More CPF Reading

Wages

Wages = remuneration in money due or given to an employee in respect of his employment Includes

• Overtime pay
• Allowances
• Cash rewards
• Commissions
• Bonuses

Classified as

• Ordinary Wages = wages due or granted wholly and exclusively in respect of an employee’s employment in that month and payable before the due date for payment of CPF contributions for that month. This includes allowances (e.g. food allowance or overtime payment).
• Additional Wages = not granted wholly and exclusively for the month
  • Annual bonus
  • Leave pay
  • Incentives
  • Other payments made at intervals of > 1 month

Total wages = (Ordinary wages + Additional wages) for that month

For my age, (assuming I’m non-pensionable) Contribution by employer = 16% of wage Contribution by employee = 20% of wage

Credited to ordinary account = 23% of wage Credited to special account = 6% of wage Credited to medisaveaccount = 7% of wage (23 + 6 + 7 = 36 = 16 + 20)

CPF for Education

Education Scheme is a loan scheme which allows members to use CPF savings from their OA to pay for children’s, spouse’s or own tuition fees.

Student has to repay the amount + interest, using cash, into the lender’s OA. This interest is the interest that the lender would have earned if the money had remained with CPF. Interest is calculated on monthly basis, compounded yearly. Rate is the CPF OA interest rate.

Repayment commences 1 year after student leaves the educational institution

Only full-time subsidized courses at approved local education institutions are included under this loan scheme.

This is limited by an Available Withdrawal Limit (AWL) for education in the CPF account.

Can use up to 40% of accumulated OA savings ( = OA balance + amt withdrawn for education + amt withdrawn for investment ) After 55, must first meet MS and MMS conditions before withdrawing money for education and investments