Thursday, October 13, 2011

Down And Out In Singapore And Other Countries

You've paid your taxes, your CPF contributions, completed your National Service obligations, yet you perennially worry about ending up like one of those who can't afford to retire. According to the latest CPF Life Report, about 60 per cent of Active CPF Members will have only $67,000 or less in 2013. That's less than the current CPF Minimum Sum of $131,000, money barely sufficient to tide you over the evening years.

Suppose you are old, single, and have no income or property.

In Australia you get an Age Pension after age 65 of A$689.00 per fortnight (approx S$1,700 per month).

A Pension Supplement of A$58.40 per fortnight to offset GST, Pharmaceutical, Telephone, Utilities expenses.

And a Pensioner Concession Card that entitles you to:
- reductions on property and water rates
- reductions on energy bills
- a telephone allowance
- reduced fares on public transport
- reductions on motor vehicle registration
- free rail journeys

In Canada you get the Canada Pension Plan (CPP) and The Old Age Security pension (or OAS or OAS-GIS).

 The Canada Pension Plan (CPP) is a contributory, earnings-related social insurance program. In 2011, the prescribed contribution rate is 4.95% of a salaried worker's gross employment income between $3,500 and $48,300, up to a maximum contribution of $2,217.60. The employer matches the employee contribution, effectively doubling the contributions of the employee. When the contributor reaches the normal retirement age of 65, the CPP provides regular pension benefit payments to the contributor, calculated as 25% of the average contributory maximum over the entire working life of a contributor.

The Old Age Security pension (or OAS or OAS-GIS) is a taxable monthly social security payment available to most Canadians 65 years of age or older. As of July, 2011, the basic amount is C$533.70 per month.

The Guaranteed Income Supplement (GIS) is for low income pensioners who earn little or no other income. The Old Age Security is supplemented by a Guaranteed Income Supplement (GIS), which is considered non-taxable income. As of July 2006, the maximum supplement for a single individual with no other source of income is C$597.53.

For a guy with no CPP, the OAS-GIS would pay out C$533.70 plus C$597.53 (approx S$1,300 per month).

Sets you thinking, doesn't it?

Of course it's all paid for by the taxpayers. In Australia only those earning above A$6,000 a month pay tax (starts at 15% rate), in Canada combined federal/provincial taxes kick in at 9.9% for the first C$20,000 (annual income). But comprehensive medicare is thrown in for free. Baby deliveries are F.O.C. at public hospitals in Australia. In Singapore, on top of income tax and the regressive GST, 36% is put away for CPF every month. Why are we still fearful of getting sick at old age?

The Ministry of Health is blowing a trumpet about its vision to "enable all Singaporeans to live well, live long and enjoy peace of mind." You may ask the Minister a simple question, "Where's the beef, Mr Gan?"


  1. The income tax rate for Australia is NOT tax free for the first $6,000/- per MONTH. The tax free threshold is first $6,000/- per year.

    Refer to the following link:

    The numbers stated is taxable income per YEAR. Please correct the mistake.

  2. The whole CPF scheme for retirement is broken. It is no longer a retirement account. It is a restricted "savings" account for housing first, medical second, and retirement last.

    In truth, Singaporeans are the ones subsidizing housing and healthcare through their own savings.

  3. the problem is that the personal income tax rates in racist down under & racist canada are at around 45%

  4. is financial slavery at work. by buying HDBs - which u dont have a choice not to unless u are born rich - all singaporeans are unknowingly helping to prop up the escalating public housing prices and the coffers of temasek and GIC. the scheme gained urgency after the huge losses by these sovereign wealth funds.

  5. Singapore was never built to follow these welfare countries. So comparision with down-under and Canada is essentially not correct. But having said that, Singapore did promise usto achieve Swiss stnadard, something that was said and forgotten.


    Aiyah, there's the REAL first-world country, and there's the FAKE first-world country. If you look at the 2011 Mercer Pension Index, Singapore is ranked 15th out of 16th (yep that's right, just one above poor India) when it comes to Adequacy for pension retirement, you know how pathetic singaporeans' Confidence in the Future is with this new President. Let alone everyday we're reminded of the stark reality by looking at our tissue sellers and table cleaners. The index has fallen compared to previous year in "Adequacy, Sustainability & Integrity". Keep coming up with all these convoluted schemes and top ups, in the end we're paying MORE while our SWF are enriching themselves to GIVE LESS back.

  7. Hi Tattler,

    I hope you would do a piece on the tax known as Medisave (MS)...

    A close relative of mine recently got her pay ($900 for 2 weeks work) but after deducting MS, her net take home income was just $600+. We don't mind so much if we can get back our MS $ one day and if MS is as good as any medical insurance policy out there but we PAY A LOT MORE & GET A LOT LESS compared to medical insurance.

    To call MS a raw deal would be a massive understatement! If MS is a savings scheme, at what age can we withdraw our savings? How about NEVER?

    MS is really a tax with a few miserable "medical insurance bones" thrown in. Tell me I am wrong!

  8. All along the pap government is fattening itself at the expense of citizens.

  9. U got that rite...

    PAP government is for PAP and its cronies only.

    It is not a Singapore gov't for singapore.

    It is really depressing to see this.

  10. Actually thanks to the low income tax offset we enjoy a tax free threshold of 16K/year.

    And overall tax rates are far lower than the nominal rates. 150K of household income is only taxed at 20%.

  11. @Anonymous October 13, 2011 11:38 AM

    Please stop propagating the falsehood that income tax rate in Australia is 45% flat!

    Income is taxed at:
    15% $6001 - 34000
    30% $34001 - 80000
    40% $80001 - 180000
    45% only sets in from annual income of $180,001