4 years after I wrote concerning the CPF Matched Retirement Financial savings Scheme (MRSS), the coverage has undergone additional modifications that anybody trying to leverage it ought to be aware of.
Launched in January 2021, the MRSS was meant to assist senior Singaporeans who’ve but to hit the present Fundamental Retirement Sum (BRS) construct their CPF retirement financial savings for increased month-to-month payouts of their retirement years. It was initially introduced that MRSS would run for five years between 2021 – 2025, the place the federal government will match each greenback of money top-ups made to the Retirement Account (RA) of eligible members, as much as an annual cap of $600.
I excitedly wrote again then that leveraging this scheme was a no brainer for individuals who had been eager to:
- Stand up to $3,000 from the federal government (without cost) throughout this era, and
- Take pleasure in tax reliefs below the Retirement Sum Topping Up (RSTU) Scheme.
We’re now in 2025; since then, our authorities has made additional change to the coverage.
The excellent news: You will get even MORE cash now.
The (beforehand $600) annual cap has now been raised to $2,000 a yr, and the age cap of 70 years outdated has been eliminated.
This implies eligible seniors aged 55 years and above will now obtain a dollar-for-dollar matching grant of as much as this quantity for money top-ups made to their CPF Retirement Account. This has a lifetime restrict of $20,000 (or roughly 10 years should you high as much as the utmost every year).
Which means my father-in-law (who’s older than 70) is now eligible once more (yay!), and each side of our mother and father can profit from MRSS. In whole, that’s $8,000 per yr that we will get in free cash from the Singapore authorities by topping up their CPF-RA.
As my in-laws should not have substantial CPF financial savings throughout their self-employed years, we might be utilizing this scheme to maximise and get a further $2,000 for them yearly.
For the previous few years, I’ve been getting the additional $600 per yr from the federal government for 3 of my mother and father / in-laws whereas additionally concurrently decreasing my tax liabilities. However the authorities has quietly taken away the tax profit for MRSS top-ups this yr.
To any extent further, CPF money top-ups that appeal to matching grants below the MRSS is not going to be eligible for CPF Money Prime-up Reliefs from 12 months of Evaluation 2026 anymore (i.e. CPF money top-ups obtained from 1 January 2025).
This caught me abruptly, and if it wasn’t for the truth that I learn the IRAS/CPF web sites fairly typically in the middle of my work, I’d in all probability have continued residing below the (joyful) phantasm that I’m nonetheless having fun with the tax reliefs – till actuality hits me subsequent April when IRAS sends me my invoice.
In the identical vein, CPF money top-ups to eligible members’ MediSave Accounts that appeal to the Matched MediSave Scheme (MMSS) matching grant will not qualify for tax reliefs anymore from YA 2027, i.e. affecting all money top-ups constituted of 1 January 2026 onwards.
So sure, sadly this now means you’ll not be capable of take pleasure in twin advantages from MRSS monies. In different phrases, your tax invoice subsequent yr is not going to profit from the tax reliefs until you consciously make different strikes to scale back it.
What if I nonetheless need to take pleasure in each MRSS and a decrease tax invoice?
The exempted sum is on the quantity that’s being given the dollar-to-dollar matching, which at present sits at a most of $2,000 a yr per eligible senior.
However, we people can nonetheless take pleasure in tax reliefs of as much as $16,000 (most $8,000 for self and most $8,000 for members of the family) a yr for eligible CPF money top-ups – so long as the quantity doesn’t appeal to MRSS and/or MMSS grants.
In different phrases, to proceed having fun with each advantages, you will want to contemplate whether or not you would possibly need to high up more money.
Not everybody could must high as much as the utmost of $8,000×2 per yr, because it in the end will depend on the place you sit inside the prevailing revenue tax bracket and what different strikes you’ve deployed to scale back your subsequent yr’s tax invoice.
For example, let’s say you earned $80,000 this yr and have already chalked up $70,000 of tax reliefs by way of different means:
- $48k from the Working Mom Little one Aid (WMCR) profit (to your 3 youngsters who’re above 2 years outdated),
- + $9k Mother or father Aid to your aged dad,
- + $8k CPF money top-up (to your self),
- + $9k SRS top-up
Then on this case, the shortfall of $6,000 earlier than you max out the tax aid ceiling could be achieved by way of topping up your mother and father’ CPF-RA past the MRSS cap. You can high up $10k for each of your mother and father in whole, and after deducting the $2k per person who will get the dollar-for-dollar matching, the remaining $6k might be eligible for CPF money top-up aid below the
Evaluation your purpose: Is your precedence to maximise the federal government matching grant (MRSS/MMSS) or to maximise tax aid?
Your precise circumstances will decide whether or not you want to execute this transfer – and the way a lot it could possibly impression your tax invoice.
Finances Babe’s take
Though eradicating the tax aid profit for monies below the MRSS scheme is a large bummer, I can perceive the rationale as to why the federal government doesn’t need the twin advantages to proceed.
As for me, I’ll nonetheless be topping up all 4 of my mother and father CPF-RA accounts in order that they get the utmost MRSS profit from the federal government.
In any case, free cash…would possibly as effectively take.
With love,
Daybreak
