Surviving on “more than” $400 a month from HDB lease paybacks
June 24th, 2009 | 
Author: From The Newsroom Team
It was reported in the Straits Times that 344 home owners had received a payout from the Housing Board’s new Lease Buyback Scheme (LBS). (read article here)
One of them, 68 year old retired taxi driver Chia Boon Chuan has received a $5,000 upfront payment and will be paid more than $400 a month for the rest of his life, in exchange for the tail-end of the 99-year lease of his flat.
It was not known exactly how much Mr Chia will receive monthly, but it is unlikely to be more than $500.
Based on the present standard of living today, $400 is just sufficient to cover one’s living expenses, assuming that one is healthy and not crippled by hefty healthcare costs.
If Mr Chia were to live for another 15 years, the monthly sum of $400 may not be enough for him in the future if one takes inflation into account.
Given that he has no children to support him and with meagre savings to begin with, he faces an uncertain, if not gloomy future.
Even if one has children, there is little guarantee that they are able to support their parents financially for the rest of their lives unless they earn a decent salary to begin with.
The lower income group, which has seen their salaries stagnate for the last decade or so due to increased competition from cheaper foreign labor, will be hardest hit.
The middle class is being squeezed too with many young families having to juggle their limited finances between supporting their children and aged parents.
In the meantime, unskilled and semi-skilled foreigners continue to flood the labor market, depressing the wages of the average Singapore worker.
With practically no social support from the state to speak of, Singaporeans have to depend on their CPF and personal savings for their retirement.
Since the CPF of most Singaporeans are locked up in mortage loans for their properties, there is hardly enough to be utilized as a retirement fund.
85% of Singaporeans live in public housing built by the government. At today’s market rates, almost all Singaporeans will have to rely on a loan to purchase one.
The price of new HDB flats have more than doubled in the last 10 years while that of resale flats have skyrocketed with those in prime areas comparable to the prices of private apartments.
As a substantial amount of the Singaporean worker’s salary is invested in the HDB flat which has the potential to earn the owner a reasonable profit upon resale, many flat owners are obsessed with the value of their flats.
The building of amentities such as MRT stations, shopping malls, sports facilities and upgrading of estates will invariably increase the value of the property.
Since it is the ruling party (via the government) which controls the purse-strings of HDB and URA, it has cleverly made used of estate upgrading as a trump card without fail at every general election.
With the ruling elite kept perpetually in power, Singaporeans have no say at all in how their CPF is being managed or the prices of public housing.
They have little choice except to slog hard throughout their lives to save up for their twilight years.
Posted in Opinion
25 Responses to “Surviving on “more than” $400 a month from HDB lease paybacks”
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Well, you are all meant to be cows and will be milked until you can’t be milked no more and then send to the butcher. And the barn you’re currently staying in are not yours anyway to begin with. It all belonged to Mr. LKY and his family the farmer.
My minimalist feminine instinct in me tells me that wp.com is not the wp.com it used to be. Who else feels it?
your tag line is misleading.
the scheme by HDB is just another financial instrument which provide cash out for the elderly.
if you can not find any fault on the scheme, do not using the tagline which is misleading.
how much is the house value and what is the basic point on financial calculation by HDB should give us a better insight on the scheme.
Do not spin news, do a in depth study before put up an article
singapore is rich but its people are poor and you know the reason why.
@ AlexTheGreat,
Pretty much, the articles and response given have changed since the past few weeks. Perhaps they’re busy with something.
AlexTheGreat on Wed, 24th Jun 2009 10:25 pm
My minimalist feminine instinct in me tells me that wp.com is not the wp.com it used to be. Who else feels it?
Yeah, WP now feels more like TOC. It appears to tone down abit. Hostile takeover? Or some of it’s members mysteriously disappeared like PoThePanda.
There is so much undiscussed topics such as
- H1N1 virus
Surge in cases after downgrading our threat level from Orange to Yellow. Your idea, Mr Khaw?
- Iran
Iran students protest at Speaker’s Corner
-North Korea
Reports of smuggling via S’pore?
You are missing the juice.
hi there
1. no one really knows whether the scheme is successful or not.
2. it is just too early to tell, untested too.
3. honest, those “sellers” should not only rely on the monthly “buyback” payment as the main source of income to survive.
4. it should be wise to take it as “extras”. some pocket money is better nothing for some old folks.
5. it shall be foolish to live by that alone.
The problem of the poor having little to survive on is not an issue particular to Singapore. As someone has pointed out, the sale and leaseback is, but a channel for them to monetise their main asset without having to sell it off. If you wanna compare with another country in the same league, let’s take a look at HK. Same thing – higher retirement age, lower income group has little to retire on, and worse yet, they face even more competing cheap labour.
Side note: I do feel too that your header is misleading. The folks are not “surviving” on $400. The amount is extra cash to their income. Please explore your topic in all directions. Cheers.
To say Singaporeans are poor can be misleading, many do their financial planing well, so no need to such handouts.
Some just do not have the opportunity in life, slog for a few decade and all they have is a HDB pigeon hole, so this is some cash back for them before they kick the bucket.
There are many cases, older folks with CPF withdrawn, spend it all in Geylang meimei and gambling, for this group, you only have yourself to blame, we are not passing judgment, it’s a choice they made, to have fun first then sleep at the void deck for the rest of their lives.
HK to introduce minimum wage
http://business.asiaone.com/Business/News/Office/Story/A1Story20090625-150742.html
“The amount is extra cash to their income.”
If they still have a job, Ok. In the case of the RETIRED taxi driver, don’t think so
@Randomnessinmind & Brendan
Yeah, I hope it’s some good stuff slowing broiling in the claypot.. or else.. *shakes head*….
The poor are a minority in Singapore. Otherwise the PAP won’t be in power for so long, the opposition won’t be so weak for so long and the country so peaceful for so long.
More Good Years. For the majority, that is.
“If they still have a job, Ok. In the case of the RETIRED taxi driver, don’t think so”
Just assuming this scenario: what do you expect govt to do if RETIRED taxi driver spent all his CPF and savings on prostitutes/gambling and now have to rely on the patry amount of $400 (which you deemded grossly inadequate) to live on every month? Do you want govt to give him more grants and handouts where he will probably use it to buy 4D and Toto instead of upkeeping himself?
I believed that are many genuine people requiring help out there like the old cantonese couple interviewed on Channel 8 recently telecasted “special report. The govt should not just come out with general policy that passes handouts to all including the irresponsibles.
What they should do more (which I agreed they are not doing a great job now) is to identify the genuine people that really needed help from society and focus all the resources available to them. I would not mind paying higher income tax if a large part of my taxes paid goes to helping this group of people instead of paying high salaries to civil servants and politicians which are not doing a good job anyway.
Also, while critizing the govt for not doing much, we ourselves had to ask what we had done on our part? Have we been giving generously to charities that genuinely reach out to the needy?
Sometimes it is easy to say that we are from the lower income group vis a viz the rich and powerful and as such we do not have much left to give. Giving to charities should be proportionate to what we earn. If you are not that well off, we should at least give what we could afford be it $0.50, $1, $10 or more. If we ourselves are not the generous type, we should not critize others includig the govt for not being so.
Even if say Singapore govt were to intro a min wage law of say $X, some cynical ones out there will be saying “How possible is it to survive on $X”?
And I go agree with gooner, we ourselves need to ask what we have done on our part.
hey past week you all quite quiet eh..
What is the construction cost for a new HDB flat? What is its selling price now? What is the profit for HDB or rather PAP Govt if 85% of population here staying in public housing? Nobody knows except MND.
How can a “subsidised” new HDB flat cost $400-500k at prime areas just bcos it has good location and comes with “condo fixtures or fittings” eventhough CPF OA can pay off the pte bank loan?
And why pte bank loan not HDB loan?
Housing is a basic need, it is a must have, not good to have, a roof over the head is definitely more needed than a car.
“Affordable” public housing is just one of the PAP Govt’s duties in taking care of the people. Upgrading of old HDB flats is also another PAP Govt’s duty, somemore it does not come free, the residents have to pay for upgrading, so why the two opposition wards have not been upgrading yet?
The CPF system will not support one through his twilight years to the grave.
Temasek lost almost S$60Billion. Imagine if they some of theis money were to be apportion to help the really poor and the ones society had left behind, Temasek would have lost less if they had less to invest.
And we are not even considering the GIC’s losses yet?
When bothe Temasek and GIC made some money, did the common citizens benefit? But those running these Singaporean owned outfit are paid millions [playing with the taxpayers money.
hdb shouldnt take all the responsibility for this scam. the owner of the flat is no bright spark either.
if you want to talk about monetising his “asset”, simple. rent out the entire 2 room flat and use the income to share a room with others in another flat. even after paying his share of the rent, he will have more than what hdb is giving him.
most importantly, the flat remains in his name to be passed on to his children if he has any (which he doesnt, and if it hasnt already been repossessed using some other method).
to those who say, what about his lifestyle? you cant have your cake and eat it too. when faced with changing conditions, most people will be unwilling to adapt. he has chosen to let them earn his money twice – once when he bought it and once when he sells it; so be it.
oh, and i forgot, if he keeps the flat he maintains exposure to the housing market. it will appreciate (hopefully) in line with inflation.
since he’s gonna lose it anyway under lease buyback, sell it at an appropriate time (20 years?) into the 30 year period after renting it out, and live out the rest of his life with the proceeds.
so many better ways if only he could think.
Yours was the first posted comments. And …
Just a little correction or diiferent angle of fact in George Orwell’s book on “Animal Farm” in relation to the FamiLEE. The Farmer AND his family WAS Kicked OUT by the animals lead by The Pigs! I won’t want to drag LKY and PAP down THAT low as from the aspect of material wealth growth in Singapore. BUT from the angle of human right abuses of Opposition Parties and their Candidates to the still potent ARCHAIC treatments of ANYONE even invidual commoners like most of US, they leave little to be desired!
That said, if we agree that they ARE The Farmer & Family, then the Pigs’ Lead Political Leaders of “Animal Farm” fame are yet to come! But then this Sent Shivers sown my spine! Yet, you may be right from your angle as The FamiLee has been repeatedly said to be domineering from comments in WP and elsewhere! So, before the Leadership Pigs said and DID too make “All 4-Legs are equal but some 4-Legs are MORE EQUAL Than Other 4-Legs Thing”, The FamiLEE isn’t yet similar to THAT of this same Cut! If they have, then they are now more like the Pig Leaders of “Animal Farm”? Or what else you may be making heads and tails of this thing.
Just sharing my 1/2 cent worth of analysis by comparing and contrasting the colours and shade of realities!
to survive on just $400 a month???!!!??
Already very costly living. Future how? Less costly? Or more costly more the likely?
$400 model can last for how long?
who is confident that this plan can work?
I am asking. I not sure lah.
is it legal to buy and wear the ’shutup’ t-shirt?
very cool de.
So let me start the ball rolling again. Did you know that …
1st. HDB as Gahment said “Subsidised” HDB flats.
2nd. The Hdb said “Highly-subsidised” HDB flats.
3rd. And the latest too HDB had been saying for some years now “HEAVILY-SUBSIDISED” FLATS!
Is it fair then guys, to assume at least a 50% subsidy FOR 50% if NOT more? Actually, common Sense prevailing, shouldn’t “HEAVILY” means more than 50%? As then DPM Ong Teng Cheong in about 1980-81 said of HDB’s then new generation of “SIMPLE 4-Room” Flats as built for $59,000 then. And sold for ONLY $30,500 then in 1980-81. Which is the same PRICE as some HDB 5-Room in 24 Storey Point Blocks! Wasn’t those “Simple 4-Rm” flats already about 50% SUBSIDISED???
Now, HDB ONLY said then 1980-81, that it’s flats were ONLY as “Subsidised”!!! So, shouldn’t “Highly” mean more than 50% or like say 60% for 2nd Category of Subsidy? Now, when they claimed “HEAVILY”, I wouldn’t say it means say 70%. THE BIGGY QUESTION WAS AND IS STILL THE SAME TODAY AND TOMORROW, “WHERE DOES THAT SUBSIDY MONEIES COME FROM WHEN SOME 70-75% OF POPULATION WERE ALREADY IN HDB FLATS??? No Answers for these things so far TOO has there been to date???
Last QUESTION in closing: Has our Gahment’s HDB Public Housing Scheme been MAKING money from us by building with OUR CPF monies TOO??? Subsidy was it, is it and continue to will it???
NO fruitful and MEANINGFUL answers nor clarifications were ever given to press readers’ letters and Oppo’s queries TOO!!! All simply relegated in some way as you already know how! Even a reader’s smart pointing out that HDB’s “SUBSIDIES” are actually based on “Market Valuation in OPPORTUNITY Cost”!!! This make sense to anyone?