SINGAPORE – CareShield Life, which provides lifetime payouts of at least $600 a month in the event of severe disability requiring long-term care, will start on Oct 1 this year.
It will be compulsory for all residents born in 1980 or later – in other words, people who are 40 years or younger this year.
Under the scheme, they will start paying annual premiums using their Medisave accounts on reaching their 30th birthday and stop paying at the age of 67, which means paying a total of 38 premiums.
They continue to be covered for the rest of their lives even after they stop paying premiums.
On Oct 1, all those 30-40 years old will start paying premiums and be included in the national long-term care insurance scheme.
People who do not have enough money in their Medisave may use money from their spouse’s Medisave, or that of an approved family member.
There is also government subsidy.
Lower- to middle-income residents, which make up two-thirds of households, will get up to 30 per cent subsidy for their premiums.
Singaporeans who still cannot afford the premiums can apply for additional support from the Government.
There is also a transitional subsidy of up to $250 for everyone joining the scheme in the first five years.
Should they develop severe disability that entitles them to a payout, they stop paying premiums even if they are younger than the last premium payment age of 67 years.
As it provides universal coverage, anyone with severe disability at the joining age of 30 years have to pay only the first premium in order to qualify for lifetime payouts.
The amount of payout will increase over the years, starting with $600 a month this year. This is to ensure that the payout is enough to meet rising costs.
For the first five years, both premiums and payouts will go up by 2 per cent a year.
In the launch year, premiums for 30-year-olds start at $206 a year for men and $253 for women.
The amount of premiums and payouts in future will be decided by the CareShield Life Council, which was set up in April this year.
However, once a person starts collecting a payout, that amount becomes fixed for the person and will not increase, even though the scheme’s payout amount goes up in future.
Similarly, the payout quantum will be frozen at the amount in force the year a person pays the last premium at the age of 67.
Minister for Health Gan Kim Yong said in a statement on Friday (Aug 28): “As our population ages, we want to ensure that Singaporeans continue to have accessible and affordable long-term care.
“With CareShield Life, severely disabled Singaporeans can be assured that they will receive financial support for life.”
Severe disability is defined as needing help in at least three of these activities of daily living: eating, getting dressed, using the toilet, bathing, moving or walking around, and getting from the bed to a chair or vice versa.
Mr Gan said that together with ElderFund, which helps lower-income and severely disabled Singaporeans, “these schemes will collectively enhance support for long-term care costs”.
Older residents may join CareShield Life at a later date, but details will be released only next year. It will not be compulsory for them.
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