Usage of CPFMA
In Singapore, the Central Provident Fund (CPF) is a compulsory savings plan for working Singaporeans and Singapore permanent residents (SgPR) mainly to fund for their retirement, housing, and healthcare needs. The contribution into your CPF account derives from your gross income and the contribution rate differs across age bands. For example, those who are 55 years and below will contribute 20% of your gross income into your CPF account while your employer contributes 17%. Out of this total 37%, 8% goes into your Medisave Account (MA). What can you do with your MA money? Primarily, the money in your MA is for healthcare needs. The money can fund for a variety of medical treatments including approved inpatient hospitalization, day surgeries, rehabilitative care, palliative care, vaccinations, health screening, radiotherapy, etc.
MA also pays for the purchase of medical insurance, which includes paying for the premiums on our MediShield Life and any complementary private Integrated Shield Plans (IPs), as well as getting severe disability coverage via CareShield Life (formerly known as ElderShield). As your age goes up the age band, the percentage allocation into Medisave will also increase as healthcare need is more crucial at older age.
Medisave Account is for healthcare needs.
Medisave account maintains a Basic Healthcare Sum (BHS) which is the maximum amount a person can have in his/ her MA. Currently BHS is set at $60,000, any excess contribution will automatically flow into your CPF Special account. While you are accumulating the money in your MA, you earn an interest rate of 4% per annum. If you have worked for more than 10 years, you would have easily hit the BHS limit. You may also do Voluntary Contribution (VC) to all 3 CPF accounts or just contribution to Medisave Account only. Your mandatory annual CFP contribution and VC cannot exceed $37,740, VC to Medisave account is further subject to BHS limit. In summary, usage of MA:
pay for selected medical treatment
purchase of medical insurance and disability cover
More details can be found on CPF.gov.sg