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$8b fund to benefit Pioneer Generation
THE government will pump $8 billion into a new fund that will help Singapore's pioneers - those aged 65 or older this year - with their healthcare costs for the rest of their lives.
This money, with accumulated interest over time, will be enough to pay for the full projected cost of the Pioneer Generation Package, including a buffer for inflation.
The cost of providing the extra healthcare benefits to the group of 450,000 recipients over their lifetime will be slightly over $9 billion in nominal terms, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam in Parliament yesterday as he unveiled the full details of the package.
Of the $8 billion in the fund, about half that amount will be drawn down in the first 10 years due to the age profile of these pioneers and the higher benefits that will be given to those who are older.
Mr Tharman added that all those eligible for the package - those who were at least 16 years old in 1965, and (for practical reasons) had became citizens before 1987- will get the special benefits regardless of their income level today.
"Our objective is to honour the contributions of this whole generation. However, (those) who are less well-off will benefit more where there are higher underlying subsidies for all lower-income Singaporeans," he said.
He added that it was "right and prudent" to set aside money now to pay for the package while the country has sufficient resources to do so.
"With this fund, we assure the pioneer generation that Singapore will honour our commitment to them, regardless of future economic circumstances. The fund also ensures that Budgets in subsequent years can focus on the needs and challenges of the future, for all Singaporeans," said Mr Tharman.
He explained that the $8 billion in the fund was not meant to cover the underlying healthcare subsidies that the pioneers receive together with all other Singaporeans. These, he said, would continue to be funded from future annual budgets.
As he outlined the different components of the package, Mr Tharman revealed that all pioneers would get annual top-ups of between $200 and $800 in their Medisave accounts, depending on their age group.
He assured the pioneer group that they will get subsidies to pay for their premiums under the new MediShield Life, the universal health insurance scheme that will cover all Singaporeans for life.
Older people will get more subsidies. Those aged 65 will get a 40 per cent cut, and this rate will go up to 60 per cent for those aged 90 and above.
With this combination of subsidies and Medisave top-ups, a person aged 80 or older will have his or her MediShield Life premiums fully covered. Those who are younger, around 70 years old this year, will pay about half of their current premiums.
The MediShield Life Review Committee is currently reviewing the benefits and premiums, which will be ready later this year. The subsidies will be implemented at the end of 2015, when the scheme is eventually rolled out.
Pioneers will get a 50 per cent discount off their bills at specialist outpatient clinics and polyclinics, which will bring their total subsidies to 75-85 per cent of their bills. This, said Mr Tharman, is on top of the underlying subsidies that are means-tested.
Those with moderate to severe disabilities will get an extra cash boost of $1,200 a year under a new Disability Assistance Scheme.
All pioneers will also be automatically included in the government's Community Health Assist Scheme (CHAS), which subsidises the cost of their visits to private general practitioners and dentists. In the past, only the lower and middle-income groups could qualify for this programme.
Mr Tharman recognised that there could be some who may have just missed out on the qualifying criteria for the Pioneer Generation Package but have "good claims" to be included. The government will set up a panel to assess these appeals on a case-by- case basis.