Several Members of the House have spoken about the need for more public housing support for the elderly and the low-income. I have earlier explained the Government’s overall framework in catering to the housing needs of Singaporeans. Let me now elaborate on the specific measures to help the elderly and low-income households, especially those in financial difficulties.

Monetisation Options for the Elderly

2 As Members noted, post-retirement financial security is an important consideration for the elderly. Fortunately, most elderly HDB lessees have a store of wealth in the form of their HDB flat that they have paid for with their hard-earned savings and the help of Government subsidies. It is therefore important that elderly households be able to monetise their flats to supplement their CPF and other savings. In this regard, the HDB has put in place a range of monetisation options to suit the different needs and circumstances of elderly households. Let me go through these options.

Staying with family

3 Many Members of Parliament who appeal on behalf of their elderly residents do not consider the option of staying with their families. This is an important option. For elderly lessees who can move to stay with their family, they can monetise their flat by either selling their flat or subletting their flat and realise a steady stream of rental income. This is quite a lucrative option. The average rental for a 3-room flat in Tampines is about $1,000. So far, 12,600 households in Singapore have taken the option to sublet their whole flats. As announced, we will relax the rules to allow more flats to be sublet.

Downgrading option

4 The next option is downgrading. For elderly households who would like to stay on their own, they can unlock their housing equity by selling their flat and buying a smaller flat or a Studio Apartment. For example, an elderly household downgrading from a 3-room flat to a Studio Apartment can unlock about $80,000 in cash and CPF proceeds to meet non-housing needs, assuming there is no outstanding loan.

Supply of smaller flats

5 HDB has offered some 1,400 units of Studio Apartments to date. They have been very well received. Almost all of them have been taken up. We intend to build more. Since last year, HDB has also resumed the building of new 2-room flats.

Ageing-in-Place

6 There will be others who prefer to age in place within the familiarity of their existing flat and neighbourhood. For such elderly households, they can sublet one or two rooms to earn rental income. Again, this is a lucrative option. A HDB room, depending on its location, can fetch between $250 and $500 per month in rental. Another option is reverse mortgage. Since March 2006, HDB has relaxed its regulations to allow the elderly to commit their flat to a reverse mortgage and receive a regular income stream. This is a scheme offered by the private sector. HDB does not intend to offer reverse mortgages or undertake the risks as suggested by the Member. I accept that not many have chosen to take up the reverse mortgage scheme, as they are not so familiar with it. My Ministry is looking into this and will be exploring other monetisation options, including home reversion, to give them greater variety of choice.

Barrier Free Access (BFA)

7 To facilitate the mobility of the elderly residents so that they can live active lives, it is important that our housing estates are elder-friendly. Minister of State for National Development had earlier updated Members about the progress of the Lift Upgrading Programme. We are also supporting the Town Councils to extend Barrier Free Accessibility or BFA, to all HDB precincts by 2011.

CIPC funding for BFA

8 To do so, MND will make available funding from the Community Improvement Projects Committee (or CIPC) for the construction of BFA items such as ramps and railings. All Town Councils have been invited to draw up their BFA master plans for their estates, and apply for access to the CIPC funds. I want to make it clear that we are not excluding any Town Councils from applying for this fund. In fact, we have written to all of them to invite them to apply for this fund. The procedure is for them to apply through the Citizens’ Consultative Committee (CCC) because they are most familiar with the constituencies’ needs.

Summary of measures for elderly

9 To summarise, we are taking a three-pronged approach to helping the elderly with their housing needs. First, we will continue to facilitate monetisation by the elderly through downgrading, by building more Studio Apartments and smaller flats. Second, we will explore the enhancement of monetisation options to cater to those who wish to age in place. Finally, we will continue to make our housing estates more conducive to elderly living through Lift Upgrading and BFA.

Low Income – Public Rental Scheme

10 Let me now move on to the low-income households. Even as we continue to ensure the affordability of our flats for the vast majority of Singaporeans, there are citizen households who do not have the financial means to afford home-ownership. It would be wrong for us to get them into home ownership when they cannot afford it. For these households, we are providing a roof over their heads through the Public Rental Scheme. As rental housing is meant for the extremely poor, the subsidies are very high. They are not meant for those who want to leave their homes because they want to live on their own.

Supply of rental flats

11 To extend more help to needy households, I had announced in November 2006 that HDB would increase the supply of subsidised rental flats, starting with converting some flats at Boon Lay and Woodlands into about 1,000 units of 1- and 2-room rental flats. HDB has also commenced the building of new rental blocks at Choa Chu Kang, Sembawang and Yishun, and we intend to convert another two blocks at Redhill to rental units. All this will yield a total of 2,250 more rental units by 2009.

Rental subsidies to remain targeted

12 We also need to ensure that the rental subsidies are targeted at those who really need them. This is why we have aligned our rental rates to household income. About 80% of our tenants who have household incomes below $800 a month, will continue to pay heavily subsidised rent of about $30 a month for a 1-room flat. Those earning between $800 and $1,500 a month are paying rental of $110 per month, while those whose incomes are now above $1,500 per month, pay higher rates of $180 to $250 per month. This last group of tenants ought to be able to afford to buy a small flat with some help from the Government. This is why we introduced the Additional Housing Grant; we want to encourage and help them along in that direction. We must continue with our home ownership policy – helping Singaporeans to own their own homes.

Rationale for permanent debarment rule

13 The Member has asked whether HDB would review the permanent debarment rule to allow an elderly to switch to a rental flat. The question really is whether we should provide yet another subsidy, a third subsidy in some cases, as HDB rental flats are essentially subsidised flats. We should really be reserving these heavily subsidised rental flats for those whose financial and family circumstances do not offer them any other housing options.

14 In the example that the Member cited, there was no mention about option of staying with the family. In many appeal cases we see, they have 3 or more children. When we ask why they do not stay with their own children, they said it is inconvenient. Surely it is incumbent upon the children to look after their parents’ housing needs. It is important for us to continue to maintain our family values and insist that staying with the family should be the first and not the last option.

Financial Hardship—Mortgagee Sale Cases

15 The same situation applies to those with financial difficulties with their mortgage loans. As a general policy, HDB is unable to intervene, as this is a private matter between the borrowers and the banks. However, HDB does have an arrangement in place with the banks, where it will be notified of an impending bank repossession case. It will then work through its Branch Offices to contact the family concerned to offer advice and assistance. Where applicable, HDB will also notify the Family Service Centres and the Community Development Councils so that they can also help the family to explore alternative accommodation and provide support such as counseling, financial help and work assistance.

16 However, not all mortgagee sale cases will need HDB’s help with their housing arrangement. Some of them can reside with their relatives or rent a flat from the open market until they are financially ready to purchase another flat. My Parliamentary Secretary had previously explained that there were 895 households affected by mortgagee cases. This makes up 1% of the bank loan cases.

17 We will help those who are truly needy. Among the 895 households affected by mortgagee sale action so far, 273 have appealed to HDB for some form of help. Of these, 131(48%) or about half were offered a rental flat while another 13(5%) who met credit assessment guidelines were provided a concessionary loan to purchase another flat.

Conclusion

18 In conclusion, let me restate that our housing subsidies are limited and they need to be carefully and equitably distributed, with focus on the truly deserving cases. Therefore, personal financial responsibility and familial support remain key. Where these are not available, the Government would step in to provide more housing help to needy families.

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