The Central Provident Fund (CPF) Board has announced several updates set to take effect in 2025. These changes are designed to improve the CPF system, helping members secure their savings for housing, retirement, and healthcare.
Key CPF Updates Effective January 2025
1. Closure of Special Account (SA) for Citizens Aged 55 and Above
- From mid-January 2025, CPF members aged 55 and above will no longer have a Special Account (SA).
- Funds in the SA will be redirected to either the Ordinary Account (OA) or Retirement Account (RA) based on their Full Retirement Sum.
- Existing investments done under the CPF Investment Scheme (CPFIS) can still be retained, but proceeds from these investments will be allocated to the RA once the SA is closed.
2. Increase in Enhanced Retirement Sum (ERS)
- Beginning January 1, 2025, the ERS will be raised from Bthe asic Retirement Sum (BRS) to four times.
- The ERS cap will increase from S$308,700 to S$426,000, allowing members to save more for higher monthly payouts during retirement.
3. Expanded Matched Retirement Savings Scheme (MRSS)
- The annual matching grant cap will be raised from S$600 to S$2,000.
- The age cap of 70 will be removed, making around 800,000 CPF members aged 55 and above eligible.
- Tax relief will no longer apply to cash top-ups that receive the matching grant, as the grant itself serves as a financial benefit.
4. Increased Silver Support Scheme Payouts
- Starting January 1, 2025, quarterly payouts that fall under the Silver Support Scheme will boost up by 20%.
- The qualifying household income threshold per person will rise from S$1,800 to S$2,300.
- Payouts will remain tiered according to HDB flat type and household income.
5. Changes to (WIS) Workfare Income Supplement Scheme
- The income cap for WIS eligibility will rise from S$2,500 to S$3,000 per month.
- Eligible workers can receive up to S$4,900 in annual Workfare payments, compared to S$4,200 previously.
6. CPF Contributions Focused Towards Platform Workers
- From January 1, 2025, CPF contributions will be reduced from platform workers’ earnings at the point of payment.
- Workers born on or after January 1, 1995, will see gradual increases in CPF contributions, reaching 20% by 2029.
- Platform operators will contribute up to 17%.
- Workers born before 1995 can opt in for full CPF contributions or continue contributing only to their MediSave Account.
7. Higher Monthly CPF Salary Ceiling
- Effective January 1, 2025, the CPF monthly salary ceiling will rise to S$7,400.
- The annual salary ceiling will remain at S$102,000.
- This adjustment aims to enhance CPF savings by increasing employer and employee contributions.
8. Increased Contribution of CPF Rates for Senior Workers
- CPF contribution rates for members aged above 55 to 65 will see the following changes:
- Employer contributions will rise by 0.5 percentage points.
- Employee contributions will rise by 1 percentage point.
- Employers will get a 1-year Transition CPF Offset to help manage cost adjustments, covering half of the increase in employer CPF contributions for 2025.
Final Thoughts
These upcoming changes reflect the government’s ongoing efforts to strengthen CPF savings and financial security for Singaporeans. By increasing savings thresholds and support schemes, CPF members can better prepare for future financial needs. Stay informed and take steps to make the most of these updates.
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