Why annual value is relevant

8 July 2013, Straits Times

Flat size not an accurate reflection of income

I AGREE with Mr Munir Shah ("Maid grant: Review use of property annual value as gauge"; June 26).

There are many retirees who worked very hard during their younger days so that they can own their dream home and ensure that they have a roof over their heads when they are no longer working.

Many are surviving on their savings and avoided the need to ask the Government for financial assistance.

I hope the Government will relook the decades-old method of granting subsidies or sharing national wealth according to the property annual value or the type of HDB flat a person lives in.

Recently, my relative went for a mammogram at a polyclinic with her friend. Her friend paid $2 but my relative paid $25.

Both are under the Community Health Assist Scheme (Chas). The friend held an Orange card and my relative held a Blue card. Holders of Orange cards have a household income higher than that of those with Blue cards.

The irony is that the person with the higher household income enjoyed a higher subsidy than the person with a lower household income.

I asked the Health Promotion Board about this and was told that the reason was because we lived in a five-room HDB flat whereas the friend lived in a four-room HDB flat. This is despite the fact that we earn less compared to the friend.

Giving more to people earning more, and less to people earning less, is definitely not the right way to go.

Using HDB flat type as a criterion for subsidy assessment is outdated as people today have different expectations and lifestyles compared to the older generation. Owning a smaller flat does not equate to a lower income.

I hope the relevant ministries and authorities will review this wealth assessment system and give more to the people earning less.

Lim Tong Wah

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Reply from MOH

24 July 2013, Straits Times

Why annual value is relevant

MR LIM Tong Wah suggested reviewing the practice of using the annual value of a person's home as a criterion in government subsidy and wealth-sharing schemes ("Flat size not an accurate reflection of income"; Forum Online, July 8).

We agree that government assistance should be targeted at those in greater need. This is why government assistance schemes, such as the Workfare Income Supplement and the GST Voucher, consider both a person's assessable income and the annual value of his home.

While this is not perfect, it provides us with a fair and objective basis to take a person's income and wealth into consideration.

Annual value is a relevant consideration, as among those who do not have income, citizens living in private condominiums, for instance, are generally better off than those living in smaller HDB flats.

For government assistance schemes, those living in five-room flats enjoy the same subsidy tier as those living in four-room flats.

Mr Lim shared the example of the cost of a mammogram at a polyclinic.

Government subsidies are provided to all polyclinic patients, which means they would need to pay only $50 for a mammogram. To encourage regular screening, the cost for women due for rescreening was further reduced through the sponsorship of the Khoo Teck Puat Foundation, a charitable organisation, with the level of sponsorship based on the annual value of their residences.

We recognise that there are those with unique circumstances who may not qualify for government assistance based on their home.

For those facing extenuating circumstances, the Government is prepared to exercise flexibility. They may also consider approaching the family service centre, citizens' consultative committee, community development council or social service office, which are better placed to assess their specific needs and provide the necessary help.

We thank Mr Lim for his feedback and assure him that the Government continually explores ways to refine the eligibility criteria of government subsidy and wealth-sharing schemes, so that help reaches those who need it most.

Lim Bee Khim (Ms)
Director, Corporate Communications
Ministry of Finance

Bey Mui Leng (Ms)
Director, Corporate Communications
Ministry of Health