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Oral Answer by Mr Tan Chuan-Jin, Acting Minister for Manpower, to Parliamentary Question on Extending HPS to Cover Pre-existing Illness

Notice Paper No. 370 of 2013 For The Sitting On 21 Oct 2013
Question No. 1490 For Oral Answer

MP: Er Dr Lee Bee Wah

To ask the Minister for Manpower (a) whether the Ministry will consider extending the mortgage insurance cover under the Home Protection Scheme (HPS) to HDB flat owners with pre-existing illnesses; (b) how many HPS applications have been rejected in the past three years; and (c) how many claims have been made under HPS during this period.

Answer:

  1. The Home Protection Scheme (HPS) is a mortgage-reducing insurance which provides protection to CPF members and their families against the risk of losing their HDB flats, in the event of the CPF member’s premature death or permanent incapacitation. From 2011 to July 2013, about 2,700 HPS claims with a total value of $221 million have been paid out to insured members to help them pay off their outstanding housing loans. This is an important scheme and is put in place to look after Singaporeans.
  2. However, HPS is not offered to CPF members with serious pre-existing medical conditions. About 1.3% of all HPS applications since 2011 were rejected due to serious pre-existing medical conditions.
  3. Extending HPS coverage to all CPF members with pre-existing medical conditions would have implications on the affordability of premiums for members and the viability of the HPS, and there are significant moral hazard issues that need to be addressed. These issues and concerns are not unique. These are the same issues and concerns that are applied to insurance programmes and schemes.
  4. These issues need to be carefully studied. Nevertheless, we understand the concerns that CPF members with serious pre-existing illnesses and their families may have over the repayment of the outstanding loans for their HDB flats in the event of death or permanent incapacitation of the member. Various assistance measures are available to help those members. CPF Board will work closely with the Ministry of National Development to study other options to help them.