RENTAL FLATS (Waiver of debarment period for the elderly)

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RENTAL FLATS:

(Waiver of debarment period for the elderly): 11.

Dr Lily Neo asked the Minister for National Development whether the 2½-year debarment period to obtain rental flats can be waived for those elderly who have sold their Housing and Development

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Board flats and who are in financial and medical needs.

Mr Mah Bow Tan: Mr Speaker, Sir, HDB rental flats cater to low-income families who cannot afford home ownership flats. They are heavily subsidised and limited in number. Lessees who own HDB flats are discouraged from competing for such heavily subsidised rental housing with other low-income families who have more urgent housing needs. That is why they are debarred from renting HDB flats for 30 months after they sell their flats.

Nevertheless, again, for those in genuine hardship, HDB will consider waiving the 30-month debarment period on a case-by-case basis.

Dr Lily Neo (Jalan Besar): Mr Speaker, Sir, may I ask the Minister whether I am correct to say that many elderly Singaporeans may be asset rich but cash poor. Few meet the CPF Minimum Sum for retirement, many have fewer children and the State provides very limited public assistance for retirees. Therefore, is it not time now to give more consideration and assistance to the elderly to cope with life after retirement? How does the Minister address this issue?

Mr Mah Bow Tan: I think the Member has pointed out a very genuine need for post-retirement planning and to use the flat as a major feature in the post-retirement planning of the senior citizens. For this reason, the Ministry and HDB last year relaxed the criteria for allowing the whole flat to be sublet, and in this way, to allow the senior citizens a regular stream of income. What this means is that they can rent out their whole flat. They can then either move in with their children, move in with friends, or they can rent out a room, which is already currently allowed. So these are options which are available to them.

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The other thing that the senior citizens can do with a, say, 3 or 4-room flat is to sell the flat and to move into a studio apartment. Sufficient studio apartments are being made available for senior citizens. With the money that is left over, they can either buy an annuity or make other financial arrangements for their old age. So there are such post-retirement arrangements which are already in place. There are options available for them. The suggestion that the Member has made, which is to allow them to rent a subsidised flat, I think, is a different solution from what I have just enumerated. It is different in the sense that, in this case, what the Member is asking is for the Government to continue to subsidise the senior citizen another time, ie, through the rental flat. Here, I must explain that the overall subsidy policy of the Government is to make sure that each eligible Singaporean family is able to enjoy a certain amount of subsidy through the purchase of the first subsidised flat, through the purchase of the second subsidised flat after he pays the levy, and through subsidised loans. I think there is a limit that we must impose on the amount of subsidy that we give to each Singaporean. It cannot be limitless because it is not a bottomless pit as far as Government finance is concerned.

In this respect, we have to educate our senior citizens as to how they can encash, how they can monetise, and how they can make better use of their flats after retirement. Allowing them to rent a subsidised flat is not one of the options under the current regime for the reasons that I have stated, which is that we are actually giving yet another subsidy and there is a limit to the amount of subsidy. We have crafted the subsidy policy in such a way that they are only entitled to so much subsidies, please do not come back for more subsidies after that. That is the position at the moment.

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HOUSING AND DEVELOPMENT BOARD FLATS:

(Reverse mortgages): 12.

Dr Lily Neo asked the Minister for National Development (a) what is the status of his Ministry's policy on reverse mortgages of Housing and Development Board flats; and (b) will his Ministry promote and make it easier for banks to provide reverse-mortgages to retirees, especially to those with insufficient funds to meet their retirement needs.

Mr Mah Bow Tan: Mr Speaker, Sir, MND and HDB have explored reverse mortgages as a possible way to provide elderly HDB lessees with an additional source of income for their retirement needs.

However, the current reverse mortgage terms that are offered in the market are not attractive for HDB lessees. The monthly payments are relatively small because of the high financing cost. More importantly, as the reverse mortgages are fixed in tenure, elderly lessees run the risk of losing their homes should they outlive the term of the mortgage and are unable to redeem the loan with interest accrued.

Nevertheless, if there are banks or insurers who can offer reverse mortgages on favourable terms to HDB lessees, we will be happy to look into whether and how such schemes can be made available to HDB lessees.

Dr Lily Neo: Sir, may I ask the Minister on the reasons why banks are not keen to offer reverse mortgages for HDB flats? Will it be that they may not want to own HDB properties in the event of defaults, especially for shorter remaining tenure? Would HDB not be in a better position to offer such reverse mortgages and whether the Minister would facilitate and step up such facility to the elderly?

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Mr Mah Bow Tan: Whether banks offer reverse mortgages or not, I think it is really a decision for the banks to take. They have their own policies on how much risk they want to take. They have a certain position that they are taking, in terms of the interest rates, and so on and so forth. I know for a fact that an insurance company, NTUC Income, does offer reverse mortgages. But I am told that it is currently not very popular with HDB lessees. One of the reasons is that the terms under which it is offered are not very attractive. And again, this is something that the company has to decide whether it is able to offer better terms so as to attract more people to come. This is not a decision for HDB to take. In fact, HDB has since last year stopped the issuing of mortgage loans for certain categories of people. So it is really not HDB's role to offer mortgage financing, or in this case reverse mortgage financing, to its lessees. I think its job should be to provide public housing, to frame policy on public housing, to provide loans for first timers and to make sure that first timer families are adequately provided.

For the retirees, there are other provisions being made, including some of those that I mentioned earlier,eg, allowing lessees to sublet their flats totally. We can relax those conditions even further, if necessary. But that must be one of the options, that after you no longer need a big flat, you should have a means to downgrade to a smaller one, or to live with your children and make use of the money for your retirement needs. So, there are options available. It is best for the private sector to provide such financing. Yes, HDB will facilitate such schemes to the maximum extent possible. But it will not provide such schemes.

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HOUSING AND DEVELOPMENT BOARD FLATS:

(Relaxation of rules for purchase by single Singaporeans): Column: 48

13.

Mr Chiam See Tong asked the Minister for National Development whether the Housing and Development Board is willing to relax its rules and allow single Singaporeans who have attained the age of 30 years to purchase flats.

Mr Mah Bow Tan: Sir, our public housing policy is designed to be pro-family in orientation. Single citizens are considered as part of a family unit. They are encouraged to live with their parents for mutual care and support. At the same time, the Government recognises that there are some older Singaporeans who remain single and may prefer to live on their own. To meet the housing needs of this group, HDB has implemented two housing schemes, ie, the Single Singapore Citizen Scheme and the Joint Singles Scheme, for citizen singles who are 35 years old or above to buy resale HDB flats.

The minimum age requirement of 35 for singles to buy flats is to support our policy on promoting marriages. It remains relevant as statistics show that Singaporeans are marrying later and that marriage rates remain relatively high among those in the 30-34 age group. There is currently no intention to lower the minimum age. Younger singles below 35 can buy a HDB flat together with their parents. Those who wish to stay on their own have other housing options, such as renting a flat or room from the open market.

Mr Chiam See Tong: Sir, I have three supplementary questions. Firstly, does the Minister agree with me that, in fact, if singles stay on their own, there are better chances of getting married? Second, at 30 years old, are they not mature enough to live on their own? How long do they have to stay with their parents? Thirdly, the Minister reported just now that there were surplus flats. By allowing 30-year-olds to buy flats, do they not take up the slack and, in fact, cut down wastage?

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Mr Mah Bow Tan: Let me answer the Member's questions in reverse order. I will take the last one first.

As a clarification for Mr Chiam, singles are not allowed to buy new flats. They are only allowed to buy resale flats. The reason for that is very simple. New flats are only for those who can form a family unit. So, that is a very clear-cut policy. What the Member was asking was whether we are going to lower the 35 age limit to 30 for singles to buy resale flats. It is an entirely different matter. So, I think the third question is quite irrelevant. It does not matter whether we have 20,000 or 30,000 empty flats, because singles are not eligible to buy those flats.

The second question was whether I think at age 30 they are mature enough to live alone. Absolutely! There are people who are 18 and are quite mature and are able to live on their own, and there are people who are 50 who are still not mature and cannot live on their own. That has absolutely nothing to do with this policy because, if you want to live on your own and you are mature enough to do so, by all means do so. But, unfortunately, you cannot do so in a HDB flat. You can rent a flat, rent a room and you can do whatever you like, but we need to keep this 35-year-old age limit for HDB flats.

The first question is whether I agree that a single at 30 living in her own flat is more marriageable or more desirable. Maybe, maybe not. But, again, that has nothing to do with this policy because, as far as this is concerned, we are saying that at age 30, 31, 32, 33 or 34, they are still likely to get married, their chances of getting married are still good. Therefore, there is no need to change this policy.

Mr Steve Chia Kiah Hong: Sir, will the Ministry separate its role as provider of public housing from its social agenda of forcing Singaporeans to get married in

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order to buy a HDB flat? Does the Minister realise that this social policy of forcing young couples to get married in order to buy a HDB flat is one of the main causes of marital divorces in recent years? People are buying HDB flats for the wrong reason.

Mr Mah Bow Tan: I am not sure where Mr Chia gets his statistics from that this is the major cause of divorces. I would like to hear from the Minister for Community Development and Sports whether this is so.

But the Member asked whether we should be divorcing HDB's role as a service provider from it being a social service agency. The simple answer is that we are providing subsidised HDB flats, the subsidy is for a reason, and there are many social reasons why we formulate HDB policies. The singles policy is just one of them. The ethnic integration policy is another. The mixing of 3-room, 4-room and 5-room flats so that people from different socio-economic backgrounds live together so that there is greater social harmony and bonding is yet another. So, HDB policies have all along been designed to promote family values and achieve social objectives. It is not something that is new or it is not something that is only for the singles. So, wherever it is desirable, the Government will do so, and it will justify the subsidy, ie, the money that it is giving out from the taxpayers.

Mr Speaker: Mr Steve Chia, last question.

Mr Steve Chia Kiah Hong: Sir, resale flats in the market are not subsidised. So why are those who are below 35 years old not allowed to buy these resale flats?

Mr Mah Bow Tan: It is not true that they are not subsidised. There is a grant that is given for singles to buy these resale flats if they so wish.