Monday, November 21, 2011

New CPF savings scheme for parents with special needs children

SINGAPORE - A new Special Needs Savings Scheme (SNSS) to be implemented in early 2012 will allow parents to nominate their children to receive monthly payouts from their CPF accounts after they have passed on.

Under SNSS, parents can arrange for a monthly stream of income - of whose quantum they can decide starting from a minimum amount of $250 - to their special needs children after their death.

SNSS, which requires no administrative charge and no minimum balance during sign up, is useful for parents who do not have substantial savings outside of their CPFs.

CPF interest rates will continue to be paid on the funds nominated to SNSS nominees, and the extra 1 per cent interest will be paid on the first $60,000 of the combined balance of the nominated monies and the child's own savings.

To start the scheme, a participating parent's CPF savings upon his death must be sufficient to support a year's worth of payouts - in other words, a balance of $3,000 for a monthly payout of $250. Otherwise, the deceased parent's CPF savings will be disbursed as a lump sum.

To be eligible for the scheme, the parent, and child with disabilities have to be Singaporeans or Permanent Residents. The child has to be attending or has attended a Special Education (SPED) school, or who requires assistance in at least one Activity of Daily Living (ADL) - which includes dressing, feeding, going to the toilet, and moving about.

SNSS will complement the existing Special Needs Trust Company (SNTC), which is a trust arrangement and care plan set up by parents. SNTC requires a minimum of $5,000 cash upon start-up.

Parents can top up the trust account any time with cash or nominate the trust they set up under SNTC as a beneficiary of their insurance policies or CPF savings.

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