SINGAPORE: National Development Minister Khaw Boon Wan said disbursing benefits from the Pioneer Generation Package yearly instead of as a one-time payout is a more practical approach.
It will give seniors greater assurance that they will have benefits for life, while those who miss out will not feel its effect so drastically.
The government has set aside S$8 billion for its new Pioneer Generation Fund.
With accumulated interest over time, this will cover the expected cost of the Pioneer Generation Package – which is slightly over S$9 billion.
450,000 Singaporeans aged 65 and above are expected to benefit from this.
Mr Khaw noted that this means each eligible senior will receive about S$20,000 over time.
He said: “If you give it as a lump sum, then between a pioneer and a non-pioneer, the effect is seemingly drastic. So I think by spacing it out, it reduces this “cliff effect” but also gives greater assurance in a way that you know that it is for life.
“Because if I give you a big ‘hong bao’, I also have to worry… will you handle the ‘hong bao’ properly or not? What if you go and spend it all?”
Mr Khaw also agreed with the package’s focus on healthcare — as that has been the top concern among seniors.
He said healthcare is already affordable, with schemes like Medisave, MediShield and Medifund.
But he noted that medical cost may be an issue for those who are not covered by MediShield or for pioneers who did not have Medisave when they first started working.
Mr Khaw said seniors can be more assured with the Pioneer Generation Package.
They will receive additional subsidies for outpatient bills, annual Medisave top-ups and lifelong subsidies for MediShield Life premiums.
Mr Khaw said: “So in this Budget, where there’s greater subsidy for healthcare, on top of that (there’s) the Pioneer (Generation) Package for the pioneers, we have definitively debunked this comment that healthcare is not affordable.”
He said that choosing to set aside money now to pay for the Pioneer Generation Package is also a responsible move.
He said it will allay concerns by seniors that their benefits may be lost should the economy take a turn for the worst, or if there is an issue with government financing in the future.
It will also put to rest worries by the younger generation of taxpayers of having to bear the cost of the package with higher taxation.
In wrapping up the dialogue on Sunday, Mr Khaw also noted that this year’s budget is not an isolated effort.
He said the government has been making the effort since 2010 to push Singapore up the quality growth ladder as well as provide more support for the vulnerable.
Mr Khaw said going forward, there will still be challenges Singapore has to address — like the country’s low birth rate.
Yearly benefits more practical for Pioneer Generation Package: Khaw Boon Wan
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