Reasons for Low Take-up Rate for Lease Buyback Scheme among Owners of Larger Flats

26 Mr Yip Hon Weng asked 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.

The Minister of State for National Development (Assoc Prof Dr Muhammad Faishal Ibrahim) (for the Minister for National Development): Sir, the Lease Buyback Scheme (LBS) was introduced in March 2009, to help improve the retirement adequacy of elderly flat owners by enabling them to sell a portion of the lease of their Housing and Development Board (HDB) flat to the Government and join the Central Provident Fund (CPF) LIFE. In return, they receive a stream of income in their retirement years, while continuing to live in their flat.

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 April 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.

There are various reasons why some elderly flat owners may not be keen to take up the LBS. 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.

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 Community Club on 10 March 2023.

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 LBS and information on right-sizing with the Silver Housing Bonus.

Sir, we will continue to explore ways to increase our outreach and communication efforts to seniors on the various housing monetisation options. 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.

12.00 pm

Mr Speaker: Order. End of Question Time. The Clerk will now proceed to read the Order of the day.

[Pursuant to Standing Order No 22(3), provided that Members had not asked for questions standing in their names to be postponed to a later Sitting day or withdrawn, written answers to questions not reached by the end of Question Time are reproduced in the Appendix.]