Upcoming CPF changes in 2025

As we step into 2025, significant changes to Central Provident Fund (CPF) system will take effect, aimed at enhancing retirement adequacy and aligning policies with evolving needs. Here’s an overview of the major updates CPF members should be aware of:

1. Increased CPF Ordinary Wage Ceiling

The CPF Ordinary Wage (OW) ceiling, which limits the monthly salary subject to CPF contributions, is being progressively raised to $8,000 by 2026. This change began in September 2023 and will continue as follows:

While the OW ceiling increases, the CPF annual salary ceiling remains unchanged at $102,000.

2. Closure of Special Account for Members Aged 55 and Above

Starting from the second half of January 2025, the CPF Special Account (SA) for members aged 55 and above will be closed. Funds from the SA will be transferred to the Retirement Account (RA) up to the cohort’s Full Retirement Sum (FRS). Any remaining balance will move to the Ordinary Account (OA).

• Members can withdraw the transferred SA funds or move them to the RA, up to the Enhanced Retirement Sum (ERS).
• Retirement Account funds will continue to earn a higher interest rate, ensuring better payouts in retirement.

CPF account holders will be notified via email, SMS, or hard copy once their SA is closed.

3. Enhanced Retirement Sum

From January 1, 2025, the Enhanced Retirement Sum (ERS) will increase from $308,700 to $426,000. CPF members aged 55 and above can top up their RA to this new limit for higher monthly payouts:

• Topping up to $426,000 allows for monthly payouts of about $3,330 from age 65, up from the current $2,530.

4. Increased CPF Contribution Rates for Senior Workers

To strengthen retirement adequacy, CPF contribution rates for members aged above 55 to 65 will increase from January 1, 2025:

Increases will be fully allocated to the RA for members who have not met the FRS, boosting their retirement savings.

5. Basic Healthcare Sum Adjustment

The Basic Healthcare Sum (BHS) for members below age 65 will increase from $71,500 to $75,500 in 2025 to reflect rising healthcare costs. For members aged 65 and above, the BHS will remain fixed at the level applicable when they turned 65.

6. Mandatory CPF Contributions for Platform Workers

From January 1, 2025, platform operators will deduct CPF contributions from platform workers, such as ride-hailing drivers and delivery personnel. These contributions will be gradually aligned with employees’ rates over five years.

• Workers’ contribution rate: 20% by 2029.
• Operators’ contribution rate: 17% by 2029.

Here is the table based on the provided data:

7. Matched Retirement Savings Scheme (MRSS)

Grant cap increases to $2,000 annually (up from $600).Age cap removed, benefiting up to 800,000 members annually.

Here’s a table summarizing the changes in the Matched Retirement Savings Scheme (MRSS) before and after the enhancements in 2025:

This change aims to provide more support to senior citizens in building up their retirement savings.

8. Workfare Income Supplement Scheme

Another change to watch out for is the Workfare Income Supplement (WIS) scheme, which will benefit about half a million lower-income workers. The qualifying income cap for WIS will increase from S$2,500 to S$3,000, and eligible workers can receive up to S$4,900 per year, compared to S$4,200 previously. This is a significant boost for those in lower-paying jobs, offering them greater financial assistance.

Qualifying Monthly Wage Cap:

9. Silver Support Scheme

Starting on January 1, 2025, Singaporeans eligible for the Silver Support Scheme will see their quarterly payouts increase by 20%. The qualifying threshold for household monthly income per person will also rise from S$1,800 to S$2,300. These adjustments are expected to provide increased support to senior citizens, particularly those in lower-income households.