USE OF CPF ACCOUNTS FOR TERTIARY EDUCATION

USE OF CPF ACCOUNTS FOR TERTIARY EDUCATION: 5.

Dr Lim Wee Kiak asked the Minister for Manpower (a) how much money was withdrawn from CPF accounts for tertiary education in the last five years; and (b) will his Ministry allow Singapore citizens who aspire to upgrade themselves during their mid-career to use their CPF to pay for their course fees.

The Minister for Manpower (Dr Ng Eng Hen): The CPF Education Scheme, introduced in 1989, already allows members to withdraw money from their CPF Ordinary Account to upgrade themselves or support their children through full-time local tertiary education. The Member asked how much monies have been withdrawn. Under the scheme, the money withdrawn has to be repaid with interest, upon the conclusion of the course. Over

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the last five years, 69,000 applications amounting to $490 million has been withdrawn - 95% for their children, and the remaining 5% for themselves or other family members.

Dr Lim Wee Kiak (Sembawang): Sir, will the Ministry allow Singaporeans who aspire to upgrade themselves during mid-career to use their CPF for payment of their course fees, especially for diploma holders who want to pursue a degree?

Dr Ng Eng Hen: Sir, I have already replied that the current scheme allows them to do that.

Mr Low Thia Khiang (Hougang): Sir, what I understand is that university fees are allowed to be deducted from CPF but polytechnic fees are not allowed. Are they both not tertiary?

Dr Ng Eng Hen: Sir, the Member is not correct. Nonetheless, there are some stipulations in terms of what the institutions are and whether they do part-time or full-time.

The issue is this. It is a limited pot. Yesterday, in this House, Members asked whether there was enough, how many members and their Minimum Sum, can they use it for Medisave, but it is still a limited pot. So we need to go back to the origin and the purpose for the CPF, ie, really for their retirement savings first, for their medical and housing. If we extend the use to other issues, I think we will deplete the pot.

From the point of view of Singaporeans wanting to upgrade and access to funding, there are a number of avenues that they can go to without having to touch their own CPF. I would be loath to open it up more to liberalise it and, in the process, deplete their funding. I take the point that it is an investment on the part of members and, even though it may be worthwhile, I would prefer for

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funding to be opened up in other avenues. And indeed we have. For example, under the WDA programme, we give funding for mid-career professionals who want to change their careers, eg, to become nurses or teaching assistants or in IT and finance. We want to expand these courses. Obviously, these courses are not cheap. For example, a particular conversion course to be nurses costs about $20,000 a year, but it is money well spent. If it enables someone to change his/her career and extend his/her employability, it is worth it.

Sir, I think this is the route that is preferred, rather than liberalising the CPF scheme, which should be primarily targeted at retirement, medical and housing expenses.