The Big Read: Private-hire drivers face roadblocks as they seek way out of once-lucrative industry

The Big Read: Private-hire drivers face roadblocks as they seek way out of once-lucrative industry 
By KENNETH CHENG

Published 01 SEPTEMBER, 2018 UPDATED 02 SEPTEMBER, 2018

https://www.todayonline.com/big-read/big-read-private-hire-drivers-face-roadblocks-they-seek-way-out-once-lucrative-industry

SINGAPORE — Two years ago, Grab driver Muhammad Syahmi joined a ride-hailing industry brimming with rosy prospects.

Buoyed by generous incentives dished out by firms, drivers cashed in on the lucrative business, where earning a decent wage was a relative breeze. “It was… easy money (then),” Mr Syahmi, 25, told TODAY.

For many drivers like him, however, the tide has since turned: Dogged by meagre incentives and fares in recent months, those bolting for the exit have found themselves in a quandary, as they struggle to land jobs after years in the driver’s seat.

And they cannot say they had not been warned.

It was not too long ago that observers and experts cautioned that providing a private-hire car service could harm drivers’ job prospects. It did not add to their resumes and offered little in the way of skills-building, they had said.

But few were prepared to listen then, as ride-hailing firms such as Grab and Uber grew rapidly in Singapore after muscling into the point-to-point transport sector in 2013, and turning the industry on its head.

These fears are now being lived out by drivers, as some — seeking a way out for months — have been met with nothing but rejections.

Since Grab’s acquisition of Uber’s regional operations in March, Mr Syahmi has fired off no fewer than 50 job applications.

The polytechnic graduate, who has a diploma in outdoor and adventure learning, went after openings in areas ranging from customer service to hospital patient service.

He was called up for four interviews, but has yet to bag a job offer.

The soft-spoken young man cited a depleting wage, and concerns over advancement as the main reasons he is searching for greener pastures.

“At my age, I should be doing other jobs for stability and (better) prospects,” he said.

IN THE SAME BOAT

There are many existing or former private-hire car drivers in a similar predicament, including the thousands who recently left the industry following the new licensing regime.

In July, the Land Transport Authority (LTA) said nearly half of the private-hire car drivers — 20,900 out of 42,900 — who received a one-year concession to attend a course and pass a test to obtain their vocational licence failed or did not attempt the test. Those who received the licence numbered 22,000.

Drivers who applied for the Private Hire Car Driver’s Vocational Licence (PDVL) before July last year had to undergo the course and pass the test by June 30 this year to continue offering the service. The licence was introduced last year to ensure that drivers had the requisite skills to provide the service safely.

The Employment and Employability Institute (e2i), one of the test centres for the PDVL, has also been helping drivers without a licence find jobs.

Its spokesperson said drivers are still employable in other sectors, but noted that those who have provided chauffeured services for the past two or three years “may not be familiar with the current employment landscape or know how to go about seeking new employment”.

“As such, they will need time and effort to transit into full employment, and therefore, we are helping with these interventions,” the spokesperson added.

The institute did not provide figures for drivers who have approached it for such help, nor did it specify how many drivers had been matched to jobs.

INCOMES HIT, POOR ADVANCEMENT

In the wake of the Grab-Uber deal, many drivers cried foul as their incomes took a battering after Grab slashed its drivers’ incentives, which until then served as a considerable boost to their earnings.

Drivers were hit in the pocket, as they reported lower earnings even after investing longer hours on the road each day.

For Grab driver Edmund Chua, 60, driving for at least 10 hours a day now nets him up to S$2,000 monthly. By contrast, in 2015, drivers who hit the roads for less than eight daily could earn S$2,500 quite easily with incentives, he said.

As recently as last year, drivers could snag weekly incentives of at least S$500 for completing a certain number of trips. Grab has since cut these to S$150, drivers said.

Mr Chua, a former contract teacher in secondary schools, said he plans to return to adjunct teaching, “in case I cannot drive anymore because I can be tired”.

“If private-hire drivers lose their jobs, they need to have a plan B. I don’t think this will be sustainable as a profession,” said the father of two daughters aged 13 and 15.

But the anxieties faced by drivers go beyond plummeting incomes. The lack of career prospects also weighs on the minds of some.

“When you drive for too long, maybe people think that you only can drive and you don’t have a lot of skills,” said Mr Syahmi, whose flurry of job applications were sent via various online portals, including Monster and JobStreet.

Nevertheless, he said driving has taught him soft skills, such as controlling his emotions when dealing with irate or demanding passengers. “We tend to be more patient or calm… skills that are quite important if we want to work in the customer-service line,” said Mr Syahmi, who added that he would leave straight away if a job offer lands.

Another driver, who wanted to be known only as Mr Sim, 38, stopped driving for Grab in June. His “long-term prospects” were the main consideration, he said, so he jumped at an opportunity in logistics operations when it emerged.

“Based on my age, I feel that driving can be something (I could do) towards retirement. It’s not a job I look forward to doing till the end of (my) days,” Mr Sim said.

The prospects for drivers, he added, were not as good as before and the dearth of benefits — such as contributions to the Central Provident Fund savings scheme — was a drawback.

For others, like Ms Vanessa Tiffany, 43, driving is not their only source of income. Apart from running a children’s events company, she is a relief teacher at a playgroup.

She cautioned drivers against relying on full-time driving as their rice bowl. “You’re not (going to) get anything. (You’ve to spend) 18 hours on the road every day to get S$4,000-plus (each month). In the end, you’ll fall sick,” the mother of three said.

Asked how the company was dealing with drivers’ concerns over reduced incentives and earnings, Grab Singapore head of transport Andrew Chan said its focus was to keep its drivers’ operating costs low, and to support them and their families.

Mr Chan noted that Grab was expanding its Better 365 programme, which improves drivers’ experience and welfare.

Apart from fuel discounts and free personal accident insurance coverage, Grab recently introduced a three-day rental subsidy for top drivers when they take time off from driving, said Mr Chan.

Other initiatives include discounts for medical services for drivers and their families, and education bursaries for their children.

“While the freelance nature of the gig economy often results in higher turnover rates than other industries, we continue to find more ways and opportunities to maximise our driver-partners’ earnings through better technology, more ancillary revenue streams through GrabAds, and Better 365,” Mr Chan said. “This model is more sustainable and improves overall income in the long run for our driver-partners.”

TODAY understands that Grab also has a partnership with government agency SkillsFuture Singapore (SSG), under which workshops are conducted to help drivers identify their skills-upgrading needs and how they can better tap the resources available. There is also a set of training courses curated for drivers.

Meanwhile, home-grown ride-hailing service Ryde said its drivers’ earnings have been “healthy”. They earn an average full-time income of S$5,500 monthly, after deducting commission fees, its spokesperson said.

Ryde takes a 10 per cent cut from its private-hire car drivers, lower than the 20 per cent commission Grab levies on its drivers.

ALTERNATIVES: FOOD DELIVERY, CHAUFFEURING VISITORS

While many drivers are looking to get out of the ride-hailing industry, some have found other ways to make ends meet.

These include taking on bookings from tourists — mostly from China — and chauffeuring them to and from the airport as well as between major tourist sites.

Others have switched to become delivery-partners under Grab’s food-delivery service GrabFood, for example.

Mr Ong Boon Piew, 56, who has failed at least 10 attempts at the PDVL test, said he was left with no choice but to become a GrabFood delivery-partner.

Armed with a motorcyclist’s licence, Mr Ong bought a motorcycle of more than 10 years old from a friend in July for about S$3,000.

The former lorry crane driver said food delivery was less stressful than driving a private-hire car, as he did not have to pay rental.

Right now, he clocks between eight and 10 hours a day, receiving about two assignments every hour. On good months, he can earn more than S$3,000.

He acknowledged, however, that he could earn more as a private-hire car driver, although this entailed clocking longer hours on the road.

Mr Ong said he will reapply for a Taxi Driver’s Vocational Licence, which allows licensees to drive both taxis and private-hire cars. But for the moment, he said in Mandarin: “I have no choice. Without the option of (private-hire car driving), I’ve to find another job as a substitute.”

GrabFood crew can deliver food on bicycles, motorcycles, personal mobility devices including electric scooters, and even on foot. Those who wish to use cars must ensure that they are not using a private-hire chauffeured motor car or station wagon, Grab said.

Under the LTA’s regulations, taxis and private-hire cars are meant to carry passengers for hire and reward, and cannot be used for the conveyance of goods for reward. Drivers accepting such jobs may have their vocational licences revoked, said an LTA spokesperson.

The spokesperson added that owners who use their private vehicles to carry out a business for the transportation of goods must ensure that their vehicles have appropriate insurance cover for such additional uses.

Grab’s spokesperson told TODAY last month that it has helped the majority of its drivers who did not obtain their PDVL by June 30 and were keen to explore other career options. This included converting them to GrabFood delivery-partners and referring them to e2i.

“For those who wish to retake their PDVL, Grab continues to support these drivers with their reapplication process and provides free revision classes to help them better prepare for the exams,” added the spokesperson.

Meanwhile, drivers such as Mr Chris Koh, 51, are devoting the bulk of their time to fulfilling bookings from tourists largely from China. For them, Grab rides have been relegated to a secondary source of income.

These drivers shuttle tourists between the airport and their hotels, or to tourist attractions, such as the Merlion, Gardens by the Bay and the National Gallery Singapore.

Linking up with riders via China-based applications such as Hi Guides and Yun Di Jie, drivers said that at peak travel seasons, such as during China’s recent summer school holidays, they earned nearly twice as much as what they drew from Grab rides.

Prices are fixed by the apps, where users can choose from a range of car types, said Mr Koh, who began taking on these bookings about a year ago and knows of 80 to 100 drivers doing the same.

Drivers in five-seat cars earn S$30 to S$35 for a journey from the airport to downtown Singapore, compared with about half (S$18) on Grab, before deducting commission fees, he said.

Mr Koh has cut down on Grab bookings significantly, doing just 20 rides a week now, compared with 80 to 120 trips previously.

He also gets more satisfaction from interacting with the tourists. “We get to know people from overseas, mainly… from different parts of China. We’re like ambassadors (of Singapore) as well,” he said.

Mr Koh said it was “optional” for drivers to show their guests around the attractions and they do not get paid for this, recognising that tourist guides must hold a licence granted by the authorities.

Another driver, who wanted to be known only as Mr Lim, 50, said he gets at least four such chauffeured bookings daily, including airport transfers and trips to take in the sights. He also takes on limousine services for business guests. Apart from China, his customers are from Korea, Japan, Russia, the United States and the Middle East, among other places.

Ms Ong Ling Lee, the Singapore Tourism Board’s director of travel agents and tourist guides, told TODAY that the agency monitors such practices and has contacted some platforms to tell them about Singapore’s legislation on guiding services, where necessary.

Ferrying tourists does not constitute guiding, said Ms Ong, but she added that individuals must hold a valid tourist-guide licence if they provide guiding services to one or more tourists for remuneration.

Mr Koh said that in the longer run, he was mulling over taking up a tourist-guide licence. However, juggling the course, which lasts about half a year, with his driving commitments would be cumbersome, he said.

HELP AVAILABLE

Members of Parliament (MPs) from the labour movement urged drivers to gain new skills even while on the job, so as to prepare themselves for other jobs should the need arise.

Mr Desmond Choo, an assistant secretary-general with the National Trades Union Congress, acknowledged that re-skilling and re-training can be difficult at times for many of these drivers, especially those who are older.

But he urged them to seek help from the National Private Hire Vehicles Association (NPHVA), which can work with organisations such as e2i to help workers gain new skills under the Government’s Adapt and Grow employment-support initiative.

For instance, the Place-and-Train Professional Conversion Programmes, where workers are hired by employers and trained to take on new jobs, will allow drivers to make the transition, said Mr Choo, an MP for Tampines Group Representation Constituency (GRC).

“This process will take some time, so it’s important that the workers have to start this journey earlier,” he added.

Mr Choo said that through the relevant agencies, drivers can also be matched to industries for which they have more “transferable skills”, such as the automotive sector as driving instructors or the public transport industry as bus drivers.

It is also key for younger drivers to avail themselves of career-planning resources such as the NTUC’s Youth Career Network, which helps workers keep in step with industry trends and skills in demand.

“With better career planning, they are able to see other career opportunities rather than just driving for Grab.”

There was also a need to help drivers gain transferable skills, said Mr Choo. In this regard, modular, bite-sized training — conducted online, for instance — that could count towards a diploma or certificate will become increasingly important.

“While they may not be able to go to classes full-time, they can learn during their free time and then (attend) a few days of classes and… over a certain period of time, they can get a certificate,” he said. “This must be the new direction.”

Besides help from e2i and government agencies SSG and Workforce Singapore, Mr Ang Hin Kee, executive adviser to the NPHVA and the National Taxi Association, said that both associations have asked and will continue to call on the LTA to allow private-hire car and taxi drivers to be allowed to deliver parcels, in order to “monetise their time”.

At TransportSG, a division of e2i, drivers are coached on job opportunities and the employment landscape. Employability coaches can also guide them to pick up new skills.

e2i’s spokesperson said drivers stand a much higher chance of landing a job through job matching or career fairs if they are “job-ready”. In July, the institute had 14 employers engage drivers who were seeking other driving-related positions, for instance.

It also designed a new Career Trial-cum-Place and Train Programme to help drivers without the PDVL find jobs. Under the Career Trial, drivers will be placed for a month with employers, who are encouraged to recruit them as full-time staff members at the end of the stint with a wage support scheme.

The programme is not confined to certain industries or job types, although driving-related positions are among the options. “We will assess the applicants’ transferable skill sets and work with them to match job positions according to their best fit,” said the e2i spokesperson.

Mr Choo said the gig economy is a permanent and growing part of the workforce not just in Singapore but globally, as app-based work becomes more common.

“It’s not a bad thing… because it does allow people to transit to industries to find new sources of income more flexibly,” he added, though concerns remain over how to better protect such self-employed workers and ensure their long-term financial security.

Agreeing, Mr Ang reiterated that disruptive technologies will create new job opportunities for workers, but also disrupt existing ones. “As a global phenomenon, we are better off finding a way to manage it than to reject it,” said the MP for Ang Mo Kio GRC.

As for Mr Syahmi, he recognises the benefits of picking up new skills as he looks for a new job. “We’re quite used to being our own boss… (but) we can’t be drivers for our whole life,” he said.

He is thinking of learning another language, such as Mandarin, which will come in handy for jobs in customer service, for example.

However, he will not be approaching e2i for help for now, as he will like to secure a job on his own. “I just want to discover where I should go myself,” he said.

Saving $1m through CPF

Saving $1m through CPF http://str.sg/4p5U

PUBLISHED

SEP 4, 2016, 5:00 AM SGT

Losing around $100,000 of hard-earned savings when the share market crashed in the 1998 Asian financial crisis prompted Singtel employee Loo Cheng Chuan to devise a safer way to build a nest egg.

Mr Loo, 44, went about creating a low-risk line of defence by using the Central Provident Fund (CPF), particularly the Special Account, as his investment vehicle.

"It's simply creating a financial safety net by topping up your Special and Medisave Accounts at a young age, as young as possible, and just letting it compound over a long period of time to over half a million dollars," he says. "Combine that with your spouse, you will reach a million dollars at age 65."

Mr Loo explained his "1m65" strategy in a video clip that was shown during the CPF Retirement Planning roadshow at Suntec City on Aug 27.

Mr Loo, who works in the digital business department at Singtel, noted in the clip that he realised that all the instruments offered by the CPF are risk-free and guaranteed by the Government. Even creditors will not be able to touch your nest egg.

Armed with this knowledge, he started topping up his Special and Medisave Accounts from age 30.

He had already bought a four-room flat in Punggol and used some of his Ordinary Account savings to pay the mortgage. Still, he tried his best to transfer the surplus in his Ordinary Account to his Special Account as often as he could.

"In our early 30s, my wife and I worked very hard and we were very thrifty in managing some of our CPF expenses and that led to a full accumulation of our Special and Medisave Accounts," he recalls.

By the time Mr Loo was 34, he had hit the cap of around $120,000 on both accounts.

Assuming the interest rate remains at 4 per cent, his savings and those of his wife in these two accounts could compound to almost $1 million by the time they reach 65, even if they choose to stop working a few years after they turn 34 and contributions to these accounts cease. And if they continue working until retirement, the combined amount would be much higher than $1 million.

However, Mr Loo admits that his strategy is not without downsides.

"It requires you to take money from the Ordinary Account to quickly top up your Special Account - which means you cannot be buying big houses and big condos. And, of course, as an ordinary Singaporean, I aspire to these things. But between looking rich and being rich, I prefer to be rich."

In addition, once you put money into the Special Account, you cannot withdraw it for housing purchases, as it is meant for retirement. This poses some risk and discomfort to people.

The comfort and the peace of mind that he would have $1 million waiting for him in his golden years is so great that Mr Loo has started sharing his experience with his church groups and friends.

"I realise that for a family, a safety net of $1 million is a wonderful sum of money. It brings a lot of security in my life and because of that, my whole life changed, my risk profile changed. I can be a bit more aggressive in some aspects of my life because I have this safety net," he says.

His wife, Madam Lee Bee Yee, 44, is in the personal shopper trade. They have three children, aged 15, 13 and 12.

WHAT A FINANCIAL EXPERT SAYS

Promiseland financial adviser Wilfred Ling says Mr Loo's method of using his CPF to accumulate $1 million is viable.

In fact, he worked out that it is possible for a CPF member to accumulate $1 million before the age of 57 by starting to top up the Special Account from age 25.

He based his calculations on a few assumptions, including a gross monthly income of $2,500, a one-month bonus and a 5 per cent yearly increase in the member's salary. Other assumptions are that the member transfers all his Ordinary Account savings to the Special Account. This means he would have no CPF savings available for housing loans.

Mr Ling also assumed that the CPF rules and interest rates will remain unchanged. "Individuals who wish to lock in their money in CPF for the long term will need to balance the long-term gain of having a large balance in their CPF when they retire, with their short-term needs, such as children's education and general expenses."

He added that this method is particularly useful for people in business as CPF money is protected from creditors.

"I have advised a number of my clients, who are businessmen, to accumulate as much CPF as possible so that in the event of bankruptcy, their retirement nest eggs remain unaffected," Mr Ling said.

A version of this article appeared in the print edition of The Sunday Times on September 04, 2016, with the headline 'Saving $1m through CPF'.

6 little-known facts about the CPF

6 little-known facts about the CPF http://str.sg/4p53

PUBLISHED

SEP 4, 2016, 5:00 AM SGT

With the Central Provident Fund (CPF) enhancements making headlines in recent months, more CPF members are waking up to the fact that there is a viable investment tool in their backyard.

The low-yield environment makes even the Ordinary Account rate of 2.5 per cent appear attractive, not to mention the Retirement Account (for those above 55), which attracts up to 6 per cent interest.

The chatter these days seem to be skewed towards how people can put more into CPF to grow their nest egg, rather than withdrawing.

To recap, the first slew of recommendations by the CPF Advisory Panel was announced early last year. They involve different payout options and the flexibility of deferring payouts up to age 70 so as to receive more cash later. Last month, the last few recommendations, which include a CPF Life escalating payout option, were announced.

Despite the CPF Board's publicity campaign and articles written about the changes, some still find the CPF schemes complex and difficult to understand, judging from queries to The Sunday Times, as well as those posed during the question-and-answer session at the CPF Retirement Planning roadshow on Aug 27.

Here are six little-known facts about the CPF:

1. TOPPING UP YOUR CHILDREN'S CPF ACCOUNTS

Every Singaporean newborn today has a CPF account set up for him or her by the Government for the purpose of receiving the $4,000 Medisave grant.

For children who are Singapore citizens or permanent residents, a CPF account will be automatically created when a first top-up or CPF contribution is received.

Some wealthier CPF members or those with excess cash have opted to use the CPF as a legacy for their children or grandchildren by topping up their Special Accounts the moment they are born.

In fact, you can contribute up to the prevailing Full Retirement Sum (FRS) of $161,000 into the newborn's Special Account in one go, under the Retirement Sum Topping-Up Scheme.

Some members have already done so.

Imagine the power of compounding over 55 years.

Assuming the Special Account's floor interest rate remains at 4 per cent, your initial contributions would compound to some $1.5 million over the next 55 years.

Another way of topping up your children's CPF accounts is to use the Voluntary Contribution Scheme, currently capped at $37,740 a year.

Contributions can be made to the Medisave Account only (up to the Basic Healthcare Sum) or can be split among the Ordinary, Special and Medisave accounts.

However, bear in mind that unlike cash top-ups to other loved ones like spouses, parents and siblings, you do not receive any tax benefit for topping up your child or grandchild's CPF accounts.

Of course, not everyone will be comfortable with locking up funds for 55 years.

Some financial experts recommend that it would be better to invest the same amount in equities and low-cost index funds - given the very long investment horizon that a young child has - which should reap potentially higher returns.

2. CPF AS A FIXED DEPOSIT OR FIXED INCOME ALTERNATIVE

Some CPF members have taken to actively transferring their Ordinary Account savings to the Special Account to earn the higher interest rates.

But if your Special Account balance - including savings withdrawn under the CPF Investment Scheme - has reached the prevailing FRS, you would be unable to do further top-ups.

In the chase for yields, even the Ordinary Account interest rate of 2.5 per cent a year is not to be sniffed at, particularly if you are comparing it with fixed deposit rates which have fallen to paltry levels. Even the average annual returns of some bonds, such as the Singapore Savings Bonds, have dipped below 2 per cent.

Some insurance policies with guaranteed returns and a fixed tenure - usually three to five years - also pale in comparison with the Ordinary Account interest rate.

If you are below 55 and are confident of setting aside the requisite retirement sums at 55, you can consider the Ordinary Account as an alternative fixed deposit instrument but with less liquidity. Because of the lack of liquidity, this works better for those who are close to 55 and/or are confident they have no need for the cash.

For example, if you are 53 years old, you can park your spare cash savings in the Ordinary Account and consider it as a two-year fixed deposit. This is because if you are able to set aside sufficient savings in your Retirement Account, you can withdraw the rest at age 55 or later, whenever the need arises.

And you can still use the Ordinary Account savings for other investments under the CPF Investment Scheme and to purchase properties, after setting aside $20,000 in your Ordinary Account.

3. CASH REFUNDS FOR CPF SAVINGS USED FOR PROPERTY PURCHASES

One way of putting cash into your Ordinary Account is to do so via a full or partial refund of the CPF savings that you had previously withdrawn for property purchases plus the interest accrued on them.

Some members wrongly believed that they could refund the CPF savings used for their properties only upon the sale of these properties.

Even if the properties are unsold, you can make cash refunds by filling out a CPF form and indicating which property you are making the refund for. However, you should note that such cash refunds are irrevocable.

4. ZERO ORDINARY ACCOUNT BALANCE

Some members wanted to know if it is possible to deplete the Ordinary Account to zero when transferring CPF savings from that account to the Special Account, and still earn the higher interest rates.

This question was raised during the CPF Retirement Planning roadshow. Mr Soh Chin Heng, deputy chief executive officer (services) of the CPF Board, responded that it is possible.

For members below 55, when the Ordinary Account has zero balance, the first $60,000 in the Special Account savings will attract 5 per cent while the remaining balance will enjoy 4 per cent interest.

5. CPF WITHDRAWALS

For members who are 55 and older, have the requisite retirement sums in their Retirement Account, and still have balances in both the Ordinary and Special Accounts, withdrawals will be made from the Special Account first before the Ordinary Account.

CPF said that this is because CPF members may still have commitments such as housing, education and investment after turning 55.

The board says: "As Ordinary Account savings can be used for continued participation in schemes after 55, the withdrawal sequence is catered to the needs of the majority of Singaporeans. Nonetheless, members who wish to benefit from CPF attractive interest rates have the option to top up their Retirement Account under the Retirement Sum Topping-Up Scheme."

6. FREQUENCY OF CPF WITHDRAWALS CPF

Members are not restricted to only one withdrawal a year. Members who have withdrawable balances in their CPF accounts may submit an application any time and the Board will assess the application.

The amount of money that the member may withdraw will still be based on the applicable withdrawal rules and it does not change the amount of savings that can be withdrawn by the member.

A version of this article appeared in the print edition of The Sunday Times on September 04, 2016, with the headline '6 Little- known facts about the CPF'.

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With reference to Point 3 on CASH REFUNDS FOR CPF SAVINGS USED FOR PROPERTY PURCHASES, here is more information extracted from financialfreedomgal https://financialfreedomgal.wordpress.com/2016/08/29/cash-refund-of-cpf-savings-used-for-property/

Cash refund of CPF savings used for property

Posted by SKO on AUGUST 29, 2016

When I bought my flat with my spouse, I had utilised a small sum from my CPF Ordinary Account (OA), and to my horror, I have already incurred about $2k in interest. Not happy about this (although it is really my own money).

I wrote to CPF if I could return the principle amount in part of in full,  or in full with the interest incurred, without selling the flat. The reply is positive.

I could repay the principle amount in full OR in part, including the interest incurred.

My only concern was that my Home Protection Scheme would be terminated after I repaid my OA amount. I was assured that it would not.

Hence, I shall proactively return this sum to my OA soon. I was told to use this form to process the refund. Cashier’s order or cheque should be made payable to ‘Central Provident Fund Board’. Name, NRIC, and property address should be indicated on the reverse side of cashier’s order or cheque. The completed form and cheque should be mailed to:

Central Provident Fund Board
Public Housing Section – Bank Loan
238B Thomson Road #08-00 Tower B Novena Square
Singapore 307685

Refund will be credited to my CPF account within 5 working days from receipt of cheque.

The main reason for doing this is that although the sum used for property is not big, the compounded interest is getting higher everyday and I do not want to be the one ‘earning’ this interest. I rather someone pays me the interest.

Before we go and use our cash to invest in risky assets, this might be a better way to use our money.






________________________________________________________________

With reference to Point 3 on CASH REFUNDS FOR CPF SAVINGS USED FOR PROPERTY PURCHASES, here is more information extracted from CPF Board website: https://www.cpf.gov.sg/members/faq/schemes/housing/private-properties-scheme#faq16644

Q	I am not selling my property. Can I make voluntary refund on the housing amount withdrawn? If yes, how do I go about doing it?

A

Yes. You can refund the following amount via a cheque/cashier's order to the Board: a) Full principal amount b) Partial principal amount c) Full principal amount and full accrued interest d) Full accrued interest (You can only refund the accrued interest after you have refunded the full principal amount.) Please complete the Form HSD/VR and prepare a cheque/cashier's order made payable to "CPF Board". On the reverse side of the cheque/cashier's order, please write your name, CPF Account No. and the property address. Mail both the form and the cheque/cashier's order, before 20th of the month if you wish to earn interest on the refunded amount from the following month, to: Central Provident Fund Board Housing Schemes Department  238B Thomson Road #08-00 Tower B Novena Square Singapore 307685 Alternatively, you can deposit the cheque/cashier's order and this form at any CPF service centres. The refund will be credited to your CPF account(s) within five working days from the receipt of your cheque/cashier's order (subject to cheque/cashier's order clearance). If you wish to use your CPF savings to service the outstanding housing loan after making full cash refund, you will need to submit a fresh application, "Application to Use CPF Savings to Purchase Residential Property" to the Board through your lawyers. You will incur legal costs in the process as we need to lodge a new CPF charge on the Property to secure the refund of new CPF savings used for the Property before we allow your CPF savings to be withdrawn for the Property.

Picking suitable IP amid wider choices

Picking suitable IP amid wider choices http://str.sg/ZvBn

Source: The Sunday Times
3 April 2016

The entry of AXA Life Insurance Singapore into the private Integrated Shield Plan (IP) market has widened the scope for consumers - and made it that little bit harder to make your choice.

AXA will offer three IPs from next month, bringing the total to 22, a daunting number when you start looking for a plan that suits you best. About two in three of 3.9 million Singaporeans and permanent residents here have IPs.

IPs are private hospitalisation and surgical plans comprising a basic MediShield component (known as MediShield Life since Nov 1) and an additional private insurance component. They are managed by six private insurers - AIA (HealthShield Gold Max), Aviva (MyShield), AXA (AXA Shield), Great Eastern (Supreme Health), NTUC Income (IncomeShield) and Prudential (PRUshield).

Generally, IPs provide higher protection, covering the B1/A wards of public hospitals and private hospitals. All six insurers will also offer a standard, no-frills IP pegged at public hospital B1 class from May 1.

Having more players raises competition and innovation but also increases the number of choices facing consumers. It can be a mind boggling exercise for an individual to sift through the different features of the Shield plans in the market.

The Sunday Times highlights some differentiating features of the IPs on offer.

AIA SINGAPORE

Females insured with AIA HealthShield Gold Max plans will have their biological babies covered (under the mother's policy) for congenital abnormalities from birth up to two years old, for up to $5,000 per child. The congenital abnormalities benefit is capped at $20,000 per policy.

Another key difference is that AIA offers extra coverage for 30 critical illnesses.

If the policyholder is diagnosed with any one of the 30 critical illnesses, he can enjoy an additional 100 days on top of the existing 100 days for the post-hospitalisation benefit.

OPT FOR AS-CHARGED FEATURE, SAYS EXPERT

There is also an additional claim limit of up to $100,000 per policy year in the event the insured person is diagnosed with a critical illness.

Furthermore, AIA policyholders can sign up to become AIA Vitality members. The wellness programme aims to keep members motivated to stay healthier with rewards such as cashback, discounts on gym membership, travel benefits and preferred rates for health screenings, says AIA chief marketing officer Ho Lee Yen.

AIA HealthShield Gold Max policyholders with the AIA Essential rider will also enjoy premium discounts when they become AIA Vitality members.

AVIVA SINGAPORE

Aviva is the only insurer offering moratorium underwriting, where no health declaration is required. It means that certain pre-existing conditions will be covered after an absence of symptoms, treatments or medication for five years from the time the policy is in force. As there is no underwriting done before inception of cover - which makes the process simpler - applicants obtain coverage sooner.

Mr Daniel Lum, Aviva's director of product and marketing, says conditions apply and not all pre-existing ailments are eligible, but this can be useful for those with less serious pre-existing conditions who want to obtain coverage. Some of the pre-existing conditions that are excluded are heart attack, heart bypass, hypertension, stroke, paralysis, osteoporosis, Aids, any form of cancer except skin cancer, autism, multiple sclerosis, dementia and Alzheimer's.

Other key points of difference of Aviva's MyShield plans include:

•Free child cover for up to 20 years old (age at next birthday) if both parents are covered under the two higher plan options, MyShield Plan 1 or 2.

•Cap on co-insurance to limit the out-of-pocket costs that policyholders have to bear, even if they do not have riders to cover the co-insurance component of their medical bills.

•Additional benefit for major illnesses such as heart attack, major cancer and stroke.

AXA LIFE INSURANCE SINGAPORE

The new kid on the block offers the longest post-hospitalisation cover among the IP insurers at 365 days.

This ensures customers are fully protected for a year upon hospital discharge because recovery from major illnesses such as cancer and stroke may take a long time, says AXA chief marketing officer Kwek-Perroy Li Choo.

Another unique feature is that its Shield Plan A - which covers hospitalisation in private hospitals - has the highest annual limit at $1 million. Its Plan B offers an annual limit of $550,000.

The insurer also offers a letter of guarantee (LOG) service in its plans A and B with the highest limit of $100,000 for private hospitals if customers are approved and referred through AXA's panel of medical specialists, and the highest limit of $15,000 for public hospitals. The LOG helps to waive the upfront deposit required by hospitals.

AXA offers a choice of three additional optional benefits/riders. The Basic Care rider covers the deductible and co-insurance components while the General Care rider includes a daily hospital cash incentive of up to $250 per day and covers ambulance or taxi charges to and from hospital as well as traditional Chinese medicine treatment after discharge. Its Home Care rider includes home nursing services and doctor home visits, post-hospitalisation, as well as costs of stay in an inpatient hospice care institution, subject to limits and conditions.

GREAT EASTERN LIFE (GE)

GE provides cover for 11 pregnancy and childbirth complications, the highest number in the industry. It is also the only insurer to cover pre-hospitalisation specialist's consultation for psychiatric treatment.

To complement its Supreme Health Shield plans, GE offers Total Health - a standalone plan - which provides the highest number of special benefits in the market - nine in total, including two interesting benefits.

One is reimbursement of charges incurred for medical treatment during confinement in an inpatient hospice care institution after hospital discharge, for up to 90 days per policy year. This includes round-the-clock support for terminally ill patients.

The other is the Home Health Care Benefit, which provides up to $100 per day and up to $5,000 per policy year for reimbursement of treatments and medical services provided at home within 30 days after discharge from hospital.

It covers professional fees, including visits made by doctors, qualified nurses and qualified physiotherapists. For example, long-term ailments such as dementia and injuries like fractures may require follow-up home treatment after discharge. This benefit allows the patient to recover at home.

GE chief product officer Lee Swee Kiang noted Ministry of Health data shows a 26 per cent rise from 2006 to 2014 for home care and palliative home care visits.

"To address the health insurance needs of a rapidly ageing population in Singapore, we included these two benefits so that our customers have a choice to receive care in the comfort of their home or in a hospice," he says.

PRUDENTIAL SINGAPORE

To offset inflation in medical costs, Prudential offers a unique "adjustment" feature for the limits customers can claim in a policy year. This is also known as policy year limits.

Ms Angela Hunter, its executive vice-president and chief marketing officer, says: "Medical costs are on the rise due largely to medical inflation and the advancement in medical treatment and technology.

"Given this, it is important that the policy year limit of health policies is pegged to the Consumer Price Index (CPI) to ensure that the level of coverage keeps pace with inflation and the policyholder continues to be sufficiently protected in the long term."

As such, the limits have edged up in recent years and are now at $632,700 for PRUshield A Premier and $379,700 for PRUshield A Plus.

Prudential also offers pre- and post-hospitalisation coverage of up to 180 days before or after hospital confinement or day surgery. This includes expenses incurred for general practitioner consultation resulting in a referral to a specialist as well as follow-up treatment and services like dressings and physiotherapy following hospital discharge.

NTUC INCOME

The Enhanced IncomeShield Preferred plan, which covers stays in private hospitals, is the only IP that provides a prosthesis benefit of up to $10,000 per policy year. This pays for the prosthesis the insured person needs if he has lost a limb or eye resulting from the injury or illness that led to hospitalisation.

Another differentiating feature is Income provides as-charged cover for people who intend to stay in B2 and C wards of public hospitals. Its Enhanced IncomeShield C plan caters to those with household income of less than $3,500 or who live in three-room or smaller HDB flats.

Mr Peter Tay, Income's chief operations officer, says: "This provides an option for lower-income people to own an as-charged plan at affordable premiums. Combined with a Plus rider (which covers the deductible and co-insurance components), the Enhanced IncomeShield C plan provides coverage from the first dollar, giving the insured greater peace of mind."

It is also the only IP provider to offer its insurance contracts in plain English to help policyholders better understand their policies and make informed decisions. The documents satisfy the "Crystal Mark" standard for offering simple, clear and concise information.

EXPERTS SAY

Mr Patrick Lim, associate director at financial advisory PromiseLand Independent, highlights the importance of a reasonably high annual policy limit.

"I would recommend that customers go for a higher annual policy limit, the higher the better, so as to cover big hospitalisation bills for extreme cases," he says.

AXA offers the highest policy annual limit at $1 million followed by Income's $700,000, for the two insurers' highest class IPs.

Mr Brandon Lam, DBS Bank's head of consumer insurance products, likes the as-charge feature. This is present in most IPs, except the new standard IP. An as-charged plan does away with caps on claims such as daily ward charges, surgical costs and so on.

"Pick an as-charge plan where possible so that you get reimbursed as charged and do not need to fork out additional amounts," he says.

Mr Fabian Ng, UOB's head of retail bancassurace, group retail, advises that to get the best value, you should look out for the deductible and co-insurance conditions in the hospitalisation policies.

"Individuals who are less likely to be hospitalised can consider plans with higher deductibles and more affordable monthly premiums. Conversely, those with chronic health problems can pay higher monthly premiums to reduce the payable deductible amounts," he notes.

Other considerations include affordability as premiums of such plans are expected to rise significantly with age. You should also gauge the appropriate level of cover you need.

Mr Lim cautioned people to have sufficient savings set aside for a rainy day. He has seen people who have had to scramble to raise cash when hospitals request payment on an interim basis. Insurers would typically only reimburse claims after the patient's discharge.