Medisave Required Amount to Increase by $6,500 to $38,500 in 2012. We Have a Right to Know!

The CPF Board has announced that, “from January next year, the Medisave Required Amount (MRA) in the Central Provident Fund (CPF) will be raised to S$38,500 from the current S$32,000.

The CPF Board also said that, “the requirement for members to set aside the MRA in their Medisave Account is to enable them to have enough savings to meet their healthcare needs during old age.

The CPF Board said that, “CPF members will also continue to enjoy a risk free interest rate of four percent on their Special and Medisave Accounts (SMA) for the next three months, from 1 January to 31 March 2013.” According to the CPF Board, “savings in the SMA currently earn either 4 percent or the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1 percent, whichever is the higher… Since the average yield of the 10YSGS plus 1 percent, from 1 December 2011 to 30 November 2012, works out to be 2.49 percent, the SMA interest rate payable to CPF members from 1 January 2013 to 31 March 2013 will be maintained at the current floor of 4 percent.”

As Singaporeans, we need to demand to the government to halt this increase of the MRA for, $32,000 to $38,500. This is an increase of $6,500 – or more than 7 or 8 months the pay of the lowest wage workers in Singapore. This means that for the lowest wage workers, they wouldn’t be able to withdraw from the MRA if they don’t meet the new balance of $38,500 for the next few months. Accounting for their expenditure, it would take years for them to meet this new balance.


1. Why has the MRA been increased by $6,500, from $32,000 to $38,500? What is the exact formula to calculate this increase? What is the exact breakdown of what this increase of $6,500 is meant to cover? We demand to know the formula and the exact breakdown of this increase, and how this increase is obtained.

2. How is the lower income earners expected to be able to raise this amount of $6,500 for their MRA? How long is it expected to take for the lower income earners to be able to meet the new MRA amount of $38,500? We demand to have information of how the lower income earners are expected to be able to find the financial capacity to meet this increase of $6,500 to the MRA and when they will be able to withdraw from their MRA.

3. The MRA was last raised from $27,500 to $32,000 in January 2011. This is an increase of $4,500, or 16%. Within a year, the government is raising the MRA again by another $6,500, or 20%, from $32,000 to $38,500. From 2010, the MRA has been raised by 40%! In fact, the MRA has been increased year-on-year for the past few years. In 2010, it was increased by 22%. In 2009, it was increased by 25%. In effect, it was raised by 114% from $18,000 in 2008! From 2008 to 2011, the real income growth of Singaporeans had only increased by less than 2%, or even have negative-growth, which means our wages have in fact not increased! Why are Singaporeans expected to pay for an increase of 20% on their MRA, from 2011 to 2012, when their salaries most likely grew at less than 20 times the rate? Why are we expected to pay from an increase of 114% from 2008 to 2012 on the MRA, when our real income most likely grew at less than 100 times the rate? Where does the government and the CPF Board expect us to obtain our income increase from to top up the MRA? We demand that the government is transparent and accountable, by letting Singaporeans know the exact formula which is used to calculate the MRA and the exact breakdown of the increase of $6,500 in 2012, and in every other year preceding.

4. Have healthcare costs risen by 20%, such that Singaporeans are expected to increase their MRA by 20%? What is the increase in healthcare costs in 2012? We demand that the government give us a breakdown of the increase in healthcare costs to let us know how this has affected the calculation of the increase to our MRA.

5. According to the World Health Organisation, in 2009, the general government expenditure on health as a proportion of total expenditure on health is 36.1%. This actually went down by 15.3 percentage points from 51.4% in 2000. Why has the government expenditure on healthcare gone down, while the government expects Singaporeans to pay more out of their pockets? Why has government expenditure went down by 15.3% from 2000 to 2009, and yet the government expects Singaporeans to increase what they have as a minimum in the MRA by 114% from 2008 to 2012? Many other developed and developing countries had increased the proportion of government expenditure on healthcare from 2000 to 2009. Why has the government decided to reduce its responsibility, and to such a low proportion? We demand to know why the government has reduced its proportion of healthcare expenditure to Singaporeans. We demand to know why the government expects Singaporeans to pay more out of pocket, even when their real wages have stagnated or have negative-growth.

6. The overall CPF monies are invested in the Singapore Government Securities, which are then borrowed by the Singapore government to be invested in GIC and Temasek Holdings, which had reaped interest rates of 6.8% and 17% respectively. Where do these returns go to? Why is the government’s recourse to ask Singaporeans to pay more to increase the MRA balance instead of to channel the interest earned back into the CPF monies? We demand to know why the government did not inform Singaporeans clearly of the investment of the Singapore Government Securities into GIC and Temasek, when announcing the increase in MRA. We demand to know that if GIC and Temasek earns an interest of 6.8% and 17% respectively, why is the Singapore Government Securities only earning an interest of 1.49%, if the securities are invested in GIC and Temasek. We demand to know why the government did not channel the interest rates earned from GIC and Temasek to top up for any increase in MRA.

Singaporeans, we have a right to know. And we demand that the government provides us with this information to be transparent and accountable. We demand that the government halt this increase and provide us with this information, before Singaporeans make a decision as to what is a viable increase, when we are able to make an informed decision with all the facts and information available. The CPF is our money. We have a right to know how it’s used and how we are made to contribute to our CPF monies. We have a right to know how any calculations to increase the minimum sum in our CPF is made, with our full knowledge and agreement.


  1. vin8tan

    While I agree that the increase has to be justified and there has to be more transparency, I don’t agree that we should halt the increase altogether. Let’s face it we’re stuck in a capitalisitic economical system and things will onlly get more expensive year on year. I just hope that the increase will translate to better services and shorter waiting time too, it should also translate to making juobs in the healthcare industry more appealing such as better pays for nurses and allied healthcare workers, not the doctors obviously, but that’s another story for another time. The increase should be tiered too, so people in the lower income bracket won’t have to carry the additional burden and have more in their pockets to weather them during rainy days. It should not be a blanket cover that treats everyone as a number in the system, but we should be treated as individuals, who make up Sigapore. That being said, since the cost of health care uis set to rise, the government should also top up the balance of those lower income so that their medicsave is adequate, because they access the same services.

    • My Right to Love

      Hi Avin,

      Agree that the increase should not be completely halted. I had meant that the increase should be halted until we are able to make a decision, with all the facts and information available. I’ve amended the article to reflect that.

      Secondly, we need to look at the increase from a holistic perspective. Why is that only Singaporeans have to take responsibility for any increase in MRA? Where is the government’s responsibility? In fact, the proportionate spending by the government on healthcare has actually gone down by 15% from 2000 to 2009. Why is the government not playing its part and taking responsibility?

      Why is the government putting all responsibility on the people, when their real wages have only marginally increased, or in fact, decreased? The government is in full control of the economics, and the demand and supply in Singapore, and thus the wages and growth, or lack thereof in Singapore – because the government owns the investment companies, GIC and Temasek, which owns shares in all the Singapore-linked companies. In effect, the government determined market demand-supply and thus any wage changes.

      If the government is able to moderate wages, why did they keep the growth stagnant and negative? Why did they expect the people to pay more for the MRA, at significantly higher proportions than their wage change?

      If the government keeps wage change minimal, and continue to increase costs, yet chooses to cut down on their proportionate spending on healthcare, yet expect the people to pay more, is this fair? Is it right?


  2. Pingback: Dear Singaporeans, Do You Know The Real Reason Why They Do Not Want To Increase Taxes? Profits. « The Heart Truths

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