Married couple in S'pore agree to divorce to buy another HDB flat to rent out

A divorce of convenience.

Belmont Lay | May 15, 2018, 12:04 AM

Talk about how rules are meant to be broken.

Here's a story that would make you either laugh or cry.

But regardless, you'd appreciate its ingenuity if it can really be pulled off.

Husband and wife agree to a divorce of convenience

A husband and wife in Singapore had apparently agreed to divorce -- just so that they can each own a HDB flat.

This was after they figured marriage is just a status, and by divorcing, they can unlock their Central Provident Fund monies in a different way.

Wife bought another flat under singles scheme

The couple originally bought a HDB flat together when they got married. It was paid for using the husband's CPF.

The husband is now a cab driver. He is likely to be 54 this year, or somewhere in his mid-fifties.

He claims he cannot withdraw his CPF money by next year because it does not meet the Minimum Sum, or Retirement Sum, which is the minimum amount of money needed in your CPF account when you turn 55 before withdrawals can be made.

The wife too will not be able to withdraw any CPF money in a few years' time, since she also does not meet the minimum sum.

The plan

Husband and wife then divorced. On paper.

But they are obviously still very much together.

This frees up the wife to buy a HDB flat of her own as a single under the Single Singapore Citizen (SSC) scheme.

She is able to get a housing grant for the flat as a second-timer single Singapore citizen applicant.

She can pay for it with her CPF -- which otherwise would be locked in once she turns 55.

The man now owns the first flat as a single.

Rental income

Since he has lived in the house for longer than the five-year Minimum Occupation Period, he is able to rent it out.

The husband then proceeds to live with his now ex-wife in the new flat, while both enjoy the passive income from the rental of the first matrimonial flat -- said to be about $2,500 monthly.


These are some of the reactions to the story:

If this story were real, not sure whether to laugh or cry.

Bumped into an ex-colleague (who is the same age as me) earlier and had an interesting brief catch up chat over coffee.

He and his wife are now divorced. But except that there is nothing wrong with their marriage and they are still living together. The sole purpose of getting the divorce is to be able to buy ANOTHER HDB FLAT (under the singles scheme). So they collectively own two HDB flats as two single individuals.

You see, he was a manager that had recently been displaced by cheaper foreign labour. As all of us know, at our age, there is a real challenge in getting a job that would pay him a decent salary. Yes, there are lots of employers that wants to hire him. He is, afterall, a qualified professional with a wealth of 30 years' experience behind him. However, these greedy employers are just not willing to pay him his worth and wants to exploit his skills and experience for a mean salary. He refused to prostitute his skills for a low salary. He end up driving a cab that (ironically) pays him more than any of the offers that he had received.

He won't be getting any of his CPF money next year because he won't be able to meet his minimum sum. All his past CPF contributions (more than $800K) had already gone into his 5rm HDB flat that they are staying in now.

His wife has some CPF left but she (too) won't be able to get a single cent out in a few years' time because she (too) won't be able to meet the minimum sum as well.

So they planned, got a divorce and bought a second HDB flat just before they could lock away her CPF as the minimum sum in her CPF.

They then moved into the new flat and rented their older flat out legally because he had already and duly met the "Minimum Occupation Period" required for the legal renting out for that flat. And this rental income will serve an additional passive retirement income.

When I asked if he would be flouting any HDB regulations by doing that, he replied,

1) They are legally divorced and they are both legally SINGLE now.

2) He can retain the existing 5rm flat under the singles scheme and his wife is eligible to buy another flat under the singles scheme.

3) There is no law in this land that prohibit two single persons (divorced or not) from living together as a couple regardless if they were previously married or not.

4) At his age, being legally married is just a marital status. It doesn't stop them living together as man and wife. They both had made their wills.

5) Instead of having the money stuck as a minimum sum in their CPF, they might as well utilise whatever that they can get out of their CPF so as to get an alternative passive income since:-

- - a) they won't be able to get any of their CPF money anyway

- - b) even when they do get their CPF monthly payouts after the age of 65 yrs old (which is still a long way to go), the amounts will be so miserable that they would hardly be able to do anything decent with it anyway...

- - c) so.... they might as well get a second HDB flat with whatever money that they can siphoned out from their CPF (before the money is being locked away instead under the minimum sum).... rent it out and (at least), the monthly rental income of $2,500 can help them live a more dignified retirement IMMEDIATELY (right away) rather than waiting till they reach 65 yrs old for that miserable delayed CPF payout that is so insignificant....

Thinking aloud now.... could this be the new norm of retirement in Singapore that Singaporeans will be planning for? Wouldn't it be so sad that we have to come to this, in order that we can respond to how our hard-earned CPF money is being wilfully and forcefully withheld from us...