A NEW S$7 billion package will provide Central Provident Fund (CPF) bonuses to 1.4 million Singaporeans aged 50 and above “with lower incomes and less wealth”, Prime Minister Lee Hsien Loong said in his National Day Rally speech on Sunday (Aug 20).

Meant for Singaporeans born in 1973 or earlier, the Majulah Package has three components: an annual Earn and Save bonus for those who are working, as well as one-time retirement savings and Medisave top-ups.

In his speech, PM Lee noted that Singaporeans in their 50s and early 60s – whom he called “young seniors” – are in a “unique position” compared to the older Pioneer and Merdeka Generations, as well as younger workers.

Unlike their predecessors, these seniors have benefited more from Singapore’s prosperity and have “generally done better in life”. But compared to younger Singaporeans, they have earned less over their lifetimes and built up less retirement savings, as they had less time to benefit from improvements to the CPF system.

These seniors may also have to juggle caring for ageing parents and looking after their young adult children – while worrying about their own health as they age.

“As young seniors, you are understandably anxious about your retirement needs,” said PM Lee. “Beyond the daily cost-of-living pressures, you know that retirement is creeping up on you. You wonder: ‘Will I have enough to get by? Can I cope?’”

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To provide such reassurance, the Majulah Package boosts the CPF savings of those born in 1973 and earlier. In other words, it covers “young seniors” as well as the Pioneer and Merdeka Generations.

The exact level of support given under this package will be tiered according to one’s income and CPF savings, with details to come at a later date.

First, lower- and middle-income seniors will get the Earn and Save bonus of up to S$1,000 each year as long as they are working, whether full-time or part-time. This will be credited into their CPF accounts, on top of the usual employer and employee contributions.

Second, those whose CPF balances have not reached the basic retirement sum will get a one-off Retirement Savings Bonus of up to S$1,500.

Those who are not working will get this bonus too, as will homemakers who have given up their careers to raise their families and thus have very low CPF balances, said PM Lee.

Third, there will be a one-time Medisave bonus of up to S$1,000 to help with healthcare costs.

In short, those who are working and meet the income criteria will get all three CPF bonuses; those who are not working will get the one-time Retirement Savings Bonus and Medisave bonus.

For Pioneer and Merdeka Generation seniors, all these will be paid out on top of existing benefits from their respective packages.

PM Lee said the Ministry of Finance will create a new fund to meet the full lifetime costs of the Majulah Package, using resources from this term of government. “We will honour this commitment without burdening future generations,” he said.

The prime minister also said that the government will enhance existing schemes such as Silver Support, Workfare and the Matched Retirement Savings scheme, with details to be announced in 2024.

“Taken together, these improvements will help seniors to meet basic retirement needs, especially for lower- and middle-income Singaporeans, so you can have greater peace of mind in your golden years,” he said.