I don't understand why TS mentions about his mum "returning" the money to him while those are her retirement funds in the first place.
Right. It's a "Mom, give me your house, now!" maneuver.
This doesn't strike me as viable. The government is heavily involved every step of the way (HDB, CPF), and I'm sure the government is not naive. Questions will be asked, at the very least. It's also a very expensive way to raise cash.
obviously there are certain conditions that i didn't share as it is personal and not relevant to the question.
OK, but there better be a
damn good reason why you'd even ask a parent to hand over his/her house to you. It's hard for me to imagine being so desperate that I would even make such a request. I love my parents, and they've already been incredibly generous during the first two decades of my life -- and beyond that, for that matter. That's more than enough, and I'm eternally grateful...and ready to help
them out.
The reality here is that you have a relatively high CPF balance precisely because you've had many years of relatively high (or higher) income. If you're in financial distress, it's not because of lack of income. If something went horribly wrong, it's all on you. A gambling debt isn't a bad guess in these circumstances.
As it happens, you
can tap your CPF funds in a dire emergency, and with zero transaction costs. You (or a loved one) just heads over to a CPF customer service office, explains the situation (e.g. a terminal illness), and CPF arranges an exceptional withdrawal. Here are the exact rules for that particular provision:
You can apply to withdraw your CPF savings on medical grounds if you
i. are physically or mentally incapacitated from ever continuing in any employment; or
ii. have a severely impaired life expectancy; or
iii. lack capacity within the meaning of Section 4 of the Mental Capacity Act (MCA) and the lack of capacity is likely to be permanent; or
iv. are terminally ill.