Earlier on this year, I was proud to cross a mini CPF milestone when my MediSave (‘MA’) finally reached the Basic Healthcare Sum (‘BHS’). As I continue to stay gainfully employed, subsequent mandatory contributions meant to be funnelled towards MA were automatically deposited into the Special Account (‘SA’) instead. Achieving this mini CPF milestone also means that I can no longer depend on using cash to top up my CPF MA for tax relief, or except when deductions to the MA occur. Such an opportunity did arise when a CareShield Life premium deduction from my MediSave allowed me to top up CPF MediSave for tax relief.
CareShield Life Premium Deduction
In all honesty, I was only alerted to a deduction of CareShield Life’s premium from my CPF MA when I chanced upon a member’s notification in Seedly’s Facebook Channel. As shown in Diagram 1, he gave a gentle reminder for those who have reached their BHS limit to seize the narrow window to quickly perform a cash top up to their CPF MA.
Diagram 1: A gentle reminder from a member of the Seedly Facebook channel
I wasted no time and did a cash top up to my CPF MA. Although the amount was small, every cent count in building up my retirement nest egg as well as reducing my tax expense. His reminder was very helpful indeed which once again illustrated the benefits of the community.
How To Top Up CPF MediSave
Here is a step-by-step guide on how to perform a cash top up to your CPF MA.
- After you have logged in to my cpf Online Services, go to ‘My Requests’
- Under ‘Building Up My/My Recipient’s CPF Savings’, look for ‘Contribute to my MediSave Account via PayNow QR or eNETS’ under the Using Cash category as shown in Diagram 2.
Diagram 2: Contribute to my MediSave Account via PayNow QR or eNETS
- Pay as a member and choose the payment for ‘Contribute to my MediSave (Tax deductible)’ option.
Diagram 3: Contribute to my Medisave (Tax deductible) for a CPF Member
- After you have agreed to the terms and conditions, you can key in your contact number and the amount that you wish to top up. Just to be sure, you can also ‘Check Allowable Contribution’ to find out exactly how much you can contribute to your MA. For my case, it was exactly the amount deducted to pay for my CareShield Life premium.
- At the payment page, I would encourage you to pay with PayNow QR code. If you are a GooglePay user, you can even earn some bonus cashback in the process! I cannot believe that Google is still literally giving money away today even though this campaign has been running for almost a year! Google really has bucketloads of money for their marketing promotions.
- Finally, you will receive a very quick confirmation via email on the successful cash top up to your MA. I went back to check my transaction history to confirm it once again.
Diagram 4: Heartland Boy’s transaction history – successful cash top up to MA
Before you proceed to perform a cash top-up to your CPF MA, please note that if you are expected to hit the CPF Annual Limit ($37,740), the cash top up amount will be refunded next year without any interest. Since your cash top up has been refunded, they will not count as tax relief as well. For those interested to learn more about tax relief associated with cash top up to MA, you can find out more in this article that I have written previously.
What Is CareShield Life
I realised that I have been referring to CareShield Life premium deduction without actually explaining the CareShield Life policy yet. I have already covered this topic in detail in this article and even compared its differences with a Disability Income insurance. To summarise, this is a compulsory long-term care insurance national scheme that provides basic financial support should Singaporeans become severely disabled. My view is that this is a good initiative and definitely an upgrade to its predecessor- the ElderShield.
Earlier this year, I tried to enrol my dad into ElderShield and purchase a Supplement plan at the same time. Unfortunately, as a result of a recent cataract surgery (duh!) and an overnight hospitalisation for abdominal pain, his application was rejected. The good news is that while we continue to wait out the 1-year waiting period, I will be helping him and my mum to enrol into CareShield Life. For my mum’s case, she will be switching from ElderShield to CareShield Life.
In recent news, the Ministry of Health (‘MOH’) announced that CareShield Life is ready for eligible Singapore Citizens and Permanent Residents born in 1970 or earlier to join from 6 November 2021. (Source: Ministry of Health) Since my parents are not severely disabled, I will encourage them to make a conscious decision to opt into CareShield Life. Unfortunately, they will be missing out on all the Participation Incentives and Additional Participation Incentives because they are not Singapore Citizens yet.
Using the online Premium Calculator, I ran a check of their respective premiums and they are certainly not cheap even after subsidies. As their child, I know that this will weigh heavily on their minds. However, I will provide the assurance that I stand ready to step in if they encounter any difficulty to pay for their respective CareShield Life premiums. One of the ways is to use my MediSave to service their CareShield Life premiums by visiting the Change Premium Payer e-service to complete the application. I feel that this is one of the least things that I should do so that they can eventually retire with lesser financial worries.
This article is published on 24 October 2021.
yes, every cent counts. if I am not wrong, you can top up at the beginning of the year when they increase the MA limit and when they deduct MA for your Medishield Life too.
Hi,
That’s right! Thanks for adding to the list.
Hi, can i check if my MA account has already reach the BHS limit but I have this narrow window in Oct due to deductions (in your above example), will the ongoing mandatory CPF contributions from employment e.g. for Oct 2021 will be allocated to the MA account and this will render my cash top-up to MA as excess and refunded back to me?
Hi,
MY understanding is that your mandatory CPF contributions from employment cannot go into your MA because it is already at the BHS limit (i.e. bucket is full). Whether your cash top up to MA eventually became an excess and be refunded depends on whether you exceed the CPF Annual Limit, something that you will only know in Jan 2022.
Di you purchase CareShield Life supplement? Which plan you will recommend?
Hi,
I did not purchase it myself. I already have an income disability insurance so I did not see the requirement to go for a supplement for severe disability insurance.
I recommend that you speak to a licensed financial advisor on your insurance needs, thanks.