Delivered Oral answer by Ministry of National Development on the take-up rate for Lease Buyback Scheme and measures to increase take-up

Mar 21, 2023

Question No: 4280

Question by: Mr Yip Hon Weng

To ask the Minister for National Development (a) what are the main reasons for the low take-up rate for the Lease Buyback Scheme among owners of larger flats; (b) what are the measures being considered to increase the annual take-up rate beyond 1,500 households; and (c) whether there are any upcoming initiatives to assist homeowners in unlocking the value of their flats for retirement needs.

Answer:

The Lease Buyback Scheme was introduced in Mar 2009, to help improve the retirement adequacy of elderly flat owners by enabling them to sell a portion of the lease of their HDB flat to the government, and join CPF LIFE. In return, they receive a stream of income in their retirement years, while continuing to live in their flat.

2.       Since then, we have made enhancements to the Scheme. When it was first introduced, only owners of 3-room or smaller flats were eligible. The Scheme has since been expanded to owners of all flat types, including 5-room and larger flats. In Apr 2020, the maximum LBS bonus was increased by 50% across all flat types, to $30,000 for 3-room and smaller flats, $15,000 for 4-room flats, and $7,500 for 5-room and bigger flats.

3.       There are various reasons why some elderly flat owners may not be keen to take up the Lease Buyback Scheme. Some may have other sources of income to meet their retirement needs, or they have plans to bequeath their homes to their loved ones when they pass on. Others may prefer to take up other monetisation options such as right-sizing to a smaller flat and applying for the Silver Housing Bonus, or renting out spare rooms or their flat.  Our aim is to provide seniors with different options to unlock the value of their flat to supplement their retirement needs, while giving them the autonomy to decide on the best option that suits their needs.

4.       HDB reaches out to seniors on these housing monetisation options in various ways. Besides publishing details of these options on the HDB InfoWEB, HDB also works with media outlets to raise awareness of these schemes alongside public talks, seminars, and mini-exhibitions at local community events. For example, there was a community event, covering housing options for our seniors, at Fengshan CC on 10 Mar 2023.

5.       Moreover, CPF Board invites members turning 55 and 65 years old to attend a CPF Retirement Planning Service which includes sharing on available housing monetisation options. HDB also works with CPF Board to send out letters on housing monetisation options to these seniors. These letters provide seniors with personalised estimates of the proceeds and additional CPF monthly payouts they can receive if they take up the Lease Buyback Scheme, and information on right-sizing with the Silver Housing Bonus. We will continue to explore ways to increase our outreach and communication efforts to seniors on the various housing monetisation options.

6.       HDB will continue to review the housing needs of our elderly flat owners to ensure that our housing policies remain relevant and responsive to the changing needs and preferences.