Contribution to Parents CPF

[orange_sky]

Not too familiar with CPF stuffs, but supposing I have a parent who is 70 years old this year. I would like to give a monthly allowance to this parent via contributing to the parent's CPF (RA?) and get tax relief at the same time. Would this fall under the $7k tax relief scheme and if so, can the 70 year old parent withdraw the money as and when he likes or are there certain conditions?

Yes for tax relief if your parent income is less than a certain amount.

No he cannot take out any time. His monthly withdrawal from cpf will increase as a result of your contribution.

 

[oceanicmanta]

Not too familiar with CPF stuffs, but supposing I have a parent who is 70 years old this year. I would like to give a monthly allowance to this parent via contributing to the parent's CPF (RA?) and get tax relief at the same time. Would this fall under the $7k tax relief scheme and if so, can the 70 year old parent withdraw the money as and when he likes or are there certain conditions?

at 70 this yr, your parent shld be on Retirement Sum Scheme (those born b4 1958)

10k top up to his RA, he can withdraw $297 a month for 30 months.

$297 is the min. monthly drawdown, so if just 7k, it will last shorter.

if he is not currently receiving monthly drawdown, will need to apply.

 

[elnewbie]

The rules were a lot less stringent a few years back.

Anyone knows why my father was allowed to withdraw all his RA balance (about $4,821) at one go some years back? Before that he was getting monthly payout of $297.

 

[oceanicmanta]

a little OT but somewhat related ...

if parent has insufficient MediSave for MSL premiums, will CPF take from RA to pay ?

quick check on CPF FAQ but never say will or will not

 

[henrylbh]

The rules were a lot less stringent a few years back.

Certainly there are much more rules. And there are more options, but I can't say the rules are more stringent now.

 

[elnewbie]

Certainly there are much more rules. And there are more options, but I can't say the rules are more stringent now.

https://services.mom.gov.sg/cpfpane... Withdrawal at the Payout Eligibility Age.pdf

See Annex 3-A on how they had tightened the rules over the years.

 

[BBCWatcher]

if parent has insufficient MediSave for MSL premiums, will CPF take from RA to pay ?

No, that's not one of the collection mechanisms available, at least not while the individual is alive.

 

[RoLanTo]

Hi. Is there a way from the cpf to check if my parents are in old MSS scheme or Cpf life scheme?
Or must call in to confirm?

 

[BBCWatcher]

I think if they (individually) log onto CPF with their Singpasses then click on "My Messages" on the left side menu it should be pretty clear.

 

[henrylbh]

Hi. Is there a way from the cpf to check if my parents are in old MSS scheme or Cpf life scheme?
Or must call in to confirm?

If they borned before 1958 and did not take action to opt in for CPF Life, they are under MMS.

 

[henrylbh]

https://services.mom.gov.sg/cpfpane... Withdrawal at the Payout Eligibility Age.pdf

See Annex 3-A on how they had tightened the rules over the years.

Some rules are tightened and for good reasons, but overall, they are getting better with flexibility.

 

[vince123123]

Thanks for both of your inputs.

I reckon that both of you are envisaging a lump sum contribution scenario. Would it be applicable if I am contributing in smaller instalments on a monthly basis, for e.g. say $350 per month? Might also be doing lump sump contribution annually in addition to this.

Parent is currently retired with no income.

Yes for tax relief if your parent income is less than a certain amount.

No he cannot take out any time. His monthly withdrawal from cpf will increase as a result of your contribution.

at 70 this yr, your parent shld be on Retirement Sum Scheme (those born b4 1958)

10k top up to his RA, he can withdraw $297 a month for 30 months.

$297 is the min. monthly drawdown, so if just 7k, it will last shorter.

if he is not currently receiving monthly drawdown, will need to apply.

 

[henrylbh]

You can giro the topping up and still get tax relief up to 7k. But 350 goes in as top-up and 297 comes out as drawdown each month you can't benefit much on 350 - 297 on interest of 6%.

Best if you qualify to transfer your OA (earning 2.5%) to their RA (earning 6% on first 30k and 5% on next 30k). Only no tax relief. But topping up comes back to you if they uplorry as they can't do nomination on top-up by CPF.

 

[LiteHouse]

You can giro the topping up and still get tax relief up to 7k. But 350 goes in as top-up and 297 comes out as drawdown each month you can't benefit much on 350 - 297 on interest of 6%.

Best if you qualify to transfer your OA (earning 2.5%) to their RA (earning 6% on first 30k and 5% on next 30k). Only no tax relief. But topping up comes back to you if they uplorry as they can't do nomination on top-up by CPF.

Any link to read more about CPF transferred funds going back from recipient to the donor? Really cannot allow the recipient to nominate the funds away? The funds are already sitting in the recipient's CPF account. Then it seems like a temporary parking in the name of contribution.

 

[elnewbie]

It's stated in black and white on CPF website. And I've called CPF on this as well.

Any link to read more about CPF transferred funds going back from recipient to the donor? Really cannot allow the recipient to nominate the funds away? The funds are already sitting in the recipient's CPF account. Then it seems like a temporary parking in the name of contribution.

 

[tmkedmw]

Confirmed that recipient fund goes back to donor. Had ever ask CPF officer face-to-face. It is more that just parking there. The funds whilst at recipient is earning higher interest.

Any link to read more about CPF transferred funds going back from recipient to the donor? Really cannot allow the recipient to nominate the funds away? The funds are already sitting in the recipient's CPF account. Then it seems like a temporary parking in the name of contribution.

 

[Nofear40]

Confirmed that recipient fund goes back to donor. Had ever ask CPF officer face-to-face. It is more that just parking there. The funds whilst at recipient is earning higher interest.

https://www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-scheme#others#
If my recipient passes away, will my top-ups be refunded to me?

A
Cash top-ups made on/after 1 November 2008 will be treated as cash gifts to the recipient. Any remaining cash top-ups will be paid to the recipient's nominees based on his CPF nomination or will be transferred to the Public Trustee for distribution according to the intestacy laws if there is no nomination.

For CPF top-ups made on/after 1 November 2008, any remaining top-up monies will be returned to the givers' CPF Account(s), capped at the principal top-up amount.

For cash and CPF top-ups made before 1 November 2008, the remaining top-up monies will be returned to the givers' Ordinary Account, capped at the principal top-up amounts.

If the giver passes away before the recipient, then upon the death of the recipient, the topped-up monies returned to the giver's CPF accounts will be paid to the giver's appointed nominees.

 

[tmkedmw]

https://www.cpf.gov.sg/Members/Schemes/schemes/retirement/retirement-sum-scheme#others#
If my recipient passes away, will my top-ups be refunded to me?

...
For CPF top-ups made on/after 1 November 2008, any remaining top-up monies will be returned to the givers' CPF Account(s), capped at the principal top-up amount.

waseh, accrued interest at recipient's doesn't go back to donor, only principal nia.

So if one do a CPF top up of recipient, if the recipient uplorry, you can only have the principal amount refunded back to your CPF. So in actual fact, it is worse off for you when compared to leaving the money in your own CPF account as you wld have accrue interest.
This also means that whatever accrued interest in recipients account at the time of uplorry will be distributed as per nomination.

Any other interpretation?

 

[orange_sky]

If your recipient passes away, his cpf will be distributed according to his nomination. Your past contribution does not mean a thing

 

[henrylbh]

If your recipient passes away, his cpf will be distributed according to his nomination. Your past contribution does not mean a thing

Did you read 2 posts before instead of just saying what you want?