sg budget 2011

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sg budget 2011

Post  fairyjade on 20/2/2011, 04:36

Dear CPF member,

Singapore Budget 2011 - Initiatives Relating to CPF


More for Your Retirement!
Taking into consideration the sustained economic growth and to keep pace with income growth, the Government is making the following changes on 1 September 2011 to help you save more for your retirement:

(1) Increase in Employer CPF Contribution by 0.5 Percentage Point
The additional 0.5 percentage point will go into your Special Account to help you save more for retirement. This increase will be on top of the 0.5 percentage point increases each on 1 September 2010 and 1 March 2011 that were previously announced, thus restoring the total CPF contribution rate to 36%.

All employees will benefit from the new CPF contribution rate change. Employees aged above 35 who are earning between $50 and $1,500 per month will also see pro-rated increases in their CPF contribution rate.

(2) Increase in CPF Salary Ceiling to $5,000
The CPF salary ceiling will be adjusted upwards from $4,500 to $5,000 for all age groups. This change will benefit an estimated 390,000 members earning more than $4,500 a month.


Workfare Special Bonus (WSB)
To ensure that low-wage workers benefit from the economic growth, the Government will provide a one-off Workfare Special Bonus (WSB) over and above the regular Workfare Income Supplement (WIS). The WSB will reward low-wage workers aged 35 and above for work done in 2010, 2011 and 2012, and will be given out in four equal payments:

Workfare Special Bonus
Qualifying period during which work is done
Payment Date

2010
Jan-Dec 2010
May-11

Dec-11

2011
Jan-Dec 2011
Dec-12

2012
Jan-Dec 2012
Dec-13



Employees can receive up to $2,800 WSB. The payments will be made fully in cash. Self-Employed Persons can receive up to $1,868 WSB. The payments will be made half in cash and half into their CPF Medisave Accounts.


Tax Benefits for Voluntary Contributions by Companies to Self-Employed Persons' Medisave Accounts
To increase Self-Employed Persons' (SEP) savings to meet their medical needs, tax benefits will be given for voluntary contributions made by companies to the Medisave Accounts of SEPs who work with them. If you are self-employed, both you and the company you work with will enjoy the tax benefits.

The benefit to a SEP is: Contributions made by your company to your Medisave Account will now be tax-exempt up to $1,500 per calendar year.

The benefit to a company which voluntarily contributes to SEPs' Medisave Accounts is: The company will be allowed tax deductions of up to $1,500 per Self-Employed per calendar year.

These changes are applicable for voluntary contributions made from 1 January 2011, and the tax benefits will take effect from Year of Assessment 2012.


For more details of the CPF changes, please click here.


Yours faithfully
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fairyjade
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