MEDISAVE (Contribution by part-time self-employed people)

Dr Wang Kai Yuen asked the Minister for Health why is a person engaged in a second job of a self-employed nature on a part-time basis required to contribute to Medisave even though that person is already contributing to Medisave in respect of his regular full-time job.

The Minister for Health (BG George Yong-Boon Yeo): Mr Speaker, Sir, currently, a person who holds multiple employment is required to contribute to CPF from all sources of employment income. However, if his combined CPF contributions exceed the prescribed maximum, he may apply to have his CPF contributions capped at the maximum. His Medisave contributions will likewise be capped.

The same principle applies to a person who is concurrently an employee and a self-employed person. He is required to contribute to Medisave based on all sources of income. Similarly, if his combined Medisave contributions exceed the prescribed maximum, he may apply to cap his Medisave contributions to the maximum amount.

Dr Wang Kai Yuen (Bukit Timah): Sir, is the Minister aware that even if the Medisave account has reached its maximum, a person in this category is still required by the relevant Government authorities, like the Registry of Vehicles for taxi licence renewal, etc. to continue to contribute to his Medisave account?

BG George Yong-Boon Yeo: If he has already reached the limit of his Medisave contribution, he can apply for it to be capped.

Dr Wang Kai Yuen: But I understand that they are required to continue to contribute to their Medisave accounts. Any surplus would then be transferred from the Medisave accounts into their Ordinary accounts. What is the rationale of doing so?

BG George Yong-Boon Yeo: The same rationale applies as it would to CPF contributions. In other words, if your monthly income exceeds $6,000 then you do not have to contribute CPF beyond $6,000. In the same way, the Medisave contributions will be capped. There are some minor variations depending on the age group you fall in. But the same principle applies. Perhaps if the Member has got specific details to raise, he can send them to me and I will give him a specific reply.

Dr Wang Kai Yuen: I will do so.