CENTRAL PROVIDENT FUND (Use of savings for education/skills upgrading)

Dr Teo Ho Pin asked the Minister for Manpower whether his Ministry will consider allowing Singaporeans to use part of their Central Provident Fund savings (capped at $2,000 per year) for education or skills upgrading purposes.

The Minister of State for Manpower (Encik Othman bin Haron Eusofe) (for the Minister for Manpower): Sir, I would like to inform the House that the main objectives of CPF savings are for housing, medical and old age needs. CPF savings are also allowed to be used for selected purposes, including full-time studies in approved institutions of higher learning, which are the 2 local universities and 4 polytechnics. Sir, the CPF Education Scheme is a loan scheme and it is an exception made for full-time students because they have no income and are likely to have more difficulty paying for tuition fees with their own savings.

Sir, workers who need to upgrade their skills today have many opportunities to do so with the support from their employers, the Skills Development Fund (SDF) and the Skills Redevelopment Programme (SRP). Training and upgrading courses organised by employers for their workers are funded by SDF up to 80% of the course fees. Sir, for employers who send their workers to enhance their employability and to be certified under the SRP, they are also eligible to claim for subsidy up to 70% of their absentee payroll, apart from the 80% subsidy from the SDF on course fees. For individuals who take up training courses to upgrade themselves through their unions or the self-help groups, they could also enjoy the training grant of 80% from the SDF.

To encourage workers to undergo training and retraining, the Government has also given a tax relief of up to $2,000 of course fees for individuals pursuing courses on their own.

Sir, I am therefore of the view that it is not necessary to use individual's CPF savings for education and skills upgrading courses. CPF savings should be reserved to meet their housing, medical and old age needs.

Mr Low Thia Khiang (Hougang): Sir, while I understand that CPF savings are allowed to be used for tertiary education by university students, why is it not extended to polytechnic students?

Encik Othman bin Haron Eusofe: I have mentioned that it is also extended to the four polytechnics.