DEPENDANTS' PROTECTION SCHEME

DEPENDANTS' PROTECTION SCHEME: 4.

Er Lee Bee Wah asked the Minister for Manpower (a) what is the purpose of the Dependants' Protection Scheme; and (b) in view of the extension in retirement

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age for workers, whether the Ministry will consider revising the qualifying age for the Scheme to beyond 60 years.

Mr Gan Kim Yong (for the Minister for Manpower): Sir, the Dependants' Protection Scheme (DPS) is a low cost term insurance scheme to help young dependants with a sum of money to tide over the initial difficult period in the event of a member's permanent incapacity or death. The age limit of 60 was set to ensure low premiums and as beyond age 60, most members' children would be working and no longer dependent on their parents.

To raise the age limit beyond 60 would also increase premiums substantially. To obtain the same insurance coverage of $46,000 after age 60, members would have to pay between $800 and $900 each year, ie, several times higher than the current premium of $260 for the 55-59 age group. For these reasons, we will not extend DPS beyond age 60.

Er Lee Bee Wah (Ang Mo Kio): Sir, the reason why I asked this is that during my house visits, quite a number of residents brought up this issue. I hope MOM will look into this.

Mr Gan Kim Yong: Sir, as I have explained, MOM is mindful of some members who are interested in covering for their dependants beyond age 60, but the cost of covering them is very expensive, and it will undermine the member's own savings for retirement. So I think it is important for us to strike a balance between the two. There are also private schemes that are available for members who are interested in purchasing insurance schemes on their own to cover their dependants.

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Mdm Ho Geok Choo: Sir, in view of the fact that Singaporeans are getting married at a later age and therefore having children much later in life, and the fact that we are also persuading Singaporeans to work longer, is there a possibility for MOM to be persuaded to review this matter?

Mr Gan Kim Yong: Sir, **** as members continue to work longer, they would have greater security. But it is important for us to also bear in mind that members have to ensure that they have sufficient savings for their retirement, because this insurance is quite costly. And to allow members to tap on their CPF savings to purchase this insurance will undermine the long-term security for their retirement. So it is something that MOM will continue to review but it is not something that we will consider at this moment.