticism of the CPF: that the CPF scheme takes up a sizeable portion of the income of people with lower incomes, forcing them to consume less in the short term. For parents with special needs children, this arrangement adds to their heavy financial burden. So, instead of disbursing CPF money to a nominated child with special needs only after the parents' demise, would the Government not consider disbursing these funds earlier, when the parents are still alive? I hope, however, that the Government will not count this as an additional source of income when evaluating public assistance eligibility for rental flats and means testing for healthcare.

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For parents with insufficient or no CPF savings at all upon their death, this Special Needs Savings Scheme will be of no benefit to their special needs child. Would the Government not consider using revenue surpluses, such as the casino tax, to top up the CPF accounts of these parents with insufficient CPF savings when they pass away? I understand that the revenue collected last year from betting taxes which the casino is reported under amounted to some $2.1 billion or 4.5% of the total operating revenue collected by the Government last year. Surely, we can spend some of this money towards helping the less fortunate in our society. Mr Speaker, let us not underestimate the financial burden faced by parents in such situations.

4.16 pm

Assoc Prof Fatimah Lateef (Marine Parade): Sir, I stand in support of this Bill. I would like to highlight three points. Two months ago, I met a lady during my house visit. She was 42 years of age, working as a dishwasher at a restaurant. She lived with her 18-year old daughter. Nothing unusual at first, but her daughter is a special needs person. She made a request for me to help look for a simple kind of employment for her daughter who is out of school already, and she said that this would make her feel at ease in case she passes on. This is a real concern for many families with special needs members. Thus, the Special Needs Savings Scheme is indeed long awaited and welcome for such families. The monthly instalment payout will contribute towards maintenance of such persons. I also applaud the fact that now the Medisave Account can be used by these persons as well due to the nominations of the parents, because it is the special needs persons who often need long-term and very regular medical follow-up. At least, this would ease their burden.

My second point: the easier administration of CPF monies when a member's death date cannot be accurately ascertained is another welcome move in this amendment. Here, again, let me share an example. I met a family member of Mdm A at my Meet-the-People Session who had problems getting the actual date of her death, and you may ask, why so? Thus, they could not settle her CPF monies. This was because when she passed on, she was in a rural remote village in China, her hometown that she had gone back to and they did not have any follow-up documentation nor processes in place. What they could do was just bring me some very old-fashioned printed photographs of her funeral procession. Thus, Sir, with this Amendment Bill, hopefully, families like Mdm A will have it easier and a more positive experience.

My third and final point is on allowing transfers of the Ordinary and Special Accounts to the Medisave Account. Many of my middle-aged and retired citizens welcome this new flexibility. In the last five years, I have indeed made many representations for them. This is exactly the kind of move and enhancement Ministries should come with policies in order to adapt to the dynamic situations and changes as well as evolving needs observed in our community. I support the Bill.

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4.19 pm

Ms Denise Phua Lay Peng (Moulmein-Kallang): Sir, I stand in support of the proposed CPF (Amendment) Bill. As kindly pointed out by the Minister of State, one of the key provisions of the amendments – the Special Needs Savings Scheme (SNSS) – owes its origin to a 2006 Parents' Workgroup on Enhancing the Financial Security of Persons with Special Needs. Thanks to the then MCYS Minister Vivian Balakrishnan, the workgroup which I led, spoke to close to 100 parents and consulted many experts in the field. Several interesting findings surfaced during the time. We found that parents were most worried about two things when they pass on. One, will there be sufficient money for their vulnerable children to live on when the parents die; and, two, will there be someone to care for their children when the parents are no longer alive to look out for them? I remember one parent wanting to make sure her disabled child dies first so that she herself can then die in peace. If the child does not, she sadly shared that she may need to kill him first. That was how desperate some of them were.

As a result of the work plan and other advocacies thereafter, MCYS – and I am grateful for that – adopted and implemented several recommendations to help the disabled over the last few years. Some of the key measures taken were the setting up of a one-stop disability help agency, the Centre for Enabled Living; the setting up of a Special Needs Trust Company to cater to the middle-income families who cannot afford a private trust; and now with the help of MOM, the amendment of the CPF Act to implement a Special Needs Savings Scheme.

The recommendation that led to this Bill was a response to the persistent calls by parents at that time for a safe and accepted Government-linked avenue for savings. The workgroup specifically then recommended the following:

(1) That all parents were allowed to open a CPF account for their child with special needs and to make voluntary contributions towards it;

(2) That tax relief be granted for these voluntary contributions;

(3) That the voluntary contributions attract an interest rate similar to that of the Medisave and the Special Account in order to encourage more savings. At the time of the 2006 recommendations, the Ordinary Account enjoyed an interest rate of 2.5% whilst those in Medisave and Special Accounts received an interest return of 4%; and

(4) That Government and donors can top up these accounts to further enhance the financial security of the adult children.

Those were the recommendations made in 2006. It is hence with deep gratitude that I thank MOM and MCYS in making the SNSS a reality.

Sir, to ensure that the spirit of the original recommendations is retained, I wish to raise several issues for consideration by MOM and MCYS. These can be broadly categorised into 3Es, namely, expand the scope; encourage savings; and effective education of the families.

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First, expanding the scope. Sir, the first and biggest concern is related to the coverage of people with disabilities in the amendments. The amendments provided two specific criteria for eligibility.

To be eligible, the person with special needs has to either have attended or is attending a Special Education (SPED) school; or require assistance in at least one Activity of Daily Living (ADL), meaning he needs help in washing, bathing, feeding, toileting, transferring, dressing and mobility as assessed by a medical doctor.

Sir, it is important to note that this coverage is quite restrictive and will exclude many others for whom the recommendation was originally proposed. The first eligibility criterion excludes persons with special needs who have not attended any special schools. Sir, there are many of such persons in Singapore who attended or are attending mainstream schools which were willing to accommodate them. Through the charities that I help run, I personally know of students with special needs studying in such esteemed mainstream schools like NUS Maths and Science School and other mainstream schools. These are individuals who may be very strong academically but who may not be financially independent or financially proficient when they become adults. In addition, some people with special needs I know who have, for instance, Down Syndrome or celebral palsy who have never attended a special school all their lives, having been accepted in inclusive mainstream school in Singapore. They should not be excluded from the Scheme.

The second eligibility criterion in the amendment describes mainly disabilities that are fairly physical and severe. Many of us know of people with special needs who are able to wash themselves, clean themselves, move around and feed themselves. Some can even hold down specific types of jobs but they are individuals who too need guidance in money management, employment and need help in making higher order life decisions such as where to live, whom to contact when they are having health issues and even whom to trust.

I therefore seek MOM's explicit clarification that the target beneficiaries of the SNSS will extend beyond those attending or have attended special schools or those who require help in one of the assisted living skills which are primarily physical. I propose that as long as there is professional assessment that the individuals would benefit from such a service, that these people be included. This will take a whole psychological load off the families and disability organisations who find the amendments a tad too restrictive.

Second, encouraging savings. Sir, in view of the fact that the intent of this initiative is to encourage parents and siblings and even other donors to save sufficiently for the financial security of the person with special needs, I urge the Government to consider a few suggestions:

(1) To remove the ceiling for the Minimum Sum topping up, as the people with special needs may require more to live on than the typical CPF member;

(2) To permit the prevailing rate for the Special Account (which is at a higher interest rate) to be extended to the entire sum set aside for the SNSS account;

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(3) For the Government to commit to set aside sums from the budget surpluses to top up the SNSS accounts of the nominees who come from the lower-income groups;

(4) Instead of a drawdown scheme, to allow for the sum set aside in the SNSS for the purchase of a lifelong annuity, just like for the able-bodied CPF members; and

(5) To publicise and encourage the public, including philanthropic organisations and foundations to top up these SNSS accounts. I know of many lower-income families, for example, who have both elderly disabled parents and disabled adult children who would benefit from such top-ups.

In contrary to what hon. Member Mrs Lina Chiam shared, the CPF amendments this time precisely allow for Government and other donors to top up these accounts to help such families.

And, third, effective education of the families. Sir, six years on after the Parents' Workgroup has completed its study, I found that the fears of many parents with special needs children still remain. I think these fears will always remain unless serious efforts are taken to reach out and educate them and nudge them to start taking actions to reduce these fears.

There is a strong need for MOM and especially MCYS to go beyond their administrative duties and ensure these new financial planning options are effectively communicated to the families as a package. From ground feedback, many families remain at the fear-and-anger stage and they have not progressed to taking action to improve the certainty of their own special needs children.

I urge MCYS to further resource the Centre for Enabled Living (CEL), the intended one-stop help agency, so that CEL can play a more effective role in being that one-stop centre to which such families can turn to for counselling and action. Aggressive and proactive outreach to these families must occur. Lay out all the financial planning options, what they are and what they are not and let parents make informed choices. Provide incentives for the early adopters. Communication is not completed until it reaches those who need to know. Most of the options today are not communicated in the language of the intended target audiences, many of whom are not proficient in the English Language nor Internet savvy. Communication must be done in the way that is most effective, in terms of outreach.

Let families know that there are now two options that the Government has provided – one, a no-frills CPF savings avenue in the form of SNSS; and, two, the more deluxe Special Needs Trust. It is time for families with children with special needs, young or old, to start learning and, most importantly, take tangible actions to participate in either one or both of these planning options. And also aggressively let potential donors know how they can top up the accounts of the lower income families who can benefit from such a scheme.

There is no need for the Special Needs Trust Company to restrict itself to its current scope, and claim it is superior to the SNSS. Both occupy different spaces. And by the way, both share the same surname – SNTC, SNSS – SN, for special needs. SNSS is a no-frills option for those who cannot even afford to put up a deposit for the modest trusts offered by SNTC. SNSS users will benefit from some of the current services that the Special Needs Trust Company can offer, such as financial planning, legal advice, and care planning templates and tips. I think they should avoid the silos and provide a total solution from the perspective of the family with special needs, advocating the option that best meets the families' circumstances. Anything that is worth doing is worth doing it well.

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In conclusion, Sir, I wish to thank again, from the bottom of my heart, and commend MCYS and MOM for amending the CPF Act to provide a basic and safe savings avenue for families with special needs children in our country. I conducted a quick SMS poll of close to 20 families over the weekend and almost all of them said they would join the Scheme if it is attractive enough and they are very eager to find out more. I urge the Ministries to turn this positive desire to actual action that will then enhance the financial security of the people with special needs in our country. We need to help move families from fear to action. Only when action is taken, can the fear of the uncertain future of their special needs children be conquered.

Sir, as they always say, the maturity of the nation is reflected in how it takes care of those who are disadvantaged. This Bill is another clear step taken by the Government towards a more mature and progressive nation. Sir, I strongly support the Bill.

4.33 pm

Ms Ellen Lee (Sembawang): Mr Speaker, Sir, I rise in support of the Bill. This Bill should raise the spirit of parents with disabled children and give hope to caregivers of disabled children. Their top concern has always been who and how their children will be cared for when they are gone. While I applaud the Ministry's move to alleviate the constant worry of these parents, I am concerned about how this is likely to be perceived by some Singaporeans.

My first concern about the Special Needs Savings Scheme is how it will be explained to these parents. The primary concern is whether the country will take care of their disabled children when they are gone. I imagine myself in the shoes of parents who have to provide for one or more disabled children and having one key asset, my flat. I will start by asking, "Will there be enough money to provide for the care of my disabled children till they die? Given the current global overcrowding, energy and food shortages, the future will be tougher with higher prices for everything. Is the Government going to be inclusive as promised and take care of its citizens, able-bodied or disabled? Will my disabled children be better off with my nominating them? What alternatives do we have?"

How will the Special Needs Savings Scheme allay the fears of parents with disabled children? Many of them already have the perception that they cannot depend on anyone outside their family to help solve their problem. Parents are resigned to the fact that their other able-bodied children or other family members would not be able to assume this tremendous responsibility when they die. I doubt the provision of a modest payout of $250 can help assure any of them. What would go some length to comfort them would be a scheme that can grow the money in the CPF account or a scheme through which the parents' flat is leased to approved tenants for rental income. However, such a suggestion may mean that HDB would have to extend the lease beyond 99 years or a charity be roped in to manage the lease. The point I am making is that one can hardly expect any parent of a disabled child to jump at the provision of so modest a payout when the actual cost of maintenance is so much more. I have heard comments among ordinary citizens that the Government will not want to shoulder the burden of looking after children with special needs, which is a disquieting reflection of the distrust some feel about the Government. We must therefore address this perception by doing more than just amending the CPF Act.

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Let us consider the manner in which the Government can approach parents of special needs children to provide help and support. The hospital or the clinic that diagnoses the condition should be equipped with sufficient resources to provide medical, marital and financial counselling. Parents are often not able to accept the enormity of what they have just learnt. Emotionally, there is a deep disappointment and a strong sense of haplessness, sometimes accompanied by anger, all of which take time and counselling to come to terms with. When they accept the diagnosis, marital counselling is needed to help both spouses understand the changes that have come into their marriage. They also have to work together with the hospital or clinic staff with the expertise to care for their special needs children. It is important that through counselling, parents feel confident that what they do is right for their children. They should be educated about the available resources and networks that the children or they themselves can turn to when they need help to raise their special needs children. They should receive counselling on how to plan financially for their special needs children's education and maintenance, especially if their children have no means of finding employment and are completely dependent on parents and family in their daily living. Transferring money from the parents' CPF account to the special needs child's account can then be an option but more options would need to be provided for, for example, different special needs trusts, if we want to show these parents that the Government will deliver on the promise to take care of all Singaporeans.

The Government cannot control everything and that it should not. Every Singaporean has a part to play in building an inclusive and a caring society. Inclusiveness, tolerance, compassion cannot be legislated. But we can instil in our citizens the important values of care and concern, particularly for the less fortunate. Our country's success should also be measured by how well we take care of our weak and disabled. Let us invite competent charitable and welfare organisations to help manage special needs trusts that can supplement the income from the CPF accounts of parents with special needs children. Let us also emphasise in schools the importance of compassion and acceptance of special needs children through understanding how they are different and unique individuals and how those who are high functioning can be a part of mainstream education. Let us do more to eliminate prejudiced views about people who are different from us and raise our children in a more tolerant environment that emphasises respect for people and our common humanity.

For caregivers who devote their time to care for special needs children but are not their biological parents, we should consider more outreach and support in the form of counselling services and tax relief. It is important that caregivers have the support they need in order to continue the challenging task of providing a stable and affectionate home environment to special needs children. At work, employers can be more thoughtful in giving time off to care for a sick child or discuss with the school, issues highlighted by the teacher in class. The Government can extend help to set up support groups near the homes of caregivers or where they can easily go to for help when they feel they cannot cope. Caregivers of special needs children deserve more support as they are shining examples of loving devotion to the needy. Our children should look at them as role models.

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Mr Speaker, Sir, the Government must assure the people of Singapore that any change that is proposed that can affect their lives is done for their benefit, with their welfare or their children's welfare in mind. Explain and convince the people that every effort is made to deliver on the promise to build an inclusive society based on justice and compassion. However, the people must do their part as well.

4.40 pm

BG [NS] Tan Chuan-Jin: Mr Speaker, Sir, I thank Mr Zainudin Nordin, Mr Yaw Shin Leong, Mr Christopher de Souza, Mrs Lina Chiam, Dr Fatimah Lateef, Ms Denise Phua and Ms Ellen Lee for their thoughtful speeches.

I think I speak also for my colleagues from MCYS in saying that we appreciate the constructive comments on SNSS and, more broadly, what can be done to support those with special needs.

Before I respond to the comments on SNSS specifically, I would like to share that we deliberated on a number of these points when we designed the scheme. Some had been received as feedback during our earlier consultations with parents and the community. I think this is an important point to emphasise. This is an effort that has come about from working with the parents who have children with special needs. Many suggestions were taken in to make the scheme as helpful to parents as possible. An important consideration that shaped our efforts was the need to ensure that the scheme would be widely available at no charge so as to ensure good coverage for Singaporeans. Hence, the scheme had to be kept simple and streamlined.

Though we could not include every feature or suggestion, we have included the important ones that matter and we will consider to look at it to refine it as time goes by. Allow me to make a very simple response to our Member, Mrs Lina Chiam's comments about the Bill.

This Bill was created with the inputs from parents with children with special needs. It is meant to help them. And I believe Members have heard Ms Denise Phua's comments. I think this is important even as we set forth to criticise. It goes a long way. It is not just an amendment to the Bill. These are fundamental changes which we are putting in place along with the SNTC that is already in place and together with the programmes and the roadmap that MCYS has put in place to look at this sector. I think it is important to acknowledge.

On the issue of eligibility for SNSS, Ms Denise Phua is concerned about those who are physically fine and do not need assistance with any of the six Activity of Daily Living (ADLs), but who may instead have some mental impairment. Many of such individuals would, in fact, qualify for SNSS under the alternative criteria of SPED school attendance. Similarly, those who are not intellectually disabled, but have other special needs physically, could be covered under the ADL criteria if their physical disabilities are serious enough. But I would like to address the wider point the Member is making: whether the eligibility criteria are sufficiently broad enough. To answer this, let us remain mindful of the intended group the scheme was designed for: persons with disabilities who cannot support themselves. This is the basis of the current eligibility criteria. The ADL criterion covers most of those who cannot live independently due to their disabilities, while the SPED school criterion covers those with more moderate to severe disabilities for individuals unable to attend mainstream schools. In this sense, the eligibility criteria cover the target group fairly well.

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Nonetheless, to ensure that eligibility is administered in a flexible and compassionate manner, the appeals channels that I mentioned earlier would allow MCYS to consider and approve on a case-by-case basis, deserving applications that do not quite meet the eligibility criteria. Before we consider any extension of eligibility, let us implement the scheme, encourage a healthy take-up rate, and constantly review it. In the meantime, I hope this clarifies Ms Denise Phua's concern and to assure her that there will be room for flexibility on who can use the SNSS. We do thank the Member for the inputs. Her points raised, for example, on autistic children, are things that we need to continue to look at and to factor in how best to refine the eligibility criteria as we go along.

In terms of design, Ms Denise Phua has suggested that SNSS be set up as a life-long annuity rather than as a draw-down scheme. While I appreciate the peace of mind that the life-long stream of income would bring – and I think others feel that way as well – an annuity may not be always appropriate for this group. Some SNSS nominees have shortened life expectancies while others could live for as long as you and I do. Furthermore, annuities need a large pool to work. It is unclear whether the numbers would be large enough for risk-pooling. But all things considered, it would be challenging to provide an annuity. Having the SNSS as a draw-down scheme would, on balance, be practical and effective for most.

Mr Yaw Shin Leong expressed concern about MCYS' room for discretion. In fact, I would like to assure the Member that parents do determine the amount of monthly payout for their nominated children with disabilities at the point of application, subject to the minimum amount of $250. Mrs Lina Chiam also contended that this is no different from the scheme before. However, there is a difference, for example, in terms of the payout on the demise of the parents, it would have previously been a lump sum, but now we are changing it to allow monthly payments. On Ms Denise Phua's suggestion that SNSS nominees be allowed to participate under CPF LIFE, the answer is that they are currently not prohibited from doing so. Separate from SNSS, parents may set aside funds in the SAs of the special needs children for the purchase of a life annuity. That is possible.

There is no minimum balance required to join CPF LIFE but payouts under CPF LIFE would only commence at draw-down age which is 65 years for those born in 1954 and after. Parents should check whether CPF LIFE meets the requirements of their special needs children.

In terms of sufficiency, which is an important concern, Mr Zainudin Nordin and Ms Denise Phua have suggested offering favourable interest rates to help build up SNSS savings. Ms Denise Phua suggested that the Government top up the nominee accounts of those from the lower income groups. She also spoke about not having a Minimum Sum cap on SNSS savings which allow for larger sums to be set aside under SNSS by parents or charities.

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Mr Zainudin has similarly asked if we could allow relatives to contribute to the accounts of the SNSS nominees. If I understand his concerns correctly, they are fundamentally about the ability of the SNSS to help accumulate and stretch savings. I think the current design of SNSS addresses this. One of the reasons why we decided to set up the SNSS within the CPF system was so that nominated monies could enjoy CPF interest rates. As I explained earlier, monies in nominee accounts will earn the same interest as the original account. So monies in the nominee MA, RA and SA will earn 4%. Extra interest of 1% on the first $60,000 is also extended to the combined balances held in the nominee accounts and the nominee's own CPF accounts and these are fairly attractive interest rates.

On the suggestion for the Government to top up SNSS accounts of the needy, certainly we recognise that setting aside sufficient funds to take care of a special needs child after the demise of his parents could be a challenge, and we can explore the idea of grants and top-ups in future but for now, again, let us implement the scheme and let it unfold.

This brings me to a point and some concerns expressed about not having a Minimum Sum cap on SNSS savings. In fact, there is no such cap. The cap on prevailing Minimum Sum applies only to the Retirement Account. Members may also have monies in their OA, SA and MA. There is no limit on the total balances in all accounts and, therefore, no limit on how much can be nominated under the SNSS. Furthermore, both parents can nominate the same child giving the child access to even greater savings. Taking into account interest at 4%, the current Minimum Sum of $131,000 would allow for SNSS payouts at $500 per month for about 52 years.

Ms Ellen Lee expressed her concern about the $250. What we have specified is that is the minimum amount but there is no maximum amount available. A lot would depend on how much the parents are able to accumulate in their CPF accounts.

So, the SNSS does have the capacity to take in sizeable savings but parents will need to plan ahead to build up their CPF balances. Parents, siblings and other relatives can indeed make use of the various top-up schemes to do so.

Mr Zainudin Nordin will be pleased to learn that there are already tax benefits for some of these top-ups. For instance, under the Minimum Sum Topping Up scheme, parents topping up their own accounts which can then be nominated under SNSS, can claim tax relief of up to $7,000 a year. Additionally, top-ups to the accounts of disabled siblings are eligible for tax relief of up to $7,000 a year as well. These top-ups must be in cash.

Ms Ellen Lee has expressed possible parents' concern about the sufficiency for their children in the long term. Mrs Lina Chiam has also expressed concern about low-income families. These are important and valid concerns. Should SNSS funds run out and there are financial difficulties because there is no one else to turn to, our social safety net will have to step in to provide assistance. In such cases, assistance can be sought from ComCare and the Community Development Councils. MCYS is also looking at this important area clearly as part of their road map with regards to the disability sector.

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I agree wholeheartedly with Ms Dennis Phua and Ms Ellen Lee that it is important to see how we can educate or how we can better disseminate relevant information to special needs families so that they can make better financial plans and, overall, to increase awareness of this. I believe that this is one area my colleagues in MCYS are already focusing on. The Centre for Enabled Living (CEL) currently provides workshops on financial education and estate planning for caregivers to educate them on the different financial security mechanisms for the disabled.

There has been a sense of the importance of the Government taking a much more holistic approach towards supporting individuals with special needs. I agree. Ms Ellen Lee expressed concerns and reservations that she has heard but I think Members will agree with me that Ms Dennis Phua has been the most ardent champion in this area and she has been working intimately with many families concerned and those feedback and concerns are being factored in, not only to this Bill but I think to the way MCYS is approaching the special needs sector as a whole. And we do agree that there is a need for a holistic approach. This Bill is just one part of a larger overall picture.

MCYS has begun work to prepare for the next cycle of the five-year Enabling Masterplan for 2012 to 2016 for the Disability Sector. This Masterplan will take a holistic approach, indeed as raised by Members, to review and support the needs of persons with disabilities and, as Ms Ellen Lee expressed, for their caregivers. We will certainly note that in terms of the need for counselling, in terms of the need for advice and support for caregivers.

Mr de Souza also highlighted the need for further mechanisms to help parents make long-term financial provisions for their special needs children. These are important and good points. The Government has played a key role in gradually building up the range of options available to parents, starting from the SNTC and now the SNSS. Indeed, they are complementary. They are different but between them they fill up a space that caters to the needs of parents of special needs children.

MOH also intends to study how MediShield can be extended to those with congenital conditions. We will continue to pay attention to the needs of special groups and to see what role the Government and the community can play.

Allow me to now briefly turn to the issue of allowing reversals of transfers from OA to the SA. Mr Zainudin Nordin asked why the restrictions were there to begin with. However, he also acknowledged that being too liberal in allowing transfers from the SA to the OA would be detrimental to the member's retirement adequacy.

We are not allowing SA monies to be transferrable to the OA. Rather, when members have voluntarily made transfers from their OA to the SA, our amendment will allow these transfers to be reversed but only on a case by case basis and only allowed in deserving instances, for example, when members are experiencing significant and unforeseen financial difficulties.

On the issue of crediting life payouts to OA account, as brought up by Mr Yaw Shin Leong, in fact, it is not meant to go to the OA account. This adjustment is put in place because we have encountered situations where the bank transfers to the bank accounts of the individuals did not happen because, for whatever reason, the bank accounts lapsed. So as a temporary measure, it is transferred to the OA account until we can re-activate that.

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In closing, with this amendment, I think we have reached an important and another milestone in building up our support infrastructure for parents with special needs children. SNSS will complement SNTC to provide a more complete suite of solutions for parents concerned about how they can provide for their special needs children after their demise. SNSS has all the key features, payouts that are streamed out, attractive interest rates and it is free. It will appeal to those who have little savings outside their CPF and those who do not find the customisation available under SNTC necessary for their circumstances. On the other hand, there would be others who require a more elaborate or case-managed service and they could turn to the SNTC for this. Parents who envisage the needs of their children evolving and who want some safeguards over how disbursement arrangements may necessarily need to adapt after their demise would find, perhaps, SNTC more appropriate for them.

To put it simply, one option is free and comes with essential features; the other model is a model with fees that allows for greater customisation. We have designed SNSS and SNTC such that between them, they provide for a fairly complete coverage of the various needs. They complement each other. In this way, parents have options and can pick the options or a combination of options that fits their needs and circumstances better.

Ms Denise Phua Lay Peng: Sir, I thank the Minister of State for his clarifications. I support his suggestion to let the SNSS run. Let it unfold and then review the scheme again. I just want to ask the Minister of State when he thinks the scheme will be reviewed again. How much time does he think will be needed before a review? This is my first question.

BG [NS] Tan Chuan-Jin: Mr Speaker, Sir, at least let us unfold the scheme. I think we will work closely with Ms Denise Phua and the parents concerned. And we will –

Ms Denise Phua Lay Peng: Maybe 18 months? Is that fair?

BG [NS] Tan Chuan-Jin: Let us allow the scheme to unfold, and we will talk about that subsequently –

Ms Denise Phua Lay Peng: The Manpower Minister just nodded his head. Did he say yes? [ Laughter ]. Maybe we will let it run for 18 months and then review it. I think we just want it to be effective, Sir. That was my first question.

Second, Sir, I also want to ask the Government to seriously resource the Centre for Enabled Living better so that they can perform their one-stop help agency and with sign-posting role much more effectively. I do think they need that support. And, third, I would like to ask the Government to speed up the MediShield reforms to include those with congenital illnesses, because medical expenses do potentially drain a family's financial resources. Besides, basic healthcare is one of the basic provisions that the State should provide.

BG [NS] Tan Chuan-Jin: Mr Speaker, Sir, I am not sure if I can speak on behalf of MCYS but I am sure they would look at the Member's suggestions, and her concerns about funding for CEL. On the other point about MediShield adjustments, I think that is something that MOH is looking at. We will take into consideration the concerns that the Member has expressed.

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Mr Speaker: Mr Ang Wei Neng, are you seeking a clarification?

Mr Ang Wei Neng (Jurong): Yes, Mr Speaker, Sir. I stand to support the Bill. I want to expand on the Member Denise Phua's point to urge MOM to review the eligibility criteria for SNSS because we said earlier in the House that about 2,500 children were diagnosed with special needs and developmental delay, out of which only 300 of them entered the SPED schools. This means that 2,200 – quite a number – will not be able to support themselves financially. This is not a small number. Thus, we urge MOM to consider expanding the eligibility criteria as soon as possible.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [ BG [NS] Tan Chuan-Jin ].

Bill considered in Committee; reported without amendment; read a Third time and passed.