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BHS increase to $52K from 1 Jan 2017

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Old 13-09-2017, 12:24 AM   #46
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Any new figure next year?
I am guessing it is $54,000 to $54,500.
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Old 13-09-2017, 11:54 AM   #47
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Is it recommended to top up to max so it overflows? Will there be an tax incentives / rebates from this topup/contribution?
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Old 13-09-2017, 12:01 PM   #48
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Is it recommended to top up to max so it overflows?
Often it's a good idea, but it depends on your situation.

Will there be an tax incentives / rebates from this topup/contribution?
There are tax incentives already. They aren't changing, and (if eligible) you can take advantage of them. The only expected change is an increase in the Basic Healthcare Sum (BHS) on January 1.
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Old 13-09-2017, 02:11 PM   #49
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Often it's a good idea, but it depends on your situation.


There are tax incentives already. They aren't changing, and (if eligible) you can take advantage of them. The only expected change is an increase in the Basic Healthcare Sum (BHS) on January 1.
I'm $5K away from this year's $52K. Was thinking if worth the topup or not.

If I top up to $52K (or whatever is the new number in 2018) does it mean the full amount that is intended for MA contributions from my monthly cpf will flow to SA? Tia!
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Old 13-09-2017, 03:55 PM   #50
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I'm $5K away from this year's $52K. Was thinking if worth the topup or not.

If I top up to $52K (or whatever is the new number in 2018) does it mean the full amount that is intended for MA contributions from my monthly cpf will flow to SA? Tia!
Ref: https://www.areyouready.sg/YourInfoH...m_campaign=bau

Yes, it will flow into SA/RA (depending on your age). If your SA reaches the prevailing FRS, your Medisave will flow to SA
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Old 13-09-2017, 07:32 PM   #51
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Ref: https://www.areyouready.sg/YourInfoH...m_campaign=bau

Yes, it will flow into SA/RA (depending on your age). If your SA reaches the prevailing FRS, your Medisave will flow to SA
Does it mean MA will nvr go beyond the current year's MA cap?

Last edited by babyrobo; 14-09-2017 at 09:26 AM..
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Old 13-09-2017, 09:30 PM   #52
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The usual contribution allocation to SA will continue.
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Old 14-09-2017, 09:26 AM   #53
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The usual contribution allocation to SA will continue.
Sorry I meant MA will always remain at the current year cap or will continue to grow with contributions?
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Old 14-09-2017, 10:28 AM   #54
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Sorry I meant MA will always remain at the current year cap or will continue to grow with contributions?
If it can grow above the cap, then cap for f*?
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Old 14-09-2017, 11:24 AM   #55
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Old 14-09-2017, 11:44 AM   #56
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For those of you considering CPF top-ups to take advantage of tax relief -- and you should! -- here are some "rules of thumb":

1. When you're younger, your earnings are usually lower, and you're more likely to have room below your CPF Annual Limit ($37,740/year). (Or you might be one of the few newly minted Singapore Permanent Residents, just starting out with CPF.) You'll also have at least MediShield Life and, probably, Integrated Shield premiums to pay. Therefore, use your first dollars to make a voluntary contribution to your Medisave Account. Zoom it up as quickly as you can, provided you are adequately insured and have a sufficient emergency reserve fund (in Singapore Savings Bonds, preferably). There is no $7K tax relief limit here. There's only the aggregate $80,000/year tax relief limit. If, for example, you're able to top up your Medisave Account by $15,000 -- if you've got that much room below your CPF Annual Limit and can afford that hefty top up -- then you could get $15,000 of tax relief.

Once your Medisave Account hits the Basic Healthcare Sum, compulsory and "three account" voluntary CPF contributions will redirect Medisave dollars into your Special Account (assuming you're below age 55).

Newly minted PRs that can afford it should take advantage of the fact that, during the first two years, they will have LOTS of room below the CPF Annual Limit due to lower compulsory contribution rates. So, if they can afford it, they should zoom up their Medisave Accounts quickly -- for example, with a Basic Healthcare Sum of $52,000 (2017) it'd be nice if they could voluntarily push, say, $30K in immediately (right after picking up a blue card) and the balance in January the next calendar year.

2. If you've got some more top up dollars, then focus on your Special Account top-ups. Yes, you can do both MA and SA, but MA is usually best to do first because of the way overflows work, because you may not always have room below the CPF Annual Limit, and because MA dollars may immediately be useful for qualified insurance premiums and medical expenses. Up to $7K/year of SA top-ups qualifies for tax relief, for you.

3. If you've got some more dollars, then focus on topping up a qualified relative's Special Account, such as your spouse's SA. You may be eligible for further tax relief of up to $7K, for total SA top-up tax relief of up to $14K.

Some people would recommend reversing #3 and #2, or at least putting them on equal footing. I think there's strong merit in that idea, but it depends on your circumstances. If you're topping up a non-working spouse's Special Account, for example, then what you're really doing is boosting that spouse's future lifetime annuity payout. There are good insurance-like benefits to doing that.

Last edited by BBCWatcher; 14-09-2017 at 11:51 AM..
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Old 14-09-2017, 01:40 PM   #57
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BBC gave good advice. Wish I knew abt this earlier. With respect to topping up for spouse, am I right to say that the max relief between the 2 of u is $14k? Ie I can't top up for spouse to get $7k and my spouse top up into own account for the spouse to also get $7k? If so, then the better strategy is for the higher income spouse to top up right?
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Old 14-09-2017, 01:57 PM   #58
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...With respect to topping up for spouse, am I right to say that the max relief between the 2 of u is $14k? Ie I can't top up for spouse to get $7k and my spouse top up into own account for the spouse to also get $7k? If so, then the better strategy is for the higher income spouse to top up right?
This is what IRAS says regarding CPF top-up for spouse:

"To claim tax relief for cash top-ups for your spouse or siblings, the spouse or siblings must not have an annual income exceeding $4,000 in the year preceding the year of top-up."
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Old 14-09-2017, 01:58 PM   #59
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BBC gave good advice. Wish I knew abt this earlier. With respect to topping up for spouse, am I right to say that the max relief between the 2 of u is $14k?
For Special Account top ups, yes. You're limited to $14,000 per year (and $7,000 per qualified individual). You get no tax relief if you have no more taxable income to shield, and tax reliefs are limited in the aggregate to $80,000 per year per taxpayer.

If so, then the better strategy is for the higher income spouse to top up right?
The person in the highest tax bracket should be the one to exploit tax reliefs first. However, Special Account top-ups have some special rules. Let's suppose that you have a taxable income of $80,000 per year and your spouse has a taxable income of $200,000 per year. Your spouse should make two $7,000 Special Account top ups: one to her own account, and one to your account, right? Because he/she is in the higher tax bracket and gets more tax savings? Wrong. You exceed the $4,000/year income limit (based on all income sources) to be a qualified spouse for this particular tax relief, so your spouse would not receive any tax relief on that second $7,000 she used to top up your Special Account.

So that's an important qualification here. In the example I provided, each spouse should top up his/her own Special Account. If we add a child into the picture, as long as that child's income does not exceed $4,000/year then that child is a qualified recipient. Then the $200,000/year earning spouse could top up the child's Special Account and get another $7,000 of tax relief, assuming no other tax relief limits apply. (It might be possible for both spouses to make qualified top ups to the same child, with tax reliefs, but I'm less sure about that.)
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Old 14-09-2017, 03:56 PM   #60
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... If we add a child into the picture, as long as that child's income does not exceed $4,000/year then that child is a qualified recipient. Then the $200,000/year earning spouse could top up the child's Special Account and get another $7,000 of tax relief, assuming no other tax relief limits apply. (It might be possible for both spouses to make qualified top ups to the same child, with tax reliefs, but I'm less sure about that.)
sounds great ... except that there is NO TAX RELIEF for topping up of child's SA

Source: IRAS

You have made a cash top-up in the preceding year under the CPF Retirement Sum Topping-Up Scheme to the Special/Retirement Accounts of your:
- Parents or Parents-in-law;
- Grandparents or Grandparents-in-law;
- Spouse; and/or
- Siblings.
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