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Highlights from the 2023 National Day Rally – The Majulah Package

Graphic illustration showcasing the three key elements of the Majulah Package for older Singaporeans.

Last Updated on by Tree of Wealth

In his address at the National Day Rally on August 20, 2023, Prime Minister Lee Hsien Loong unveiled the Majulah Package, this is aimed at enhancing the financial security and well-being of older Singaporeans. This package, with its nuanced components and targeted benefits, promises to be a game-changer in the realm of retirement and healthcare savings. Dive into the details below to understand the full scope and implications of this pivotal move.

The Majulah Package is a $7 billion initiative intended to assist 1.4 million Singaporean citizens who are 50 years and older this year. Specifically, those born before or on December 31, 1973. This package primarily targets individuals with lower incomes and less accumulated wealth and is a cornerstone of broader efforts to bolster retirement preparedness.

Breaking down the Majulah Package, we find three key elements:

  1. Earn and Save Bonus: Designed for lower to middle-income professionals, this annual bonus aims to augment their CPF savings throughout their working years.
  2. Retirement Savings Bonus: A special, one-time addition to the retirement savings of those who haven’t yet reached the Basic Retirement Sum. This also caters to those who might be unable to engage in regular employment.
  3. MediSave Bonus: This represents a singular bonus geared towards enhancing healthcare savings for qualifying Singaporean citizens.

To ensure that the Majulah Package truly benefits those in greatest need, there’s a means-tested approach in place. Eligibility is determined by several criteria, including but not limited to, an individual’s income, the Annual Value of their residence, ownership of multiple properties, and existing CPF savings.

A concise overview of the Majulah Package’s components and their respective bonuses to be credited into CPF accounts of eligible beneficiaries is as follows:

  • Earn and Save Bonus: An annual amount ranging from $400 to $1,000. This will be credited to either the CPF Retirement Account or the Special Account, contingent on the beneficiary’s age.
  • Retirement Savings Bonus: A one-time bonus between $1,000 and $1,500, directed to the CPF Retirement Account or Special Account, again based on age.
  • MediSave Bonus: A singular bonus varying from $500 to $1,000, which will be deposited into the CPF MediSave Account.

For a deeper dive into the intricacies of the Majulah Package, stay tuned for more comprehensive announcements slated for 2024.

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Frequently Asked Questions (FAQs) on the Majulah Package

Who qualifies for the Majulah Package?

The Majulah Package is primarily tailored for Singaporean seniors to enhance their retirement and healthcare provisions. Specifically, it targets Singapore citizens born on or before 31 December 1973, particularly those in the lower income bracket with limited wealth. Further specifics regarding eligibility will be detailed in 2024.

Is there a stipulated year by which I should have gained Singaporean citizenship to be eligible for the Majulah Package?

Unlike the Pioneer and Merdeka Generation Packages, which had a citizenship attainment criterion owing to their intent to recognize seniors instrumental in Singapore’s formative years, the Majulah Package does not have such a requirement. Its main focus is to assist those with lower incomes and less wealth. Hence, as long as you’re a Singaporean citizen and meet the set criteria at the assessment time, you’re eligible. No citizenship attainment year is imposed for this package.

How do caregivers stand to benefit from the Majulah Package?

Working caregivers who meet the eligibility criteria can avail of the Earn and Save Bonus. Even those caregivers who aren’t working can still be eligible for both the Retirement Savings Bonus and the MediSave Bonus, provided they fit the defined criteria.

Are Self-Employed Persons and Platform Workers eligible for the Earn and Save Bonus (ESB)?

Absolutely. The Earn and Save Bonus is designed to support lower to middle-income workers, irrespective of their employment status or nature. Comprehensive details about income thresholds and other qualifying factors will be disclosed in 2024.

What does the government intend by targeting the Majulah Package towards those with “lower income and less wealth”?

The Majulah Package operates on a means-tested basis, meaning it’s crafted to cater primarily to those who genuinely require the assistance. Eligibility for various components of the package will be influenced by several factors such as an individual’s income, the annual value of their residence, property ownership specifics, and the amount they have in CPF savings. A more detailed breakdown will be shared in 2024.

Can you provide an overview of the Majulah Package’s value and its intended beneficiaries?

The Majulah Package, pegged at $7 billion, is poised to assist approximately 1.4 million Singaporean citizens who are 50 or older in 2023. This represents over 80% of Singaporeans in this age bracket for the said year. To illustrate, a 55-year-old worker from the lower-income segment with limited wealth might accumulate an additional $12,000 in CPF savings (inclusive of interest) through the annual Earn and Save Bonuses if they continue to work until they’re 65. On top of this, if they haven’t met the CPF Basic Retirement Sum, they can get a one-time Retirement Savings Bonus of up to $1,500 and a MediSave Bonus of up to $1,000.

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How much can one potentially receive from the Majulah Package?

The breakdown is as follows:

  • Earn and Save Bonus: Between $400 and $1,000 annually. This gets credited to either the CPF Retirement Account or the Special Account, contingent on the age of the beneficiary.
  • Retirement Savings Bonus: A one-time bonus ranging from $1,000 to $1,500. This is directed into the CPF Retirement Account or Special Account, based on age.
  • MediSave Bonus: A singular amount between $500 and $1,000, which is deposited into the CPF MediSave Account.

What’s the reason behind depositing Majulah Package benefits into CPF accounts instead of distributing them as cash?

The Majulah Package is designed to assist senior Singaporeans in addressing their retirement and healthcare expenses. By directing the benefits to CPF accounts, it not only augments their savings for retirement and healthcare but also allows these funds to accumulate interest. Subsequently, these funds can be allocated as monthly retirement payouts or can directly cater to healthcare costs.

Regarding the distribution of Majulah Package benefits, further information is scheduled to be released in 2024. Similarly, those keen on the enhanced features of the Workfare Income Supplement, Silver Support, and Matched Retirement Savings Scheme should stay tuned for more specifics, also set to be unveiled in 2024.

The overarching principle is to prioritize those with limited income and assets. Stay tuned for a more thorough unveiling of the eligibility specifications in 2024.

All in All..

The Majulah Package, launched by Prime Minister Lee Hsien Loong, signifies a remarkable stride towards enhancing the financial stability and welfare of Singapore’s senior citizens. A testament to Singapore’s enduring commitment to its people, the package is designed with meticulous thought and a keen understanding of the challenges faced by seniors. In a world of ever-changing dynamics, it’s heartening to see such definitive steps taken to ensure a more secure and comfortable future for Singaporeans. Indeed, brighter days lie ahead for our seniors with the advent of the Majulah Package.

Navigating the nuances of the Majulah Package can be daunting, and understanding how best to utilize its benefits for your unique financial situation is essential. Don’t leave your future to chance. Contact our expert financial advisor today for tailored financial planning. Let’s embark on a journey to ensure you’re well-prepared to reap the fullest benefits of what the Majulah Package has to offer.

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