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Written Answer by Mr Lim Swee Say on using CPF Special Account and Retirement Account savings for housing

Employment practices
Notice Paper No. 119 Of 2016 For The Sitting On 24 March 2016
Question No. 215 For Oral Answer

MP: Mr Zainal Sapari

To ask the Minister for Manpower whether HDB can reconsider allowing HDB home owners who do not have sufficient savings in their CPF ordinary account to utilise their CPF special or retirement accounts to manage their home mortgage arrears.

Answer
  1. CPF members can use their Ordinary Account (OA) savings for the downpayment, monthly instalments and mortgage arrears for their housing purchase. The Special Account (SA) savings are generally preserved for members’ retirement needs, and cannot be used for housing purposes. 
  2. When members turn 55, a Retirement Account, or RA, is created. Monies from the OA and the SA are transferred to the RA up to the Full Retirement Sum. The OA continues to exist even after the RA is created. Any remaining OA balance, as well as new contributions to the OA after the age of 55, can be used to meet housing needs. In addition, any RA savings in excess of the Basic Retirement Sum can also be used for housing purposes. 
  3. HDB proactively helps flat owners manage their arrears early. If their financial difficulty is temporary, HDB will consider reducing or deferring their instalments to help them resolve their arrears. For flat owners who can no longer afford to keep their flats, HDB will help them explore more options, including right-sizing to a more affordable flat. 
  4. For CPF members who do not have sufficient OA savings to meet their housing needs, we have exercised flexibility where cases merit it. For example, we have, upon appeal, allowed CPF members to use their RA savings that originated from their OA to pay for their housing, even if their RA savings are below their Basic Retirement Sum. 
  5. Overall, we need to strike a balance between allowing CPF members to use their SA and RA savings for housing needs and safeguarding such savings for their retirement needs, so as not to compromise their retirement adequacy.