The Central Provident Fund (CPF) Board receives around 200 appeals annually over the last five years to waive the CPF refunds whenever CPF members transfer ownership of a Housing & Development Board (HDB) flat.
This was revealed by Manpower Minister Josephine Teo in a written Parliamentary reply on Monday (Jan. 6).
Member of Parliament Intan Azura Mokhtar asked about the appeals made each year by Singaporean adult children who withdraw their names from the flat co-owned with their parents.
Intan also asked if the CPF Board will consider reviewing the policy to allow flexibility for Singaporean adult children to exercise options that allow the waiver of a full lump sum repayment by their parents.
CPF savings must be refunded to CPF account when flat ownership changes
Teo explained that CPF savings that are used to pay for a flat must be refunded to the CPF account when the flat is sold off.
This includes the interest that would have accrued had the money not been taken out of the CPF account.
"This applies when a CPF member who co-owns a flat with his parent withdraws his name from the flat, as the transaction is akin to a sale," Teo wrote.
The refund can be made using the parents’ CPF savings, or by taking up a HDB or bank loan if eligible. This ensures members have enough money to retire.
CPF refund to be made within six months after possession of new flat
For CPF members who want to transfer ownership of a flat, for example to purchase their own matrimonial HDB flat, they can make the required CPF refund six months after they take possession of their new flat.
This transition period could stretch to a few years if the member is buying a Build-To-Order flat, according to Teo.
For members who are unable to make the CPF refund in time, CPF Board and HDB will work with them to explore their options, depending on their family circumstances, added Teo.
For example, they may have a sibling who can take over their share of the co-owned flat, or their parents may wish to switch to a smaller flat that is within their budget.
Top image by Joshua Lee.