Hansard, Tuesday, 10 July 2018

1 Dr Intan Azura Mokhtar asked the Minister for Education (a) how many teachers are trained to teach special needs students in Crest Secondary School, Spectra Secondary School, Northlight School and Assumption Pathway School; and (b) how many allied educators are there in each of these schools to help these students in the classrooms.

Mr Speaker, Crest and Spectra Secondary Schools, Northlight School (NLS) and Assumption Pathway School (APS) tend to have more students with Special Education Needs (SEN). Their enrolment is smaller than other typical schools and they also receive a higher level of resourcing to support students, including those with SEN.

As a result, they have a better teacher to student ratio, and they use the additional funds to hire specialised manpower to support SEN students. Typically, each of them has about 10 such specialised staff who support students' additional needs. This is well above what is provided for in a typical secondary school.

All teachers in these four schools have gone through SEN awareness training and receive regular professional development in SEN knowledge and skills. About 15% of the teachers have a higher level of training, such as the Teachers Trained in Special Needs (TSN) course offered by the National Institute of Education.

Dr Intan Mokhtar.

Mr Speaker, I thank the Senior Parliamentary Secretary for the answers. But I did not quite catch what is the ratio of teachers who are trained in special needs education, teaching special needs students in the four specialised schools, compared to those in the mainstream schools. What are the numbers in terms of ratio?

Secondly, I must declare that I am on the board of the Institute of Technical Education (ITE) Governors and every year, at least once a year, the four specialised schools make a report to the Board. The recent update that we got was that out of these four schools, at least half of their last intake is made up of students who are diagnosed with special needs. That means that there is a greater demand for teachers who are trained in special needs education, on top of the other challenges that these students already face. I would like to urge the Ministry of Education (MOE) to look at giving more fundings for the schools in terms of deployment of teachers who are trained in special needs as well as funding for these schools to employ directly additional teachers or counsellors that they may need, to help such students.

Mr Speaker, I thank the Member for those questions. As I mentioned earlier, all teachers in these schools have gone through SEN awareness training. So, essentially, we understand that there is a big number of students with special needs in these schools. So, all the teachers go for that training. Beyond that, we also have selected teachers where they go for higher level training, which are the TSNs. On the point about more than 50% of the student intake at ITE being SEN students, this is something we are aware of and something that we hope that we will continue to improve on.

We also do reach out to various institutions that would take in our students in the needs level. We also work with them to see how the transition process can be smooth and what we are providing them. If you look at the typical school among these four schools, usually, we have MOE-seconded teachers who would go there. These are teachers who have gone through the higher level training, the TSN training. Beyond that, the four specialised schools also would have funds to employ their own teachers and para-educators who would have the special needs training as well. These schools also carry out their own inhouse training to see where within their specialised areas that they need to improve. This will help to cater to our students. Another support that these specialised schools have is the consultancy services and access to such services with MOE psychologists. Other aspects include smaller, modular training that they require and that we hope to provide.

I wish to assure the Member Dr Intan Mokhtar that we understand the landscape and we want to make sure we give the best to these four schools. Because at the end of the day, we just want to provide the best to our children, regardless of who they are.

2 Mr Liang Eng Hwa asked the Minister for Trade and Industry (a) whether the general cost of living in Singapore has increased significantly and is a cause for concern; and (b) what are the measures that the Government will take to address further cost increases and minimise their impact on the low- and middle-income households.

Mr Speaker, Sir, the Government understands and shares Singaporeans' concerns with cost of living issues. This is a multi-dimensional issue. Let me explain.

There are absolute measures of how the prices of a particular basket of goods and services change over time. There can also be relative and evolving interpretations of what constitutes an essential basket of goods and services for different groups of Singaporeans. Yet, cost of living pressures can also be an expression of the gap between one’s aspirations and one's anticipated means to fulfil them.

Different groups of Singaporeans have different concerns, needs and wants. Elderly Singaporeans, retirees and their families will be more concerned with healthcare affordability. Families with young children and infants may be more concerned about the prices of milk powder and educational programmes. Yet other families may be aspiring to buy their dream house or car.

As such, no single measure will express an individual's "cost of living" pressures fully, given the different needs and wants, the evolving aspirations and the potential gap between aspirations and anticipated means. Furthermore, we are also aware that some price items, while not the biggest in absolute impact, can have a disproportionate psychological impact on consumers. For example, water and transport fares fall into this category because they are items consumed daily. The "bunching" of price increases, like the increases in water and electricity prices this month, can also have a disproportionate psychological impact.

Mr Speaker, Sir, may I have your permission to distribute the first set of charts to Members of the House?

Yes, please. [Copies of Annex 1 were distributed to hon Members.]

Mr Speaker, Sir, our Consumer Price Indices capture the absolute price changes of different baskets of goods and services for different groups of Singaporeans.

Last year, the Consumer Price Index (CPI)-All Items inflation was +0.6%, lower than the average of +2.3% between 2007 and 2017. In fact, inflation over the past five years between 2012 and 2017, at an average of +0.6% a year, was significantly lower than the preceding five years between 2007 and 2012, which averaged +4%. If we consider the CPI-All Items less imputed rental, the figure was 1.7% for 2017.

The 2017 inflation figures for the various household income groups with their respective baskets of goods and services were -0.1% for the lowest 20%, +0.5% for the middle 60%, and +0.8% for the top 20%.

Beyond these numbers, I have also asked the Ministry of Trade and Industry to do a check on certain groups of households. Specifically, I asked them to look at the retiree households.

For retiree households, the figure last year was -0.4%. However, I asked them to strip out the imputed rental for owner-occupied accommodation from the CPI, because this will give an indication of the inflationary pressures that they might feel from the cash outlay. And inflation for retiree households was +2.1% last year, higher than the other household income groups.

We know that inflation is a concern for retirees with no active income from work. This is why the Government has focused much attention on help schemes for our seniors, starting with the Pioneer Generation Package. In addition to transport and healthcare subsidies for the elderly, we are also encouraged to see our social enterprises and businesses stepping up to help ease cost pressures on them by giving our seniors additional discounts.

We also monitor the inflation for key categories of goods and services, for example, food, healthcare and utilities, because they can have a big psychological impact on the daily lived experience of Singaporeans. In the graphs, Members will be able to see that the inflation rate was lower over the recent five-year period between 2012 and 2017 for all household types, as compared to the five-year period from 2007 to 2012. Inflation rates were also lower for the key components of food, healthcare, and utilities and fuel for these household types. However, we should note the sharp pick-up in inflation rate for utilities and fuel last year, and this was largely due to higher oil prices. Last year, the oil price went from $50-plus per barrel to $70-plus per barrel – a significant increase.

CPI-All Items inflation is expected to remain low this year, between +0.5% and 1%. However, rising global oil prices are projected to increase fuel costs and electricity prices. This, coupled with an increase in global food commodity prices, could impact domestic food prices. Consumer prices could also rise moderately alongside a faster pace of wage growth and pickup in domestic demand amidst improvements in the labour market. Accommodation costs are expected to continue to decline with a sustained fall in rentals, thereby dampening inflation.

Mr Speaker, Sir, let me move on to some other factors that influence prices. We closely monitor prices to ensure that Singapore remains an affordable home for Singaporeans. There are some factors not within our control. And there are other factors that we have to work hard to constantly manage.

As a small and open economy that imports most of our items, we are subject to global economic forces. Electricity and fuel costs which are influenced by global oil prices are one such example. The prices of certain products are also affected by our market size. Major companies determine their pricing strategies based on the purchasing power and relative bargaining power of different markets. The price of certain medicine is one such example.

To manage the various pressure points, we must adopt a multi-pronged strategy. Let me elaborate on our eight-pronged strategy. After this, I will distribute a set of infographics for Members to share with your residents.

First, we need to keep our economy competitive. At the macro level, the Government will aim to establish the conditions for companies to create good jobs with sustained income growth that outpaces inflation. Over the last five years, resident households’ income had risen faster than consumer price inflation. Median resident household income from work per member grew by 4.2% per annum in real terms between 2012 and 2017, while that for the lower income deciles rose between 4.2% and 4.6% per annum.

In the long run, real wage growth is determined by our ability to raise productivity. Schemes, such as the Productivity Solutions Grant, aim to help companies to do so. Other schemes like the Special Employment Credit support employment opportunities for low-income and older Singaporeans, while the Workfare Income Supplement (WIS) Scheme helps low-wage workers supplement their incomes and build up their retirement savings. We also need to constantly monitor the wages of workers in industries facing significant disruptions. The best way for us to help our workers facing low or stagnating wage growth is to equip them with new skills to take on new jobs ahead of time. This is where schemes like Adapt and Grow come in to help our workers.

Let me move on to the second strategy, that is, to carefully manage the strength of the Singapore dollar. We carefully manage our Reserves and the strength of our dollar to contain imported inflation. The Monetary Authority of Singapore's (MAS’) exchange rate-centred monetary policy, through a gradual appreciation of the trade-weighted Singapore dollar in line with the economy’s underlying fundamentals, helps to preserve our purchasing power.

Third, diversifying our sources of supply. We do so from food and water to fuel and raw materials for production to ensure that we are not held ransom by any single source. This bolsters the security and resilience of our resource supply chains, and avoid sharp price hikes when there are disruptions to our primary sources.

Fourth, promoting competition in our markets and lowering barriers to entry where possible, to allow Singaporeans to enjoy competitive prices for comparable products. For example, the Energy Market Authority of Singapore (EMA) has progressively opened up the electricity market to competition since 2001. In April this year, EMA commenced the soft launch of the Open Electricity Market in Jurong, allowing 108,000 households and 9,500 small businesses the option to buy electricity from a retailer with a price plan that best meets their needs. Consumer feedback so far has been positive, with thirteen electricity retailers offering a good range of competitively priced plans. I am happy to announce that EMA is working on extending the Open Electricity Market to the rest of Singapore from the later part of this year for all Singaporeans to enjoy the benefits of the open electricity market.

Another example is the market for mobile telecommunication services, where the Infocomm Media Development Authority's (IMDA’s) regulatory measures to facilitate greater competition in recent years have led to an increasingly vibrant and competitive mobile market. New mobile operators are offering competitive and innovative mobile plans, including plans that allow for unlimited data, or those that start from zero dollars.

Fifth, we must manage the cost of doing business in Singapore. We must continue to simplify our processes and reduce business costs to minimise the pass through of costs to consumers. To keep domestic sources of inflation contained, we will continue to carefully manage domestic supply-side constraints. For instance, the Government will ensure an adequate supply of residential, industrial and commercial space to relieve price and rental cost pressures as demand grows. We will also carefully monitor property market trends and take necessary actions to avoid sharp price changes that are not supported by market fundamentals.

As a general principle, we price services fairly to recover costs and discourage over-consumption. However, our Government agencies are also frequently reminded and are committed to keeping our costs under control to avoid imposing additional burden on businesses and consumers.

Various agencies are now using the price-quality model for tender evaluations to moderate the excesses of pure price competition. This can be seen in the case of new hawker centre tenders. Since 2012, the National Environment Agency (NEA) has removed reserve rental in the tender for stalls in hawker centres, and 52% of stalls are awarded at bids below reserve rental today. The National Environment Agency (NEA) has also announced that 20 new hawker centres with approximately 800 stalls will be built by 2027 and the managing agents appointed to run these new centres, some of which are social enterprises, will also be required to provide affordable food options in each of these hawker centres. Another example is the Early Childhood Development Agency’s (ECDA's) use of the Anchor Operator and Partner Operator Schemes to provide quality early childhood care and education at affordable prices.

The Pro-Enterprise Panel will also work with businesses to find meaningful and effective ways to help lower regulatory costs for businesses, which include improving regulatory efficiency, simplifying processes and removing unnecessary licences.

Sixth, focusing our help schemes to do more for those with less. This is an accepted principle by most Singaporeans. But we also understand that various groups of Singaporeans would like to see more being done for them, be it in the areas of education, housing, healthcare, transport or other policies. Ultimately, we must forge a social consensus of how much we want to tax the general public to support the desired groups in a targeted manner.

For example, we do not subsidise electricity or petrol prices upfront. That would disproportionately benefit wealthier households as they tend to consume more of such goods. Instead, the Government provides U-Save rebates, with households living in smaller Housing and Development Board (HDB) flats getting a higher amount. In Budget 2017, the Government announced a permanent increase to the Goods and Services Tax (GST) Voucher U-Save rebate to offset some of the increases in utility bills for the lower- and lower middle-income households following the water price revisions. With the additional U-Save rebates, 1- and 2-room HDB households, including most 3-roomers, will not see an increase in overall water bills on average.

While this strategy is economically and socially sound, it comes with two challenges. First, by not subsidising prices upfront, consumers may experience a "higher sticker price". This may create a disproportionate negative psychological impact because the backend subsidies to help lower-income groups reduce the actual prices paid, is not as obvious or visible. Second, it is always politically more difficult to carry the ground when different groups of people receive varying levels of assistance because they are assessed to have different needs. Regardless of the method of needs assessment, it will often be fraught with debate and challenged by those who receive relatively less help. However, the alternative to give the same help to all without discrimination also cannot be the wisest way to expend our finite resources to help those who need it most.

Seventh, enabling consumers’ choice. We will work with the National Trades Union Congress (NTUC) to strengthen CASE's capabilities to better promote consumer awareness and empower consumers to make informed purchasing choices to stretch their hard-earned dollar. One way is to improve price transparency on common household items like groceries and cooked food so that consumers can be more informed. Today, with technology and crowd sourcing platforms, consumers should be much better able to make informed choices on where are the best deals in their local neighbourhoods. We will work with NTUC and CASE to see how best to bring about such platforms for our consumers, tapping on the local networks. We will also work with NTUC and CASE to establish a panel comprising relevant stakeholders, such as merchants’ associations, unions and grassroots leaders, to help oversee this effort and look into ground feedback to help consumers stretch their hard-earned dollar, while deterring unfair pricing of consumer necessities.

Last but not least, our eighth strategy, leveraging our social enterprises. The Government will continue to work with social enterprises like NTUC to benchmark the prices of various essentials. This was the origin of the WELCOME supermarkets for groceries many years ago. NTUC FairPrice continues to expand its House Brand product range of affordable value-for-money alternatives. We will work with NTUC to establish more NTUC FairPrice Shop stores in our neighbourhoods to make affordable products more accessible to all. NTUC Social Enterprises have, over the years, extended its offerings to include basic insurance, childcare, eldercare services and cooked food options to meet the evolving needs of Singaporeans. By helping to moderate the prices of essential goods and services, social enterprises, such as NTUC, play an important role in benchmarking prices across the board.

Mr Speaker, Sir, with your permission, may I distribute the infographics to the Members now before I conclude?

Yes, please. [Copies of handouts were distributed to hon Members.]

We should be getting a set of three. One in yellow for the senior citizens, one in pink for families with school-going children, and one in blue for young couples. There will be more of these in the Members' Room for Members who wish to have more copies to distribute to their residents to help reassure our residents that we will do what we can to help everyone manage their cost of living issues.

Mr Speaker, Sir, let me conclude. Cost of living pressures will always be present in various forms. Managing the challenges is never-ending work. There are many factors that drive price changes. There are also real and perceived gaps between Singaporeans’ aspirations and anticipated means to fulfil these aspirations. More importantly, we recognise Singaporeans’ evolving aspirations for a better life for themselves and their families, and the associated stress of achieving real income growth in a volatile economic environment.

The Government remains committed to helping all Singaporeans manage and achieve their aspirations. Beyond creating opportunities for Singaporeans to enjoy real wage growth to meet their aspirations, the Government is also committed to helping Singaporeans stretch their hard-earned dollar. At the same time, we are also cognisant that, with finite resources, support must, first and foremost, be given to those most in need.

Mr Liang Eng Hwa.

Sir, I would like to thank the Minister for a very comprehensive reply. I am heartened that the Government is paying attention to this issue and harnessing the whole of Government, whole of society, to deal with this ongoing concern. I have a further question for the Minister.

While I appreciate the efforts that are targeted primarily at our low-income Singaporeans to cope with the increase in cost of living, I would like to ask the Minister what more can the Government do to help the sandwich middle-income group. This group is unlikely to qualify for most of the schemes, or the subsidies are always often tiered lower due to their higher income. Understandably, they do aspire to live well and they also want to have a better lifestyle, whether it is wants or needs. They are feeling that the household expenditures are also rising as their financial commitment increases.

I would like to ask the Minister how can the Government help this group deal with the "money-not-enough" cost pressure that they are facing.

Mr Speaker, Sir, I thank Mr Liang Eng Hwa for his supplementary question. Let me, first, make a clarification. The Government is concerned not just with the lower-income. That is the reason why I have asked the Ministry of Trade and Industry (MTI) and the various agencies to look across the entire spectrum of families in Singapore – retirees, middle-income group – because they all face different pressures. Of course, as a general policy, we try to do more for those with lower income and, perhaps, the retirees first.

Having said that, the Government is very aware of the aspirations and the needs of the middle-income group. That is why we have a broad-based swathe of measures that I have alluded to, to help everyone in Singapore. But specifically for the middle-income group, there are also various schemes that the Government will extend to help them. It may not be in the same quantum as the lower-income group but, generally, they do get different forms of help and different tiers of help.

Members might recall that, once upon a time, when I was in the Ministry of Social and Family Development (MSF), I showed everyone a chart, a diagram, which is now euphemistically known as the kueh lapis chart. We try to help everyone in Singapore by making sure that those with the least get the most. But that does not mean that those with more did not get anything. It is just a tiering of the different help schemes that they have. So, for many of the middle-income, I think their concerns would be the education for their children and, perhaps, the utilities bill that they have to face. Also, many of them will be taking care of their elderly parents as well. We are very aware of this and the way we help them is as follows.

First, we try to do as much as we can to take care of our seniors to relieve the burden from the middle-income households with elderly parents.

Second, we want to make sure that the children's education remains affordable and everyone will have similar opportunities to excel and to fulfil their potential. Our promise as a Government is that, so long someone is capable and committed, they need not worry about their means, their family's circumstances. That is why we give away as many scholarships/bursary awards as possible to help our students excel. So, by relieving the pressures from the older folks and the younger folks, we hope to relieve the pressures on the middle-income middle-aged families.

And I would like to add one more point. We were all looking at the averages. I have personally asked my staff to look at each of the decile band because, while our averages are moving up, we are obviously conscious that not everyone will move up at the same pace or the same rate. And we have to pay particular attention to the group that I mentioned just now who have lower wage increases or stagnating wage increases because their industries are going through rapid transformation. This is where we will work closely with the Ministry of Manpower (MOM) and NTUC to help our workers transit to a new industry, to acquire new skills and take on new jobs before they are displaced.

Finally, I would like to share the story that my grandmother used to tell me. Members would probably know that I came from a single-parent family, so my mother had to work two jobs when we were young, so I was brought up by my maternal grandmother. There were three things that I always remember her teaching me about managing our family's finances.

First, she always reminded me that I must get a good job. I must make sure that I earn enough to take care of the family. It is a reminder to urge us to study hard, to acquire the correct skills and that, so long as you are prepared to work hard, there will be an opportunity in Singapore for us to succeed. And this is also the same philosophy and commitment that I bring with me to MTI, NTUC and MSF, that we must help our workers, first and foremost, to have those opportunities to realise their aspirations and ambitions.

The second lesson that my grandmother always drummed into us is that we should aim high. Singaporeans, like all of us here – it is not a sin to aim high. We should all aim high but yet, at the same time, we must know our own strengths and weaknesses so that we do not stress ourselves or overly stress ourselves and our families. We must know what our capabilities are, what we are good at. But as we aim high, we must also be realistic in how we achieve those ambitions, like the Chinese say 适可而止 – knowing our own limits.

The third thing that my grandmother always reminded me was that, regardless of our family's circumstances, we must always have a care for those who are less fortunate than us and who may need a bit more help than us. During my time, I never knew that there was something called "MPS" – to go and see the Member of Parliament (MP). We did not have Social Service Offices (SSOs). We had 福利部 but I was always reminded that, that is really for those who really, really need help and we should always try to take care of ourselves and, at the same time, take care of other people.

And I think these three rules are quite instructive in how we approach this issue of cost of living. First, we must make sure that every Singaporean has good jobs that can allow them to fulfil their potential. Second, we must help Singaporeans stretch their hard-earned dollar, that while pursuing their ambitions and aspirations, that we are also realistic about our options and how we should distinguish the needs and the wants, so that our families can have a better quality of life that is sustainable. Last, but not least, with the resources that we have, either as a family or as a society, we must make sure that we give the most help to those who need it a bit more than us.

Er Dr Lee Bee Wah.

Mr Speaker, Sir, I thank the Minister for his very inspiring sharing of his stories. I have three supplementary questions. I would like to ask the Minister the item on food prices. How is it being computed? Because it shows that there is a decline from 2007 until 2017. But then, if you are to look at the price at the coffee shop, it is definitely not the trend. The second question – I have residents who keep telling me that food prices in some of the coffee shops have gone up even before the effect of water price increase or electricity tariff increase. And each increase in the food price is a lot. Each increase is 50 cents – from $3.00 to $3.50, from $3.50 to $4.00, unlike previously, when the increase was 10 cents or 20 cents. I would like to ask the Minister if his Ministry would set up a committee to look into anti-profiteering. Please do not ask my residents to go to CASE, because it affects all Singaporeans.

The third question – I also got feedback from residents, because in Nee Soon South, we have NTUC and we also have Sheng Siong. I heard from residents that – giving due respect to our colleague Mr Seah Kian Peng and those who are in NTUC – the food or the price of those things sold in NTUC nowadays are not necessarily the cheapest. So, I would like to urge the Minister to look into this.

I thank the Member for the supplementary questions. It is actually a valuable opportunity for me to clarify some things. I would not speak on behalf of NTUC FairPrice. I would share my experience as a previous and immediate-past NTUC Secretary-General. And I think this is important.

Let me first share on the charts that I shared. The way to read the chart is that it is not that the food prices are decreasing. The rate of increase has come down. The lines show the rates of increase. The one that the Member referred to, I think, is the second chart, right? That means food prices are still increasing but the rate has come down from what used to be 3.3%, to 2.1% to 1.4%. It is an increase but a slower rate of increase.

Then, how is this computed? That is why I mentioned at the beginning of my speech, some of the food items and the prices will have a disproportionate impact because, in our psychological perception, we use it every day. For example, coffee prices at coffee shops will be one very clear example. But in the overall basket of goods, coffee is but one item in a basket of goods. So, how a basket of goods is constituted statistically is by the spending pattern of the different household types. Different household types have different baskets of goods. So, the first clarification is that it is not that the prices are not increasing, but they are increasing at a different rate and it also depends on the basket of goods if you look at the charts, for example, in the top chart. That is why we have broken it down into the bottom 20%, middle 60% and top 20%. Each of the three groups, including the retiree households, also have a different basket of goods because their consumption patterns are different. That is the first thing.

The second thing, whether we will set up the Anti-Profiteering Committee, I have thought long and hard about this and we have previous experiences on how to be more effective, which is why for strategy No 7, I have proposed to do things a bit differently to give us better and faster results. If you set up a committee to go and look at coffee price in one coffee shop, and there will be many of these places, the speed is just not fast enough. And you ask a committee to decide whether the price is fair or not, it is also quite difficult.

But today, we have a better platform that can do this for us. Today, with the crowd-sourcing platforms, when people put their prices there, you can do an instant comparison. I think this is even more effective in deterring those merchants that may be pricing their goods unfairly. For example, in Yishun, our favourite constituency, supposing we can set up an area to tell people where in Yishun is the cheapest coffee, the cheapest kaya toast and, if your residents can access the information easily and people can freely put and make available the prices that they are offering in Yishun, then it will help consumers to stretch their hard-earned dollar; and it will be a much faster process than trying to submit a coffee price increase to someone else and come back later in that process.

In this open and transparent platform, I think it will help to deter those people who may want to price their products that is out of the norm. This is why I asked to work with NTUC and CASE to proliferate or promote this platform so that we can get a faster response time. Surely, as the Member said, we do not want the situation where for one coffee shop, we send the matter to CASE then wait for two weeks and come back with the result. That would not be very useful. And you also want a certain deterrent effect that people do not spread false rumours. For example, what the Member has suggested, some people said that "I am increasing my price because of the GST hike", but the GST hike is not even coming in yet and not for a few years' time! So, that is obviously not the right reason that they do what they are doing. I hope that through such open platform and open sharing, we can have a faster response to some of these ground issues.

Last but not least, I hope I am not stealing the thunder from the Member Mr Seah Kian Peng. This is a common question which I have always been asked: "Why is it that, once in a while, NTUC, as a social enterprise, has other companies which beat their prices?" On behalf of Mr Seah Kian Peng, from what I understand from him, NTUC FairPrice has a basket of 500 items. And NTUC FairPrice monitors the 500 items every day – their own 500 items and what the market is selling. They will make sure that, on average, their 500 items will be 4%-5% below the whole basket of goods. But that does not mean that every item is 4%-5% below the market price.

On the other hand, if we study marketing, we will also know that from part of the sales strategy, it is in my interest as a competitor to NTUC FairPrice to make sure that, every day, I have a few items below NTUC's prices, in order to attract people to go there because, when you are there, you would not just buy the few items that are on discount. This is quite common in the Fast-Moving Consumer Goods (FMCG) market.

Having said that, I am quite sure NTUC FairPrice will be working very hard to source from multiple agencies to try and reduce the prices, including the recent effort on milk powder, the number of house brands as they continue to expand their products and so forth. So, I think that is the commitment of NTUC.

One very interesting question that I have always wondered in my mind is not so much whether Sheng Siong or Dairy Farm is able to meet and beat NTUC prices. The question is that, if we do not have social enterprises to benchmark some of these things, would the other competitors still charge those prices? That was actually the story of the "Welcome Supermarket" in the 1970s. It was not that they just meet or try to beat NTUC prices once in a while, but it was because of the benchmark. And this is not just groceries. Today, NTUC in the sector of eldercare, early childhood education also performs the same role, which is that they help and work with the Ministries to understand the benchmark and the drivers for those services. And because of that, the entire market has an anchor point, if you like, in their pricing strategy and will not be carried away with just price competition.

Mr Saktiandi Supaat.

I thank the Minister for his comprehensive explanation earlier with the charts. I just have one quick question. In terms of the impact of economic forces, such as the interest rate outlook, going forward, what will be the Minister's view on that, because with the Fed probably raising rates, it would have an impact on Singaporeans in terms of cash outlay in the future, and what is probably the transmission mechanism, taking into consideration our exchange rate policy regime, but what will be the impact of the interest rate outlook going forward and the impact on Singaporeans?

I thank the Member for the supplementary question. Let me answer this question the following way. Yesterday, when we talked about the impact of the trade wars, I briefly mentioned this. Likewise, for any interest rate hikes across the global markets, there is the direct and indirect impact. The direct impact is that it adds to the cost of doing business and the second impact is that it will affect the relative exchange rate, which will then affect the strength of the Singapore dollar to contain imported inflation.

But the most important third-level impact of any interest rate hike across the world is the impact on global business confidence. If, because of the trade wars and because of the interest hike, it leads to an overall dampening of the global confidence level and people's investment, then what affects us most severely is job creation. If we cannot continue to create good jobs for our people, the rest of these other help schemes are actually secondary because, first and foremost, we must have good jobs for our people. When our economy grows, our people have jobs and we have the means to help one another by redistributing some of the gains from this entire economic system. But if the economy shrinks because of the downturn in global market confidence, then there is a significant impact.

So, there are three levels of impact: (a) the direct interest rate cost that the Member mentioned on business; (b) the impact on the exchange rate which affects our ability to contain imported inflation; (c) and most importantly, and together with the headwinds that we face in the global trading environment, how it affects our economy and our ability to continue to create good jobs for our people to earn good incomes.

Mr Seah Kian Peng.

I thank the Minister and former Secretary-General of the NTUC for his answers. I just have a few questions for the Minister. Indeed, the cost of living is a big issue, and the eight-pronged approach that he has outlined, the strategies, are all very important. I just want to say that, in addition, one key aspect – perhaps, it is within the eight but I did not hear it – is about consumer education.

Frankly, I think all of us know that eating-in is a lot cheaper than eating-out, wherever you may go. So, things like that may be simple tips. But I think they are useful tips which could be incorporated within the eight tips that the Minister has.

Speaking as an employer, too, the cost of doing business is, indeed, something which needs to be addressed. I know the Minister has outlined some of them. In the case of at least my business at NTUC FairPrice – labour, rent and utilities – these are the three biggest cost levers. On utilities, we all look forward to the opening up of the electricity market that will help all businesses and individuals alike. But on the part of labour and rent, these are areas which the Government is in a position to see how it can continue to effect a dampening of that. During the tea break later, I will explain to Er Dr Lee Bee Wah on some of the things she raised. I will fill her in on other details.

My final point is that I am wearing the hat – again declaring my interest – as Chief Executive Officer (CEO) of NTUC FairPrice and also part of the NTUC Enterprise network. I think the Minister's eight strategies about leveraging social enterprises is something that the NTUC Group and the NTUC Enterprises will certainly be keen to work on and to play our part in seeing how, as a group, we can address this very important issue for all of us.

I thank Mr Seah Kian Peng for his questions and comments. First, consumer education is my strategy No 7. That is why we work closely with CASE to enable consumer choices. Let me say this. We are not here to judge whether somebody should buy this or buy that and what should be necessary for your particular lifestyle. If you can afford it and want to do it, by all means. But I think our job is to enable consumer choice through consumer education.

Let us take the recent example of milk powder. I was the one who sent Mr Seah Kian Peng – I think he still has the photo. One day, when I was shopping at NTUC FairPrice, I was very perturbed because when I walked down the food aisles, the only food item, single item that costs more than $100 for some of the products was milk powder. And I was very intrigued. Why is it that milk powder – same size, same volume – can cost $30-something, $80-something and $120? I took a photo and sent it to Mr Seah Kian Peng and I asked him which is the most popular brand, that means, from sales. It was, on average, the $80 brand.

And I was very puzzled what is the difference between the $30 brand, $80 brand and $120 brand? So, the $120 brand was because some children might be allergic to some ingredients and that is why there is a special formulation. So, I can understand that. Then what about the $30 brand versus the $80 brand? I asked Mr Seah Kian Peng if he could bring in more of the $30 brand. His answer was also quite telling. They have tried before but it did not sell well. Why? I did ask some consumers and parents. Maybe because we will always want the best for our children and we wonder should we stinge on that $50 extra for one can of milk powder. And we ask, "What if there are real benefits which my child is not getting?" We can understand that kind of psychology. But, over time, through consumer education, we have been able to expand the market share of the $30-plus brand, including some of the house brands that NTUC FairPrice has brought in. But today, if I am not wrong, the $80-plus brand is still the most popular range segment. It has come down but it is still quite high. That shows that, actually, all of us can play our part to assure family members of the quality of the products. And NTUC FairPrice has a lot of house brands. But, again, when I was the NTUC Secretary-General, they would not always sell the most or be the most popular brand. But it is okay. So long as we have a variety of choices for our consumers, we let them choose within their means to see what best suits their family needs. So, consumer education is very important.

We agree with Mr Seah Kian Peng's second point that utilities, rents and labour will be concerns for businesses, which is why we are extending the open electricity market to more consumers and small businesses. For rents, as I have mentioned, we will closely monitor the trend to make sure that their rents do not spike because of insufficient space for our businesses to do their business.

Last but not least, we thank NTUC Enterprises for continuing to show leadership in the pricing of its many products and services beyond groceries today, including healthcare, eldercare and also childcare.

Mr Lim Biow Chuan.

Mr Speaker, this is a point of privilege because CASE was mentioned. I was hoping Minister Chan would also say something about CASE, but he only defended NTUC FairPrice! [Laughter] So, if I may just clarify for the hon Member for Yishun, to provide feedback, you do not need to be a member of CASE. You only need to be a member of CASE if you want CASE to represent the consumer to liaise with the business.

On the point made by the Member Er Dr Lee Bee Wah that complaining to CASE has no effect because price —

I did not say that!

— that you do not want the consumer to go to CASE because price has gone up. The reality, as Minister Chan has mentioned, is that every business has different price pressures. So, their rental may be more expensive because they are in a better locality, they may have to pay more for their staff. So, CASE finds it very difficult really to be able to decide which business is profiteering because it sets higher prices. CASE would be happy to work with MTI to try to provide better transparency so that consumers would be able to know which businesses provide the best value to consumers. So, thank you, Mr Speaker, for allowing me to raise that clarification on behalf of CASE.

Er Dr Lee Bee Wah.

Thank you, Mr Speaker, Sir. I did not say that it is not effective to bring the matter to CASE. What I meant is that the cost of living or the profiteering issue affects every Singaporean. We do not want every Singaporean to go to CASE, same as we do not want every o-Bike victim to go to CASE, because it would be flooded by all these cases. We would like MTI to set up a committee to look into specific cases because if one stall increases its price by 50 cents, the next day, another stall will also increase its price by 50 cents. It has its chain effect.

Er Dr Lee Bee Wah, you can settle with Mr Seah Kian Peng and Mr Lim Biow Chuan later at tea. Mr Yee Chia Hsing.

Mr Speaker, to the Minister for Trade and Industry, I would like to highlight this rental issue again. I brought up this issue during the Opening of the Second Session of this Parliament. I think a lot of businesses, because they signed short leases of three years, every time the lease is due for renewal, they face a big surprise from the landlord saying the rental going forward would increase by a huge amount and, if they do not renew, they would have to reinstate. The landlord is actually using this friction of having to incur reinstatement costs to their advantage. All these actually feed into the cost of living because the businesses suffer the higher costs on renewal of rental rates and, because of that, they have to charge consumers higher. So, I hope MTI will look into my suggestions of having longer lease periods as well as mandating that landlords should not put their reinstatement "clause" into all their tenancy contracts.

Mr Speaker, Sir, just two comments in response to Er Dr Lee Bee Wah and Mr Yee Chia Hsing. First, on the issue of the leases, I think we cannot mandate the length of the leases because it is a commercial decision between the commercial entity renting out the place and the one taking it up. But we accept the point and I think Mr Yee Chia Hsing has made the point during the Committee of Supply that the contract must be fair to both sides, and I think that is something that we will certainly encourage and look into. But I think we cannot mandate every lease to be of a certain length because the businesses also require certain flexibility because of their different business models.

On the other issue, I would just like to reassure Er Dr Lee Bee Wah that when there are issues that have to deal with anti-competitive behaviour, then MTI, together with the Competition and Consumer Commission of Singapore, will make sure we take these up. But in all these things, we will have to strike a balance between protecting the consumer and facilitating the business and innovative practices, especially in the current era whereby there is a proliferation of new business models, including the ones that the Member has mentioned. We will have to strike the right balance to make sure that we protect our consumers and yet, at the same time, not stifle innovative practices. We have to find a balancing point as we continue to go along.

Mr Leon Perera.

Mr Speaker, Sir, I thank Minister Chan for his explanation. Just one supplementary question. Would MTI consider measuring and publishing the CPI based on different demographic groups? I know it is published based on income groups, but there could be other demographic groups, such as the three groups where the Government has presented its measures, for example, young couples, parents with young children, and retirees. Would the Government consider publishing a CPI based on these groups because there could be certain factors, for instance, price of milk powder could be one example, which affect certain groups by demographic characteristics, rather than just by income characteristics, and that may enable us to have more well-informed debates about policy?

Mr Speaker, Sir, MTI already does that. So, as Members can see from the charts, we do have various ways to look at the data differently. One dimension would be by income, the bottom 20th percentile, the middle 60th and the top 20th percentile. That is one dimension. The other dimension that Mr Leon Perera mentioned, for example, is retirees, because they generally have no income from work and may be living on their savings. So, we are particularly concerned. That is why MTI started monitoring the data. But it takes us some time to build up by different demographic groups, and we will make available those data when we have them.

3 Mr Dennis Tan Lip Fong asked the Minister for Defence (a) whether any form of ragging is allowed in SAF; and (b) whether ragging or the carrying out of any activity associated with ragging constitutes part of the recognised duties of any SAF officer, specialist, instructor or personnel.

Mr Speaker, the Ministry of Defence (MINDEF) and the Singapore Armed Forces (SAF) take a zero-tolerance approach towards any form of abuse of soldiers or personnel, either by their commanders or peers.

While military training aims to build up the physical and psychological resilience of soldiers and instil discipline, the safety of soldiers need not be compromised. Acts of humiliation are specifically prohibited. Over the years, SAF has put in place a comprehensive safety management system where all training activities conducted are required to be authorised. Each activity is clearly outlined with safety measures and limits, with an approved Safety Management Plan with a Supervising Officer, Conducting Officer and a Safety Officer present throughout. Additional physical training as a form of informal punishment can only be meted out in accordance with stipulated guidelines and based on commanders’ seniority, as prescribed in the SAF Joint Manpower Directive 4-4 on the Informal Punishment System. For all activities, the safety of individual soldiers is paramount, and Commanders must take corrective measures to mitigate risks to their soldiers, where necessary. Similarly, unit orientation activities can only be conducted if authorised and not endanger the well-being of any serviceman. These requirements that I have just spelt out are consistent with the core values of SAF and are known to Commanders.

SAF personnel who conduct unauthorised activities, engage in bullying or have wilfully or negligently not complied with training safety regulations have been and will continue to be severely dealt with and prosecuted either by Summary Trials or General Court Martial within the SAF or criminal prosecution in the State Courts. In 2016, four full-time National Servicemen (NSFs) were prosecuted in the Military Court for bullying a fellow NSF. All were sentenced to between two and four weeks in the SAF Detention Barracks. In 2005, the Supervising Officer, Conducting Officer and instructors from the Commando unit who were involved in the death of a trainee after being submerged in water during a Combat Survival Training course were sentenced to six to 12 months' imprisonment by the State Courts. In 2012, an SAF vehicle overturned during an exercise which caused the death of a soldier. The Conducting Officer who appointed the serviceman to drive the military vehicle even when he knew that the serviceman did not have a driving licence was convicted in the criminal Courts and sentenced to six months’ imprisonment. The officer was found to have committed a rash act and attempted to pervert the course of justice.

SAF soldiers are encouraged to report any unauthorised activity or punishment. New recruits are specifically briefed on how they can do so. They can either report it through their unit superiors or contact the MINDEF Feedback Unit. The number is 1800 367 6767. It is an easy number to remember, 1800 367 6767. And there are SAF Safety Hotlines for the Army, Navy and Air Force [Army Safety Hotline (9732 3891), Navy Safety Hotline (9172 3389), Air Force Safety Hotline (9234 7233)]. I have listed them in my reply to be distributed to the press, as well as recorded in the Hansard so that people will know these numbers and they know that they can report any unauthorised activity or punishment. Every complaint is investigated fully and those caught doing wrong will be prosecuted.

4 Mr Kwek Hian Chuan Henry asked the Minister for Finance on how Temasek Holdings and the Government of Singapore Investment Corporation have performed in terms of investment returns over the long term.

Mr Speaker, the Government of Singapore Investment Corporation (GIC) and Temasek have made money over the long term. Their portfolios have grown over the years. For example, Temasek’s Net Portfolio Value was $164 billion in 2007, compared to $275 billion in 2017.

This growth is underpinned by their investment performance. Temasek’s investments delivered an annualised nominal shareholder return of 6%, in Singapore dollar terms, for the 20 years ended 31 March 2017. Temasek reports its returns in nominal terms, that is, without taking into account inflation. Similarly, over the same period, GIC achieved an annualised real return of 3.7%; this is over and above inflation. I should emphasise that these figures are as at 31 March 2017. Both entities will be releasing updated numbers for the period ended 31 March 2018 soon.

Temasek and GIC's investments benefit Singaporeans through the Net Investment Return Contribution (NIRC) to the annual Budget. The NIR framework allows the Government to spend up to 50% of the long-term expected returns from our Reserves. It has become an increasingly important fiscal resource.

From financial year (FY) 2009 to FY2017, the NIRC totalled about $85 billion, or about 14% of overall revenues. Eighty-five billion dollars is a sizeable amount that can fund many Government projects and schemes.

In FY2018, the NIRC is estimated to be about $15.85 billion, or about 18% of overall revenues. It is now the single largest source of Government revenues, larger than any single tax, including the Goods and Services Tax (GST) and corporate and personal tax.

Our Reserves are an endowment that belongs to Singapore. There are very few countries in the world which have national savings that they can tap on to fund their budgets, and this is especially rare for a country like Singapore which has no natural resources. This endowment was saved over time through the hard work and discipline of our forefathers, invested by GIC and Temasek for the long term. If we continue to be disciplined and responsible stewards of this endowment, our Reserves will continue to benefit all Singaporeans, young and old, today and tomorrow.

Mr Henry Kwek.

Mr Speaker, Sir, I thank the Minister for her comprehensive answer. I have two supplementary questions. Can the Minister share: (a) whether the planned GST increase is linked to past investment losses, such as UBS, Barclays and Merrill Lynch; and (b) can we expect GIC and Temasek to sustain these levels of performance and returns, going forward?

Mr Speaker, with regard to the first question on whether the planned GST increase is linked to past investment losses, such as UBS, Barclays and Merrill Lynch, the short is answer is no. They are not linked. To be even more specific, if the question is whether the planned GST increase is to cover losses from investments into these or other counters, the answer is also no.

The nature of all investments, whether by Government, sovereign wealth funds, or otherwise, is that you are taking a calculated assessment in the present on the performance of an asset in the future. It would be wonderful if we had a crystal ball that allows us to see into the future and can accurately predict all investment outcomes. However, the reality is otherwise. It is not possible to guarantee that all investments will make money all of the time. There will occasionally be losses. That is part and parcel of investing. The only way to avoid any investment loss is just to sit tight and not invest our Reserves, but that would not help either. Because if we just leave the Reserves as they are and do not invest them, not only will those Reserves not grow, but they will be eroded over time by inflation. So, we invest, and that means taking some risks and accepting some losses. But the overall objective is to reap more than you lose over the long term.

In the case of GIC and Temasek, their long-term performance has been very creditable, as I had explained earlier, and they have made money over the long term. Hence, to the question of whether we have to raise GST because of investment losses on certain counters, that is plainly not the case. GIC and Temasek have both made money over the long term and have contributed significant revenues to our budget over the years through the NIR framework, as explained earlier.

The NIRC is the single largest source of income of Government revenues, and it has enabled us to keep taxes low, and also to keep GST increases at bay for many years. If we did not have the NIRC, then we would have had to either double the amount of personal income tax or our GST collection to fund the same amount of expenditure over the years.

Then, one may ask, "Well, if GIC and Temasek contribute to the NIRC, then would not any losses also affect our revenues?" As to this, the NIR framework spending formula is based on expected long-term real returns. It is driven by an overall portfolio approach, taking into account the long-term expected returns of different asset classes, factoring in the diversification benefits, and adjusting based on the long-term investment outlook. From this perspective, the outcome of individual investments or the state of markets from one year to the next do not have a significant impact on our spending levels.

So, in short, investment outcomes in UBS and so on have not had a significant impact on our revenues. That is the design intention behind NIR. It is designed to smooth out the highs and the lows of investment returns, and to give stability to our fiscal planning.

The need for the GST increase was explained in the 2018 Budget Statement. And it is really because we have to prepare for the future. We have enough for this decade, but in the next decade 2020 to 2030, our expenditure needs will grow. We have to plan ahead to meet those needs. We are already reinforcing prudent spending by constraining the growth of Ministry budgets. We already planned to save ahead and borrow for long-lived capital investments which are enjoyed mainly by future generations.

But even with these measures, there will still be a gap. And this is because our healthcare, security and other social needs will continue to grow. This would involve recurrent expenditure for broad-based needs that benefit each generation and should, in principle, be supported by recurrent and broad-based taxes so that each generation pays for its own spending sustainably.

The GST increase is planned for ahead of time to ensure that we are in a sound fiscal and financial position to meet the increased expenditure on the social and security needs of Singaporeans in the years to come.

On the Member's second question of whether we can expect GIC and Temasek to sustain this kind of level of performance or returns going forward, there are near-term challenges, such as the current tensions over trade which can affect global economic growth and the investment outlook. But as I have mentioned, such ups and downs are part and parcel of investing. What is important is that we do not take the creditable investment performance by GIC and Temasek so far for granted. The Government will continue to focus on their long-term overall performance and remain prudent and responsible in how we use our Reserves.

5 Assoc Prof Daniel Goh Pei Siong asked the Minister for Health why CareShield Life is not replacing ElderShield for all Singaporeans with transitional subsidies to ease the shift, as was the shift from MediShield to MediShield Life in 2015.

6 Ms Sylvia Lim asked the Minister for Health whether the Government will review the principles for setting premiums for the proposed CareShield Life scheme so as to have equal premiums for men and women.

7 Mr Leon Perera asked the Minister for Health (a) how are premiums and payouts for CareShield Life calculated in respect of assumptions, such as the targeted capital adequacy ratio and medical loss ratio for the scheme; (b) whether the actuarial model determining such CareShield Life premiums and subsidies will be made publicly available; and (c) how does the ratio of premiums to payouts and the actuarial model used compare to similar Government schemes in other developed countries.

8 Mr Dennis Tan Lip Fong asked the Minister for Health how will the Government ensure that the CareShield Life scheme to be administered by the Government will be as or more cost-efficient as compared to ElderShield which is run by private insurers.

9 Mr Leon Perera asked the Minister for Health (a) whether there will be additional support for those who cannot afford to pay CareShield Life premiums even after means-tested premium support; (b) how will the quantum of such additional support be determined; and (c) whether and to what extent will disposable income be used in making this determination as opposed to merely per capita household income.

Mr Speaker, as I will be moving a Motion on CareShield Life shortly. May I have your permission to take Question Nos 5 to 9 during the Motion?

Yes, please.

Thank you.

10 Ms Joan Pereira asked the Minister for Home Affairs (a) how many industrial fires have there been in the past three years; (b) what is the frequency of SCDF's spot checks on factories and warehouses to ensure that they comply with fire safety measures; and (c) how many infringements have been detected in the past three years.

Mr Speaker, between 2015 and 2017, the Singapore Civil Defence Force (SCDF) attended to about 150 industrial fires on average each year. Of these, about five each year required prolonged operations by SCDF to put out.

SCDF conducts fire safety inspection of industrial premises regularly to check if fire safety measures, such as sprinklers, fire alarms and exit signs, have been properly maintained. SCDF also checks for infringements that could compromise the fire safety of the building and its occupants. These include obstructions to escape routes, overcrowding, unauthorised fire safety works and unauthorised change of use.

In the past three years, SCDF conducted about 10,000 fire safety inspections each year on industrial premises. Enforcement action was taken in about 3,200 cases each year. Fire hazard abatement notices were issued for less serious infringements. For more serious infringements, composition fines were issued. SCDF also prosecuted about 30 industrial premises each year for very serious infringements or recalcitrant non-compliance. In all the cases, the infringements were rectified after SCDF’s enforcement actions.

Ms Joan Pereira.

I thank the Senior Parliamentary Secretary for her reply. I have a supplementary question. I was wondering whether there is a ratio on the number of factory staff to be trained as firefighters, versus the size of a factory floor area. I am asking this because having trained fire safety staff will ensure that there are sufficient first responders who can be equipped or who are equipped to react to a fire outbreak quickly.

I thank the Member for her supplementary question. Industrial premises are required to appoint a fire safety manager (FSM) if they accommodate 1,000 or more occupants, or if their floor area is 5,000 square metres (sqm) or more.

Today, more than 85% of industrial premises are required to appoint an FSM. For very large industrial premises, however, the FSM must be a senior fire safety manager. Large industrial premises are defined as those that have a floor area of 50,000 sqm or more; or have a basement storey with floor areas of 10,000 sqm or more; or that is 31 storeys or more in height, including any basement. A senior fire safety manager is required to have at least three years' experience as an FSM and may be required to hold other relevant fire safety qualifications, depending on the risk nature of his particular premises.

The Member had mentioned first responders. Under the Fire Safety Act, all industrial premises that accommodate 1,000 or more occupants, or have a floor area of 5,000 sqm or more, and any company storing more than five metric tonnes of petroleum and flammable materials are required to form a company emergency response team (CERT). CERT members are trained in firefighting, rescue and first aid, and are the first responders to fight the fire before SCDF arrives. To operate as a team, CERT comprises six members at the minimum. Larger or riskier premises should consider having a larger CERT.

11 Mr Melvin Yong Yik Chye asked the Minister for Home Affairs with regard to the rising Internet love scams that resulted in $37 million of losses in 2017 (a) what is the typical profile of these victims; (b) what has been done to raise awareness of such scams to this group; and (c) what plans does the Ministry have to further reduce the risk of Singaporeans being cheated by such Internet love scams.

A significant proportion of victims of Internet Love Scams are female and between 30 and 60 years old. The scammers mainly befriend their victims through social media and dating platforms, such as Facebook, Instagram, Tinder and OkCupid, winning their trust over time before cheating them of their money.

The Police have been working with partners, such as the National Crime Prevention Council (NCPC), to step up public education on Internet Love Scams. We put out advisory messages through multiple platforms, including newspapers, television, roadshows, posters on public transport, and social media. We have also set up an Anti-Scam Helpline 1800-722-6688, and we also have the www.scamalert.sg website.

Police have been stepping up enforcement. A significant proportion of Internet Love Scams are committed remotely by foreign syndicates. The Police will continue to work closely with foreign law enforcement counterparts to crack down on overseas syndicates targeting Singaporeans.

In October 2017, the Police set up the Transnational Commercial Crime Task Force (TCTF), which will also look into tackling transnational Internet Love Scams. Since its formation, TCTF has seized more than $1 million and closed around 300 bank accounts belonging to money mules who were involved in such scams. This has led to a steady decline in reports of such scams from about 100 cases in September 2017, to about 40 in February 2018.

The Police also work with Facebook to take down accounts that are used by scam syndicates. We intend to engage other major social media companies to do the same.

Mr Melvin Yong.

Mr Speaker, I thank the Senior Parliamentary Secretary for the reply. I think such Love Scams have been around for quite a number of years and it is quite worrying that people continue to fall prey to these scams. I hope the Police can review the effectiveness of our Public Education programmes and see whether we can do more to prevent people from falling for such scams.

I have two supplementary questions. One, with reference to such Internet Love Scams, how much money has actually been recovered by the Police and returned to the victims? Two, many of the victims, in particular, those who may have lost their entire life savings to such scams would be significantly affected, both financially and mentally, especially those who are more aged. Are there any forms of assistance, such as counselling, provided for such victims to aid in their recovery? If not, are there any plans to have such forms of assistance?

We share the Member's concern on Internet Love Scams and would like to assure the hon Member that we will continuously review our outreach strategies and ensure their effectiveness.

On the question of how much money has been recovered, as I mentioned just now, TCTF has seized more than $1 million and closed about 300 bank accounts. The Police will apply to the Courts to ensure that the money gets recovered to the rightful owners.

However, I should emphasise that the nature of Internet Love Scams is such that they are typically borderless and involves transnational syndicates. As a result, despite the Police's best efforts, it may be difficult to retrieve the money and return it to the rightful owners.

But nonetheless, we will try our very best to review our strategies and strengthen our coordination with international agencies as well as other countries' police forces.

On the issue of support, there are various places where victims can seek support. Social service organisations are one, grassroots organisations as well as Family Service Centres are others. I should, however, emphasise that prevention is always better than cure, and it is important to heed the Police's educational messages. One simple message is not to send money to people whom we do not know well.

12 Mr Desmond Choo asked the Minister for Manpower (a) what is the current successful job matching rate of MyCareersFuture.sg; (b) whether there are plans to introduce vernacular versions of the platform to help our older jobseekers; and (c) what are the plans to increase the job listings by smaller companies.

13 Mr Leon Perera asked the Minister for Manpower (a) whether an update can be provided on the job match success rate of the Jobs Bank for Singaporeans; and (b) what measures are being implemented to enable the measurement of job match success rates of the Jobs Bank and MyCareersFuture.sg for the purpose of assessing the returns on investment.

Workforce Singapore (WSG) helps match jobseekers with employers through the Adapt and Grow initiative.

Minister, are you taking Question Nos 12 and 13 together?

Yes, Sir, thank you for pointing it out. MyCareersFuture is one channel among several under Adapt and Grow. It is an online jobs marketplace that recently replaced the national Jobs Bank to help jobseekers and employers perform smarter and faster job searches.

The Jobs Bank had been well utilised, notwithstanding the many other options available to employers and jobseekers. In 2017, more than 20,000 employers placed job postings on the Jobs Bank, of which a small minority were to fulfil the Fair Consideration Framework advertising requirements. In other words, the employers used the platform for job postings even if they were not required to under the Fair Consideration Framework. In total, these job postings received more than two million applications from local jobseekers.

As employers may not update the outcome of their job postings, we are not yet able to capture all job matches facilitated by Jobs Bank or MyCareersFuture. We are, therefore, looking at ways to better assess the effectiveness of MyCareersFuture in job matching, such as inferring placement rates, using administrative data.

Small and medium enterprises accounted for more than 60% of job postings on the Jobs Bank in 2017. We expect the proportion to be similar in MyCareersFuture.

The MyCareersFuture platform is more useful to jobseekers by having the widest possible range of job postings. Employers, too, will prefer to post job openings on a platform that is accessed by more jobseekers. Therefore, instead of creating vernacular versions to cater to specific language users, our aim is to ensure ease-of-use of the platform for all users. We will continue to serve users who are more comfortable communicating in vernacular languages through Workforce Singapore's Careers Connect and the National Trades Union Congress' (NTUC's) Employment and Employability Institute as they have career centres dotted across the island. This includes providing guidance on online job searches so that these jobseekers, too, can eventually benefit from accessing opportunities through such avenues.

Mr Ang Hin Kee.

Mr Speaker, I have a follow-up question for the Minister. Is the emphasis on success rate detracting the jobseeker from the fact that some of them may need to upgrade their skills, learn new skills, or are we paying too much attention on the ability of immediate matching, for example, they think "just because I list myself in the Jobs Bank, or I go to the Jobs Bank, I can therefore get a job"?

Sometimes, people may forget that you actually may need to go for different skills upgrading. Then that journey may take a longer time. So, are we paying too much attention on success rate and not putting enough focus on getting yourselves trained and upgraded to acquire a new skillset?

Mr Speaker, I thank the Member for his question. In fact, it is an excellent question. I can assure the Member that we do not just focus on getting job matches. I think the starting point is that, if we want to get the jobseekers matched with the employers, we have to, first, start with the consideration of the jobseekers' needs. So, if they are job-ready, skills-ready, what they want is an efficient way to find out who is hiring, what the employers are looking for, and what salaries are on offer.

Under those circumstances, MyCareersFuture.sg provides a channel which is free. It does not charge for any of the features, unlike private portals, which charge for certain features. It uses the latest in job-skills matching technology and points out, in fact, if the jobs come with Government schemes support, which no other portal will do.

The reason why we set up MyCareersFuture.sg is also because we know that, sometimes, some additional help is needed to match the employers' requirements by having a skills top-up. So, therefore, our portal makes this clear to the jobseeker: you want the job, you like it, you may not have everything that the employer is looking for, but there is help available. The portal will point this out, and then with a click through, the jobseeker can find out what help is available. So, that is what we do.

Of course, the jobseekers are free to approach the employers through the portal or through other means. For example, they follow up at networking events. That is why, quite often, they may secure the jobs without our knowledge. But that is also the case with other portals. So, we do not insist, right now, that either the employer or the jobseekers must close the loop and tell us that they have secured the job this way. Because if we insisted on that, we must ask if this inadvertently limits the number of jobs listed, or the number of jobseekers who use it. So, whilst we are interested, we want to find out if there has been a job match, we do not yet insist on it primarily because we understand that there are sometimes follow-through, follow-up that can be taken through other avenues.

Assoc Prof Randolph Tan.

I just would like to ask for some further clarifications from the Minister about the fact that if you actually want something like MyCareersFuture to work, you need a systematic volume of participation. So, if we do not have certain metrics about how successful the system is, so how do you get that volume of participation? I am just asking this because I actually think it is a very good idea, but are there intermediate metrics other than the primary success rate?

Mr Speaker, yes. In response to the Member's question, the Member is quite right. The marketplace must be vibrant. There must be many users and there are two primary groups of users. One is the employers. We want to take a look at whether they are putting jobs up as listings and, for this, we also compare ourselves with other portals. I think we compare reasonably well. And I think what has been most encouraging is that although it started as a portal for you to post jobs for which the employer may potentially be hiring an Employment Pass holder for – to fulfil the advertising requirement under the Fair Consideration Framework – in fact, now, those kinds of job listings are a minority. So, what this tells us is that the employers are finding it useful to post the other jobs which they are not required to do under the Fair Consideration Framework.

The other metric that, of course, we track is the number of jobseekers who go online. Again, I think we compare quite well. I can share some of our Jobs Bank statistic for 2017. The total number of job postings is nearly a quarter million and the number of jobseekers, I think I mentioned, there were about two million applications. So that gives us a sense that it is quite an active marketplace. Our aim, of course, is to make it even more active and that we do so by improving the features making it even easier to use.

Order. End of Question Time.

[Pursuant to Standing Order No 22(3), provided that Members had not asked for questions standing in their names to be postponed to a later Sitting day or withdrawn, written answers to questions not reached by the end of Question Time are reproduced in the Appendix.]

"to provide for Investigation for Transport occurences and further matters affecting Transport Safety and for related purposes and to make consequential and related amendments to certain other Acts",

presented by the Senior Minister of State for Transport (Dr Janil Puthucheary) on behalf of Minister for Transport; read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed.

Mr Speaker, I beg to move, "That this House endorses Paper Cmd 15 of 2018 on the 'White Paper on the ElderShield Review Committee's (ESRC's) Report' as the basis for designing CareShield Life, to strengthen our social safety net by providing Singaporeans with basic protection for their long-term care needs, in a scheme that is inclusive, affordable and sustainable."

At the National Day Rally 2016, the Prime Minister announced the review of ElderShield to provide better support for Singaporeans who become severely disabled during their old age. We then appointed the ElderShield Review Committee in October that year. The Committee engaged widely and deliberated rigorously on how to enhance ElderShield and strengthen support for long-term care financing.

The Committee submitted its report in May 2018, and we have accepted the Report, including the recommendation on the new name “CareShield Life”.

The Committee’s Chairman Mr Chaly Mah and some of his Committee members are with us today in the Chamber. They are seated at the back. I would like to place on record my deep appreciation for their hard work over the last two years. [Applause.] I would also like to thank all Singaporeans who contributed their views and suggestions during the process.

CareShield Life will offer better protection and greater assurance for Singaporeans’ long-term care needs. It is a significant step in strengthening our social safety net.

Why the need for the review? It is part of our overall strategy to prepare for the future. Let me give an overview of our efforts over the years to provide the context.

Singapore’s population is ageing. By 2030, one in four Singaporeans will be aged 65 and above, compared to one in seven today. We have around five working adults to each Singaporean above 65 today, but by 2030, this ratio will fall to 2.7.

Our rising life expectancy and falling mortality rates are positive developments. But living longer also means that we face higher risks of frailty in our old age. Some of us may require long-term care and assistance with daily living activities.

This is why we had started investing and preparing years ago. We rolled out Healthcare 2020 in 2012, which included building long-term care and aged care facilities, improving the quality of these services and keeping them affordable.

We then went Beyond Healthcare 2020, to ensure that we can meet our long-term healthcare needs in a sustainable manner. We want to go Beyond Hospital to the Community, by investing in community care and bringing social and healthcare services closer to our people. We are moving Beyond Quality to Value by spurring productivity improvement and providing better guidance on cost-effective treatment. We are moving Beyond Healthcare to Health by encouraging Singaporeans to lead healthier lives.

We have also made several enhancements to better support our seniors. We implemented MediShield Life in 2015 to provide universal coverage with better protection for all, for life, especially the seniors; we also introduced the Pioneer Generation (PG) Package to give our Pioneers greater peace of mind; we have been developing eldercare facilities and services, as well as strengthening support for the care of our elderly in our homes and in the community; we are also integrating health and social care better, and expanding the Community Network for Seniors; we have been growing and developing the long-term care workforce through recruitment, training and productivity improvement so that we are ready for the future.

Our Government expenditure in long-term care increased six-fold from $140 million in 2011 to around $800 million in 2016. And this will continue to grow as our population ages.

The next step is to ensure that our long-term care financing system is strengthened to complement our efforts to develop eldercare services and support. How should we finance our long-term care needs in a way that keeps costs affordable, yet sustainable for future generations to come?

There are four key principles we need to bear in mind when we design our long-term care financing system.

First, affordability. It should help those who need long-term care to afford basic and essential care, by tapping on the various sources of financing that are available, including Government and community support, personal and family savings, risk-pooling through insurance, and additional safety nets to prevent people from falling through the cracks.

Second, flexibility. Long-term care needs of our seniors are by nature very diverse. Therefore, the financing system should be flexible and enable individuals to use services most appropriate for their care needs and circumstances. Whether care is provided at home or by day care centres or nursing homes, and whether it is provided by formal caregivers or by family members, our financing system must have the flexibility to support these options.

Third, it should be inclusive. All Singaporeans, regardless of their income or health status, should be well-supported by our overall long-term care financing scheme. They should be assured that our system will help them with their long-term care when they need it, be it from insurance, savings or subsidies.

Finally, sustainability. Long-term care needs run far into the future with significant uncertainties. We have to ensure that our system is sustainable over the long-term and that we will have sufficient funds to meet the needs in the future when they occur. We should avoid passing the burden to future generations.

Sir, generally, a long-term care financing system has three key components: insurance, personal and family savings, and Government or community assistance and support. These three components work together to achieve our principles of affordability, flexibility, inclusiveness and sustainability.

Let me elaborate on how we plan to strengthen and carefully balance the three components to ensure that all Singaporeans can continue to access affordable and good quality long-term care.

We will expand the role of insurance in our long-term care financing system, with the introduction of the new CareShield Life scheme. In this regard, I would like to thank Ms Sylvia Lim, Assoc Prof Daniel Goh, Mr Leon Perera and Mr Dennis Tan, for allowing us to address your Parliamentary Questions (PQs) at this debate. I would also like to thank Er Dr Lee Bee Wah and Ms Chia Yong Yong for your earlier PQs, which you have withdrawn after we informed you that we would be tabling a Motion on CareShield Life.

How does insurance help? Our long-term care needs and how much we need to save individually are difficult to predict with great accuracy. In fact, our projections are that one in two Singaporeans who are healthy at age 65 could become severely disabled at some point in their lifetime and require long-term care.

Some are surprised by our “one-in-two” statistic and asked why is it that we do not see half of the seniors being severely disabled. If you look around the House, some of us are above 65, but we do not look severely disabled. The simple reason is that we do not all become severely disabled all at the same time. So, it actually happens across a period of time, through our lifespan, and generally after 65.

There is also uncertainty in the duration a person remains severely disabled. The median duration of disability is four years, but three in 10 could remain severely disabled for 10 years or more. If we save for four years of disability, but remain disabled for 10 years, we would not have saved enough. On the other hand, if we saved for 10 years, but we have been disabled for less, we would have over-saved, and therefore, insurance plays a role.

Insurance allows each cohort of Singaporeans to pool our risks together to support the long-term care needs of that cohort in a more efficient way. Let me explain. There are two broad approaches to financing long-term care insurance across the world.

The first is a pay-as-you-go system, where funds collected in a particular year, often through taxes, are used to pay for the claims for that year. That is why you pay as you go. This means that the younger working population will most likely be funding the claims made mostly by the seniors, and most of the seniors have stopped working. This approach creates significant intergenerational transfers, where the younger cohorts pay for the needs of the older cohorts. This is not sustainable, especially for an ageing population, where the number of seniors is growing at a much faster pace than that of the younger working population.

The second approach is one where each cohort pays for its own needs. This is done by putting aside funding while one is still working, and pays for the long-term care needs later, usually after one has retired. Insurance like ElderShield and CareShield Life are such pre-funded schemes, not pay-as-you-go schemes. This approach minimises intergenerational transfers and avoids passing the burden to future generations and helps to keep the scheme sustainable. Senior Minister of State Chee Hong Tat will elaborate further later on.

Pre-funded insurance schemes like ElderShield and CareShield Life allow us to prepare for our long-term care needs in a sustainable way, while risk pooling allows us to average out the risk and funds among us so that we need not worry about over-saving and yet have the assurance that, should the worst happen, we will have sufficient funds.

Mr Speaker, having explained the context for enhancing our long-term care insurance scheme, let me discuss the ElderShield Review Committee’s specific recommendations on CareShield Life.

CareShield Life will be more than an insurance scheme. It will become an integral part of our social safety net. It will provide better protection and assurance for all Singaporeans who join the scheme, through higher payouts for life for Singaporeans who are severely disabled and for life.

We welcome and support the Committee’s recommendation for universal coverage for future generations. This is an important step forward as it would ensure basic protection for the long-term care needs of our future generations, regardless of their health, disability or financial status. This is in line with our vision of inclusivity as it allows those with pre-existing disability to be covered and also ensures that no one will drop out because they are unable to pay the premiums.

Preparing for our old-age needs is often of low priority when we are young, as we tend to focus more on building our career and bringing up our children, and this is understandable. But starting to prepare only when we are old would be very challenging. Therefore, having a universal long-term care insurance scheme for future cohorts is critical and will ensure that our future generations will have a basic level of protection.

The Government will also do our part in supporting this national initiative. Earlier in the Budget this year, the Minister for Finance announced that we would put aside $2 billion to support CareShield Life, and this is on top of the Government’s spending in our intermediate and long-term care facilities and services.

From 2020, all Singapore residents born in 1980 or later will be covered by CareShield Life. In 2020, we will enrol those who are born between 1980 and 1990. After that, future cohorts of Singapore residents will be enrolled when they reach the age of 30.

We will be rolling out CareShield Life for existing cohorts in 2021. Existing cohorts are those who are born in 1979 or earlier. As recommended by the Review Committee, CareShield Life will be optional for them, because of their diverse circumstances. Some of them may already be severely disabled. Some may have made their own plans for their long-term care needs. Some of them may also face significantly higher annual premiums, especially for the older generations, as they have fewer years to spread their premium payments over.

But because CareShield Life will provide better protection and assurance, we will encourage as many as possible of the existing cohort members to join the scheme if they are not severely disabled. To do this, we will provide significant support for existing cohorts to join CareShield Life.

First, to help lower- and middle-income Singaporeans with their premiums, we will provide similar means-tested premium subsidies as future cohorts of up to 30%. Second, we will provide participation incentives of between $500 and $2,500 to all Singapore Citizens from existing cohorts who join CareShield Life in the first two years from 2021. Third, once they have joined the scheme, they will not lose coverage. Should they find themselves unable to pay for premiums later on even after subsidies and incentives, we will provide Additional Premium Support similar to future cohorts.

To help Singaporeans afford Careshield Life, premiums can be fully paid for by MediSave, including the MediSave of immediate family members.

We will also ensure that Singaporeans currently insured on ElderShield can seamlessly upgrade to CareShield Life, and that the premiums they have already paid are taken into account when we compute the premiums they need to pay for CareShield Life.

With your permission, Mr Speaker, may I display a slide on the LED screen, to show how these work together to make joining CareShield Life affordable for existing cohorts.

Yes, please. [A slide was shown to hon Members.]

The example is one Mr Tan, who is 42 years old. He is currently enrolled on ElderShield 400.

To join CareShield Life, his starting annual premium in 2021 would be about $380, after taking into account the premiums he had already paid under ElderShield. Let me clarify that this is only premium he needs to pay. He no longer needs to pay the ElderShield premiums once he switches over to CareShield Life. However, as he is low-income, he will receive a 30% subsidy on his premiums.

In addition, he will also receive a participation incentive of $500 that will be spread over 10 years. Therefore, it is $50 per year. Therefore, his estimated net starting annual premium in 2021 would be $216, which amounts to $18 per month, and he can pay this using MediSave.

If he becomes severely disabled at age 67, he will receive around $1,000 per month for life. This is on the assumption of an increase of 2% a year for the remaining part of his CareShield Life participation.

An older policyholder, who is covered on ElderShield 300, would need to pay an additional catch-up component for 10 years, as he would not have paid as much premiums as those insured under ElderShield 400. And, for someone who is currently uninsured, his catch-up component would be higher as he has not paid any premium at all.

As recommended by the Review Committee, CareShield Life will be administered by the Government on a not-for-profit basis.

The Government will set up an insurance fund which will be ringfenced for CareShield Life. The fund will be administered by the Central Provident Fund (CPF) Board. And all premiums collected and any returns from investments will remain entirely within the fund and used solely for the benefit of policyholders. The fund will be audited annually to ensure that all the monies are accounted for.

The Government will also set up an independent Council to provide advice on the administration of the scheme. The Council will also regularly review CareShield Life and the recommended premiums and payout adjustments to the Government, in accordance with an actuarially sound adjustment framework. Senior Minister of State Chee Hong Tat will share more on this.

We intend to introduce a Bill next year to set up the CareShield Life fund and the independent Council and to effect the scheme by 2020 for future cohorts.

While CareShield Life will provide better assurance for our future cohorts, we recognise that not everyone will be able to join CareShield Life. For example, those in existing cohorts who are already severely disabled will not be able to join the scheme. Those who are healthy but very old also have fewer years to spread their premium payments compared to the younger ones, so they may also find the annual premiums a high hurdle.

At the same time, some of those who join CareShield Life may require additional support, depending on their care needs and financial resources.

We will, therefore, strengthen two other parts of our long-term care financing system – savings and subsidies – that will help to provide better assurance and support for all Singaporeans.

First, we will enable Singaporeans to tap on their personal and spouse’s MediSave savings for long-term care needs. Today, Singaporeans can use their MediSave to pay for ElderShield premiums and, in time to come, CareShield Life premiums. We can also allow MediSave to be used for long-term care expenses, just like we allow it to be used for medical expenses.

From 2020, severely disabled Singapore residents aged 30 and above will be able to withdraw cash from their own or their spouse’s MediSave accounts to support their long-term care needs. Given the diverse needs of long-term care, withdrawals will be in cash so that there is more flexibility on how to use the money, including on home and community care or residential care. Withdrawals can be up to $200 per month, depending on the balance in the respective MediSave accounts. This is to ensure there are some savings to provide for other healthcare needs.

Second, just like we have MediFund for medical services, we will set up a new ElderFund scheme in 2020, to support Singaporeans from low-income households who are severely disabled. Eligible Singapore Citizens can receive up to $250 per month in cash, for as long as they are severely disabled. There will be no cap on the payout duration for ElderFund payouts.

The scheme will benefit those who may not be able to join CareShield Life, such as those among the existing cohorts who may already be severely disabled before the launch of CareShield Life. It will also provide additional support for Singaporeans with low MediSave balances and savings to meet their long-term care needs.

The three enhancements, taken together – CareShield Life, use of MediSave for long-term care, and ElderFund – will provide all Singaporeans with better protection and assurance for their long-term care needs, for life. The payouts from these schemes should not be viewed in isolation, but as part of our overall long-term care financing framework. These schemes will also work with existing social safety net, including Government subsidies and assistance schemes, such as MediFund and ComCare, community support, and personal savings and family support, to help Singaporeans in need.

This reflects our key social objective of forging an inclusive society where society, individuals and their families, as well as the Government, come together to support the long-term care needs of our ageing society through insurance, savings and Government assistance.

Sir, let me conclude. We are launching a package of enhancements to long-term care financing so as to better prepare Singaporeans for our future long-term care needs. First, we are enhancing risk-pooling through a new long-term care insurance scheme, CareShield Life, and the Government will do its part by providing significant support for Singaporeans joining the scheme. Second, we are allowing more flexibility in the use of MediSave by allowing severely disabled Singaporeans to make cash withdrawals for long-term care needs. Finally, we are providing more Government support and assistance for lower-income severely disabled Singaporeans through the new ElderFund.

These enhancements to our long-term care financing system are new, and we expect that Singaporeans will need time to digest and understand them.

We will be reaching out to Singaporeans over the next few years. We will intensify our public education and communications efforts, and work with community partners and other stakeholders. We hope to give Singaporeans greater assurance and peace of mind on their long-term care needs. Sir, I beg to move.

[(proc text) Question proposed. (proc text)]

Dr Chia Shi-Lu.

Mr Speaker, many of us may take our health for granted. But I would submit that many of us may take our mobility and individual independence for granted even more so.

This morning, many of us would have gotten out of bed, had our breakfast, dressed ourselves, maybe even gone in to have shower, did some toileting, but we do not often give these actions a second thought. But we can lose all of these and become disabled and dependent, sometimes suddenly, catastrophically, such as after a stroke. My late grandmother was 70 years old and she was one of the most active individuals I have ever met. She was still working and she would always walk instead of taking the bus. One afternoon, after an afternoon nap, she found that she could no longer do any of these things. She could not walk by herself, she could not take a bus, she could not feed herself or even go to the toilet by herself. And this was all in a matter of a few seconds.

Or it could happen after a terrible accident, such as with a spinal cord injury. Sometimes, the disability may come slowly, insidiously, such as with chronic nerve or muscle diseases and sometimes through mental problems, such as dementia. But all of these could lead us to greater dependence on other people for our everyday activities.

So, Mr Speaker, I feel that the enhancement of ElderShield to CareShield Life is timely and significant, as it constitutes an important piece of our social safety net, which until now, I would submit, has been deficient, in terms of the adequacy of our national long-term disability insurance system.

In January this year, the Government Parliamentary Committee (GPC) for Health submitted its recommendations on enhancing ElderShield to the Ministry of Health (MOH), and we note that our recommendations are broadly in line with those made by the ElderShield Review Committee.

I would like to begin by quoting from our paper, by stating the principal considerations for our recommendations.

One, Prime Minister Lee Hsien Loong described ElderShield as the “one remaining piece” that is needed to consolidate the progressive enhancements to our social safety net. Hence, the GPC believes that in order for it to fulfil its function as a cornerstone of our social security apparatus, ElderShield coverage for our population should be universal.

Two, as for any social welfare programme, a careful balance has to be struck between increasing and expanding benefits so that the programme remains relevant and useful, and yet keeping the scheme both affordable and sustainable for the long term.

Three, if ElderShield is to be universal with mandatory enrolment, then the GPC believes that the Government will have to provide targeted financial assistance to ensure that all Singaporeans will be able to participate in this social security programme, which is designed to increase peace of mind in the event of severe disability.

I have three comments and clarifications.

One, the GPC concurs that payouts be adjusted to keep pace with general and medical inflation and, in order for this to be financially sustainable, CareShield Life premiums will also need to be adjusted.

Could the Minister elaborate on the mechanism through which payouts and premiums are determined and adjusted to ensure that the system remains fiscally relevant yet affordable for all Singaporeans? For instance, when will we know that $600 a month is no longer adequate, and how much should the minimum payout be revised to?

Two, in our report, we recognised the actuarial basis for the higher premiums that women pay but would like to repeat our call that this gender differentiation be removed, in line, for example, with other insurance programmes, such as medical and hospitalisation insurance, such as MediShield.

I note also that Singaporean women tend to have lower average MediSave balances than men, so I hope that consideration be given to provide additional premium support for women as well.

Three, I hope that the Government will remain focused on investing or continuing to invest in Intermediate and Long-Term Care (ILTC) infrastructure and manpower and focus on keeping such services affordable. CareShield Life is a means of financing ILTC for the severely and permanently disabled, but such services are also necessary for those who are less severely disabled, or thankfully only temporarily disabled.

If we do not keep ILTC costs in check, then payouts will be unable to keep up, and CareShield Life will become ineffective. I hope the Ministry will also share with this House how it intends to keep ILTC costs affordable for all, and also the support care within the community.

The prospect of becoming significantly disabled in our lifetime is very real and, by some estimates, may be as high as one in two, but this risk is often underestimated or discounted, and quite understandably, particularly by the young. I hope that, as with the rollout of MediShield Life and the PG Package, the Government will have a comprehensive communications plan to help Singaporeans understand the scheme better. I believe there have been cases in the past where ElderShield policyholders who are able to actually make claims when they became disabled, have not done so because they were simply not aware that they could do so, or even that they were on the scheme.

Finally, I hope that the Ministry will leave no stone unturned to encourage those who are currently not included but eligible for CareShield Life to join the scheme, by not only providing incentives but also making the process as smooth as possible. For those who are already disabled but cannot be covered by CareShield Life, I am sure the Government will continue to provide the necessary assistance and support to them. I support the Motion.

Ms Sylvia Lim.

Mr Speaker, Sir, as many Singaporean families can attest to, financing of long-term care is costly. This is unlike hospitalisation for emergencies or acute conditions requiring a person to be in the hospital for a relatively short period of time. Once the acute stage has passed, a person usually requires some step-down care for a number of years. This can be unaffordable to families, necessitating a broad-based financial support scheme.

To this end, I agree that ElderShield, in its current form, is not adequate. ElderShield was designed to cover “severely disabled” persons, defined as persons unable to do at least three of the six activities of daily living (ADLs), that is, washing, dressing, feeding, toileting, walking and transferring. With this strict qualification criteria, the persons eligible to make ElderShield claims are those who face significant costs of treatment, care and medications. The current payouts of $300 to $400 per month are too small to give families the peace of mind they need.

Today’s debate is important, as CareShield Life is an opportunity to demonstrate our values. As we battle inequality and disturbing signs of an economic class divide, new policies for risk-pooling and mutual support will be increasingly necessary. In this regard, it is comforting to read in the ElderShield Review Committee’s Report that a respondent told the Committee that he did not mind paying more premiums as “we are all a society”.

Mr Speaker, we in the Workers’ Party, support in general the rationale for CareShield Life. Nevertheless, there are certain aspects of the proposed scheme that appear to us to be more controversial. For instance, for a compulsory scheme, have the premiums been set too high, based on assumptions that are debatable? To ensure greater confidence and buy-in to the scheme, how transparent will the process of setting premiums and payouts be? These and other issues will be covered by my other colleagues.

For my part, I shall focus on two aspects of particular concern: first, the eligibility criteria for claims, that is, how disabled must a person be before being able to make a claim? Secondly, the premiums being differentiated by gender, that is, why should women be asked to pay higher premiums?

First, how disabled must a person be to make a claim?

Since CareShield is going to be a compulsory disability scheme, all Singaporeans born in 1980 or later will be making mandatory contributions for 37 years, from age 30 to 67. To justify such a national draw of MediSave savings, CareShield Life must be meaningful. CareShield Life must kick in to provide financial support to our citizens in times of disability.

Under the current proposal, CareShield will adopt the same eligibility criteria used in ElderShield. This worries me.

The assessors will have to determine whether a potential claimant is disabled enough as to not be able to do at least three of the six ADLs. How strict is the assessment? Here I wish to share the experience of one of my residents, who has since passed away.

This resident, Mr K, was suffering from an advanced stage of kidney failure and already had his leg amputated earlier due to diabetes. The insurer later decided to discontinue Mr K’s ElderShield benefits as the insurer’s panel doctor had assessed that he could perform all of the six ADLs “although partially”. When I appealed on his behalf for a re-assessment, the insurer wrote back to him to fill up another claim form. Meanwhile, he was admitted to a hospice. When I saw him there, he requested me to write to the insurer to say that he would not be filling up the form as he was in the hospice. Eventually, his daughter filled up the form, and I understand that the hospice doctors assisted to get his ElderShield benefits restored. But within a month, he was dead.

Mr Speaker, I do not know what rigorous standard is applied to determine if a potential ElderShield claimant is disabled enough. When I read about the ElderShield premiums in the billions that have been collected over the years, it struck me how Mr K and his family have apparently been abandoned in their time of need. Is the experience of Mr K an aberration? If this is going to be the experience that will be carried over to CareShield Life, it would be unacceptable.

Sir, I am concerned that the “three ADLs test”, which will exclude disabled persons facing high medical and care costs, would leave them in the lurch. By the time a person is unable to do three ADLs, one is in dire straits. One is either headed towards a nursing home or needs someone to provide care full-time. Before one reaches this stage, if CareShield can give some payouts, then it is likely that the disabled person can continue to be looked after at home with some part-time help. The payouts will fulfil a very important gap to enable the disabled person to age in place and not tie up another nursing home bed.

Is CareShield not a good time to review the three-ADL test? Why not use a test of inability to perform two ADLs instead?

I note from Annex B of the Committee’s Report that under the long-term care scheme in Germany, persons can claim if they are assessed to have at least some impairment to independence on physical and mental conditions, with payouts which are tiered.

Mr Speaker, earlier, the Minister, in moving the Motion, said that the Government will encourage those born before 1980 to opt in to CareShield Life. In this regard, if a two-ADL test or some more flexible disability test is adopted for CareShield Life payouts, then more of the older cohorts currently on ElderShield may also be incentivised to join CareShield.

I would like to emphasise the point that CareShield Life will be a compulsory scheme, and young Singaporeans will have to pay 37 years of premiums. With this looming fact in mind, CareShield must have meaningful coverage, and my view is that the “three ADLs test” needs to be reviewed and readjusted to serve this end.

Second, why is CareShield making women pay more?

It has been proposed that premiums for CareShield Life be differentiated by gender. Women will be asked to pay higher premiums, because, as the Committee says at Chapter 8, women have a longer life expectancy and have higher risk of severe disability. Yet, the Committee insists that CareShield Life’s features are “universality” and “risk-pooling”.

Could the Government clarify whether there is any other country with compulsory long-term care insurance that discriminates premiums by gender? In any case, Mr Speaker, it is up to the Government to decide whether this recommendation of the Committee should be adopted. After all, deciding whether to set premiums as gender-differentiated or on a unisex basis is taking a stand on our society’s values.

The Committee writes that having gender-differentiated premiums is needed to ensure that CareShield Life “remains sustainable regardless of the mix of men and women who join”. But for a compulsory scheme, where every birth cohort will be included, does this argument, of not knowing the mix of men and women who will join, hold water?

I refer to a 2010 article by Nicholas Barr, Professor at the London School of Economics, entitled “Long-Term Care: A Suitable Case for Social Insurance”. Prof Barr agrees that to finance long-term care needs, using compulsory social insurance rather than optional private insurance will better cushion citizens from risk and uncertainty. On the issue of women living longer, however, Prof Barr argues that social insurance schemes for long-term care should not take this into account. He offers several reasons for this: “First, if the insurance is mandatory, there is little or no distortionary effect from charging men and women a premium based on joint probabilities; second, there are obvious political difficulties from imposing on women a significantly higher contribution rate than men; and finally, the use of unisex tables can be defended as a simple value judgement”.

So, what are our judgements and values?

In addition, we must also recognise the fact that many women give up their careers and personal ambitions to do unpaid caregiving for their families, services which the families would otherwise have to pay for. A 2017 report by the Ministry of Social and Family Development (MSF) found that women are much more likely than men to remain outside the labour force for family-related responsibilities. The younger women between 30 and 39 years old cited childcare as the main reason for not working, while females aged 60 and above cited housework and caregiving responsibilities as the main reason for not working.

Married women often provide care for their husbands, delaying or even preventing the men’s progression to becoming disabled. When husbands need long-term care, wives are there. Daughters, and daughters-in-law, too, often step up to the plate. By so doing, many women have lower CPF balances than men.

What signal do we send to our mothers, wives, sisters and daughters by requiring them to pay higher premiums, while expecting them to do more caregiving for free? It seems that the opportunity costs to women are being repaid by higher premiums for CareShield!

If we talk about risk-pooling within each generation, with each generation paying for itself, is it too much to ask to risk-pool between the genders and use unisex tables for premiums?

Sir, let me conclude. I have stated my general support for the principle underlying universal and compulsory long-term care insurance that the CareShield Life scheme represents. I have, however, raised two issues which I believe are critical to the Scheme’s success, namely, whether the qualifying “three ADLs test” is too rigid and onerous, and asking for the premiums to be set on a unisex basis if the scheme is truly to be universal and inclusive.

The CareShield Life proposal has much potential to be a strong social safety net for our people. This is a great opportunity which should not be squandered.

Ms Chia Yong Yong.

Sir, I welcome the report of the Committee. I thank the Committee for the hard work that they have put in and for the many prudent recommendations given. The report of the committee was dated 25 May 2018, on the same day the Minister signified the Government's acceptance and, in two days, the acceptance was announced in the press. That has caused some of us to wonder about whether the Government had sufficient time to deliberate on the report. And I thought, as a preliminary point, the Minister may wish to clarify that.

I am also, therefore, glad that Minister has moved this debate to allow Members to seek clarifications for which I have also many.

Sir, I support CareShield in principle and whilst I welcome the Government’s measures to provide universal and basic long-term care and support for designated cohorts of Singaporeans, I am disconcerted that such universal coverage is not extended to all Singaporeans. It is, nonetheless, in many ways, an improvement over ElderShield.

The Minister has explained the rationale for the exclusion of certain Singaporeans, but I hope that we can continue to consider the ways in which we can provide assistance in a more equitable and comforting manner.

Sir, we noted that those who opted out of ElderShield and have severe disabilities will not be eligible for protection under CareShield. I would like to know the definition of severe disabilities and how do we treat persons who have disabilities but perhaps not sufficiently severe? And what is the treatment for persons who have medical conditions but no disability?

In respect of the Government schemes that the Minister has raised which will be used to support those who are not covered under either ElderShield or CareShield Life, I would like to know whether there would be a single set of eligibility criteria. Will there also be simplified applications and administration in those schemes to facilitate access to the assistance?

From the administrator's perspectives, each would have their accountability for the administration of a scheme, but from the users' perspectives, we are all only seeking one single route of assistance.

Also, ultimately, for clarity, could the Ministry clarify which groups of Singaporeans will have no protection under ElderShield, CareShield and no assistance under Government schemes? I think it is important for us to know who we are and what we can do for them. So, it is very good that we understand who qualifies; it is important for us to know who does not.

Also, with respect to the conversion of protection from ElderShield to CareShield, I have noted that premiums paid under ElderShield will be taken into account for the payment of premiums under CareShield, as the Minister has said. But I wonder if the Ministry can also give more clarifications and examples of how such consideration would be applied.

In relation to excess premiums collected under ElderShield, since Eldershield is an opt-out scheme that came into operation by the compulsion of the state, I would submit that although insurance policies are issued separately by insurers to the insured, actually there is really no direct contractual relationship between the insured and the insurance company. Why do I say so? Because this is a compulsory scheme – we either opt out, or we are in; we have no way to negotiate; we cannot even choose our insurers. Therefore, they are, I submit, the agents of the state. That being so, the premiums that they collect – the excess premiums they collect – does the state have a claim? How should we deal with those? I am prepared to concede that the profits that they make out of those premiums should be retained by them, but perhaps the Minister can clarify how the excess premiums will be treated when CareShield is launched.

I have raised what basically relates to actuarial consideration applicable under ElderShield, and I believe that this will also carry through to the considerations under CareShield Life as well. So, for example, when ElderShield payouts were increased, were ElderShield premiums also increased? And when we compare the premiums of $3.3 billion collected with the payout of $133 million in claims, whether the Government conducted an independent actuarial verification to justify the premiums that continued to be collected for ElderShield, and whether those considerations guided the Government in the calculation of the premiums for CareShield.

Can the Minister perhaps further clarify also actuarial considerations for the exclusion of persons with pre-existing conditions for conversion from ElderShield to CareShield, and for the exclusion of persons with pre-existing medical conditions who were born before 1980? I know we are all excluded, but could it be argued that there could be an element of discrimination? Perhaps the Minister may wish to consider from that perspective.

And in light of the Committee’s recommendation that premiums should be actuarially priced and adjusted regularly to take into account changes in payout quantum and claims experience, we accept that proper premium quantum may be difficult to assess in light of significant uncertainties. But I am wondering if, for transparency, the Government will consider the following, such as statutory mechanisms to adjust premiums in future, statutory principles to be applied in the adjustments of payouts, what happens when we need to freeze or lower payouts in the event of a squeeze on the scheme. And at the very least, as suggested by Dr Jeremy Lim in his article “Why Singapore needs the new CareShield Life” published by Today Online on 5 June 2018, could we have raw data and assumptions in actuarial computations being made available to the industry and academics so that the transparency of the computations can be clear to all?

And a few final questions to the Minister for clarification. I understand that CareShield is an important part of this big piece of puzzle that we are trying to build. But other than putting pieces together, can there be synergies to be built among the assistance schemes of ElderShield, CareShield, MediShield, MediFund, rather than just taking a defensive approach – a stopping-the-gap approach? Are there positive synergies that can be achieved out of that?

Second question: who ultimately has oversight of the overlays, or potential gaps, among the schemes and the toll that they may take on Singaporeans’ CPF monies?

The final question is probably the easiest, which is on the administration of the scheme. Can the Minister clarify how the Government has acquired the necessary expertise and resources to manage the insurance scheme?

Subject to my clarifications, Sir, I support the Motion.

Mr Pritam Singh.

Mr Speaker, I would like to acknowledge the contribution and work of the ElderShield Review Committee under the Chairmanship of Mr Chaly Mah in framing a new long-term care plan for Singaporeans.

The current ElderShield Scheme has seen around 40% eligible of Singaporeans opting out because of the perception of low payouts, amongst other reasons. Making CareShield compulsory and universal and separately collecting premiums earlier from the age of 30, represents a fundamental reshaping of Singapore's long-term care insurance scheme. At the outset, it is important that the Government not underestimate the extent of misinformation surrounding the scheme. The recent WhatsApp messages which the Government sought to debunk through the mainstream media about it allegedly profiting from CareShield Life can be put down to some perceived pain points and public education gaps.

Many of these find their roots in the lack of knowledge about the principles behind long-term care schemes, such as ElderShield, but also in the use of statistics and data that are based on projections for which little detail and clarification have been provided thus far. In particular, the question of ever-escalating premiums after transitional subsidies and CareShield Life's likely loss ratio, given the ElderShield experience, has created considerable unease in the public mind. While the use of MediSave to pay CareShield premiums was recommended by the Committee, this has also raised the prospect of a further depletion of CPF members' MediSave account towards another compulsory scheme after the recently announced MediShield Life, a scheme whose transitional subsidies are only going to be phased out in 2019.

In the case of CareShield Life, the effect of technological disruptions on permanent jobs, the gig economy and more contract jobs in the workplace creates insecurities which impact sustained participation in compulsory schemes, particularly when future premiums are going to increase.

One major concern I have, which the Minister briefly expanded upon, is the statistics that the ElderShield Review Committee and many mainstream media outlets zeroed-in on of one in two Singaporeans becoming severely disabled in their lifetime. From footnote 10 in the Committee’s report, this is an MOH estimate based on local data, supplemented by international data. This factoid, which appears prominently in the Executive Summary of the Committee’s Report, has raised eyebrows leading some to enquire whether it is unrealistically dire, legitimising higher and earlier premium payments. I would like the Minister to explain this projection, specifically, how the Ministry came to this conclusion, because many Singaporeans cannot visualise how it coheres with the reality they see around them today. More details on this statistic would be welcome.

This, in turn, has led some to focus narrowly on the by now familiar statistic that ElderShield collected about $2.6 billion in premiums while paying out only slightly in excess of $100 million from 2002 to 2016. In fairness to ElderShield, this point cannot be intuitively understood until one appreciates that ElderShield continues to provide lifetime coverage after one stops paying premiums and the scheme requires significant pre-funding to anticipate sufficient payouts for policyholders.

To this end, it would be important to reveal the actuarial principles and considerations behind both ElderShield and CareShield Life. In this regard, there are some questions I seek the Minister to shed light on.

When ElderShield was launched in 2002, MOH made a specific provision in its ElderShield contract with the private insurers to return up to 50% of any accumulated surplus to existing policyholders, if the actual claims experience should turn out to be different from what was projected in 2002. In the first five years of the scheme, ElderShield claims have been lower than those projected in 2002. From a Parliamentary Question filed by my colleague Assoc Prof Daniel Goh in 2017, the Ministry confirmed that two ElderShield rebates have been given to CPF members enrolled in the scheme – one in 2007 and another in 2012 – to the tune of $130 million in total.

On what basis, did the Ministry set the rebate quantum at 50% when ElderShield was first introduced, and is there a rebate quantum assigned for CareShield Life and, if so, what is it, or is this a matter for the Independent Council to pursue?

Secondly unlike ElderShield, a significant aspect of CareShield Life envisages increased cash payouts over time, supported by regular adjustments over time to keep inflation in check. How often will actuarial principles be reviewed, a point that becomes very significant, particularly for those who may have passed away but contributed significantly by way of premiums in the past?

Mr Speaker, to arrest unnecessary speculation and misinformation about CareShield Life, the Government must commit to publish and be absolutely transparent about the actuarial principles and factors that drive premium hikes, including the investment returns on CareShield Life going forward.

To this end, the Committee's report calls for the setting up of an Independent Council and calls on its recommendations to be made public. I would argue that it is in the Government’s interest to consider if it could go further before the CareShield Life Bill is introduced next year. In fact, I would call for the Government to consider implementing a Freedom of Information framework in the administration of CareShield Life and appoint an information officer to the Independent Council who would respond to public requests for information about any aspect of CareShield Life for a reasonable administrative fee.

There are good reasons for the Government to consider taking such an approach. First, such a commitment to openness would go hand-in-hand with CareShield Life’s universal and inclusive approach based on risk-pooling which makes every Singaporean in each cohort, his brother and sister’s keeper. As all Singaporeans contribute to the risk pool, it follows that the Government should make it easier for Singaporeans to take ownership of the schemes they are enrolled into and make enquiries on any aspect of the scheme’s administration.

Secondly, as the Committees’ report puts the onus on the Independent Council to regularly review and recommend premium and payout adjustments to the Government, this aspect of the Council’s work may come under scrutiny whenever premiums are raised. In all likelihood, more questions, not fewer ones, on future and previous long-term care projections will be raised, complete with misgivings, apprehensions and inaccuracies in the coffee shops and on social media. A proactive approach to public education would minimise this prospect and an open information regime would go a long way to addressing criticisms pertaining to transparency and accountability.

Thirdly, the administration of CareShield Life presents an opportunity to pilot a fresh approach towards public education of Government policies. Mr Speaker, we live in an era where inaccurate news can gain currency very quickly through social media and, as such, cloud people’s perceptions of policies. Even as some intentionally perpetuate misinformation about policy, there are yet many others who have genuine enquiries on various aspects of CareShield Life that they may be unsure about. A Freedom of Information regime with respect to CareShield Life can promote the Committee’s recommendation to better educate the public about the scheme. More importantly, the advantage of such an approach towards education is that the public discourse is less likely to be antagonistic but more data- and fact-driven.

To conclude, Mr Speaker, my Workers’ Party colleagues and, I note, the Chairman of the Healthcare GPC have spoken about reviewing whether CareShield Life can be made gender neutral. I strongly support this call in the name of inclusivity and in parallel with the scheme’s philosophy of each cohort looking after itself. It will mean men will pay more and women less. Let it be so. The Motion gives Parliament scope to rethink the concept of inclusivity for long-term care and define it to mean that men and women will not be treated differently.

In this vein, I would also call on the Government to consider extending tax relief to CPF members who top up the CPF MediSave accounts of their loved ones, regardless of gender, until the Basic Healthcare Sum is met, similar to the tax relief cap on top-ups to the Special Account currently. Such a move would enhance the ability of CPF members’ MediSave accounts to support future increases in CareShield Life and other compulsory premiums, generate greater interest for members and give them some peace of mind for their loved ones at the same time.

Mr Speaker, notwithstanding the comments, views and suggestions to improve the management of CareShield Life by my colleagues, the Workers’ Party supports the rationale behind CareShield Life and the setting up of ElderFund.

Ms Thanaletchimi.

Mr Speaker, Sir, I rise in support of the Motion of the White Paper report on the ElderShield review as the basis for designing CareShield Life. Singaporeans will need peace of mind to be certain that their healthcare needs are taken care of, especially their long-term care needs as people live longer. Healthcare for the elderly has been a main worry not only to the elderly but also to the young, as they shoulder the burden of care for their loved ones in their old age when their parents require long-term care. With smaller family size and low fertility rate, the issue of eldercare has become increasingly pertinent. Who cares for my old age? Is it the state, the family or the individual? It is, indeed, a collective effort of everyone. If we truly call ourselves to be an inclusive nation, we must partake in our social responsibility, be it in the form of insurance or risk-pooling.

The recommendations put forward by the ElderShield Committee to strengthen our social safety net for Singaporeans address three key objectives which I fully concur: greater inclusivity, better protection and affordability. These three areas are critical and help ensure that the proposed scheme is sustainable to meet the long-term care needs of Singaporeans.

The scheme does not only benefit Singaporeans who require long-term care, but also their caregivers, to cushion their financial burden on taking care of them. For this scheme to be effective, the proposed payouts need to be reviewed periodically to reflect the cost of living in Singapore, especially the healthcare cost. How often will the Government review the adequacy of this payout? This certainly arises in the minds of many Singaporeans. Specifically, the amount should at least defray a significant portion of their expenses, transportation cost and caregiver costs, notwithstanding consumables and drugs. Is there any benchmark set to defray certain percentage of the cost of long-term care? While we look at the social safety net for their long-term care need, we also must ensure that our healthcare cost is sustainable. The fear is, will the spiralling healthcare cost lead to escalating premium and cash outlay by Singaporeans? All efforts to contain healthcare cost must run in tandem with such insurance schemes.

On Recommendation 9, I support the call for the Government to administer an enhanced scheme. The scheme should not be outsourced to third party insurance companies but instead be headed by the Government to prevent third party insurance companies from exploiting CareShield Life for the main reason of profiteering. We do not want a similar state of affairs like in the past where the Integrated Shield Plan (IP) with no claim limit was sold as a sweetener to entice many Singaporeans, including the mature and older ones, at a very high premium with increasing age. Cost of medical bills become exorbitant with the full insurance coverage under the IP. Healthcare cost needs to be curbed for greater sustainability.

To strengthen transparency, the Government should have additional safeguards and periodic reviews of how these monies are utilised, especially when these monies are invested in varying investment portfolios.

If CPF Board were to administer the scheme in addition to the other schemes, that is MediShield Life, CPF LIFE and so on, will there be additional safeguards and constant reviews of how these monies are used, especially when we recognise the fact that any investments have potential risk to it? In particular, how much loss is acceptable? What is the tolerance limit to risk and losses? Will the principle of perhaps an assurance of net gain over a time horizon, for example, five years, be adopted since it is understandable that there is bound to be risks, that is losses and gains, for any investments?

With CareShield Life being compulsory for all citizens from 30 years old, it will be a considerable sum of insurance monies to be managed by CPF Board. What are the safeguards in place and are there adequate controls, accountability and transparency?

It is also equally important to invest in public education and awareness since the enhanced scheme is new and relatively complex. It should be communicated in simple terms to the lay person. This is particularly relevant to the millennial since there was no option given for them to opt out of this scheme. So, accountability and effective communication of the policy will lead to better appreciation of the scheme and help ease unhappiness from the lack of choice.

On the technicalities of CareShield Life, I wish to seek some clarifications: according to page 63 of the White Paper on the ESRC Report, it states that the impact of cognitive impairments on functional ability should be explicitly considered in the disability assessment framework for claims. How will mental health issues and cognitive impairments be factored into disability assessments for CareShield Life? Mental health issues and cognitive impairments in older Singaporeans do affect their ability to perform ADLs and are significant issues that will be faced by the growing segment of our ageing population. The assessment should ideally be at no cost at all.

While the gender-differentiated CareShield Life premiums reflect the differences in risks between men and women, we should also acknowledge and consider the economic disparity stemming from the gender wage gap. Could the Government look into either reducing the difference in premiums, or provide greater financial support, so that women are not doubly-penalised in having to pay for higher premiums, especially for those with lower income? Moreover, the gender wage gap of 19% to 40% in some industries do persist for various reasons and this makes women more financially vulnerable if they do not have enough for their retirement and also their healthcare needs and payment of premium.

I support the committee's call for the Government to review the existing schemes and subsidies to assist Singaporeans who are already severely disabled in the existing cohorts since they will be excluded from CareShield Life. However, why have such differentiated approaches for existing cohorts of Singaporeans with pre-existing disabilities under CareShield Life, whereas universal coverage was introduced with MediShield Life covering those with pre-existing conditions? How will the Government be offering additional protection to cover people with pre-existing disabilities but are excluded from CareShield Life? What kind of additional coverage is being considered besides the long-term care fund, such as ElderFund, and withdrawal of cash from MediSave? Can the Government review and consider for a second wave of PG Package for those who missed out on the last wave?

Healthcare needs are major concerns of our older citizens. We need to look after their needs adequately. We also need to start educating Singaporeans to sign up for Lasting Power of Attorney to undertake decisions on behalf of them. All things must run in tandem to ensure an affordable, accessible and holistic healthcare for Singaporeans.

Dr Lily Neo.

Mr Speaker, Sir, I stand to support the Motion raised by Minister for Health. Sir, ElderShield review is overdue and thus the newly enhanced scheme, now called CareShield Life, is indeed welcome. I feel that with CareShield Life in place, our Government has completed the provision of the basic safety net for long-term care for all Singaporeans, especially with regard to their healthcare. This is taken together with the implementation of MediShield Life, as well as with our existing MediSave and MediFund schemes. This will give many Singaporeans peace of mind on their healthcare and long-term care needs.

I first spoke on ElderShield in May 2002, several months before its implementation. In fact, this is the 12th time I am speaking in this House on this topic. Before its implementation in 2002, I already raised the concern over its inadequacy in its payout of $300 and in its tenure of payment of five years. This payout was upgraded with another $400-version subsequently. Those individuals with three out of six ADLs, which are washing, dressing, feeding, going to toilet, walking and transferring, such as moving from a bed to chair and vice versa, are totally dependent on others for their daily living. In fact, Minister Gan Kim Yong himself asked in this House, in this Chamber in 2002, on the reasons for citizens opting out of ElderShield at the time, whether it was because of the $300 payout or because of the difficulty in qualifying for the payout with three ADLs.

Today, I still want to raise the same concern that a $600 payout in the year 2020 will still be inadequate. Moreover, this amount will remain flat without adjustments to inflation after start of claim. In the context of Singapore, with increasing smaller families and dual-income families, caring for the severely disabled family members at home is usually with the help of domestic helpers. The payout of $600 will be inadequate for this domestic help, let alone paying for other hefty expenses, such as medical equipment, higher medical costs, physiotherapy and so on. The latter are usually required by the severely disabled individuals.

Whilst I understand that keeping the premium of the CareShield Life affordable is necessary, the adequacy and usefulness of CareShield Life are just as important. In this context, I feel that three out of six ADLs for payout are too onerous, two ADLs criteria would have been a better proposition. The reason is that those with just two ADLs alone, like inability to feed or to go to the toilet, will already need full-time assistance. Even the loss of just one ADL can already make significant impacts on one's life in mobility and in income. My concern is that with lesser CareShield Life, for those with two ADLs, their families may take the option of sending their dependent family members to community hospitals or letting them overstay in acute hospitals, resulting in higher burdens in the end for the families and for the Government.

May I ask the Minister whether CareShield Life can allow the purchase of "riders" with higher premiums for those who want to have better peace of mind and opting for one or two ADLs instead of three ADLs? This is a better option than going to private insurers that will never be like the not-for-profit Government policy proclaimed for CareShield Life.

Presently, ElderShield has a relatively low claims-to-premiums ratio outcome. The annual premium is around $206 million with opt-outs, while the payout amount is about $8.32 million. The number of claimants last year was in the region of 1,750. Considering the disability prevalence rate presently of about 5% for those 65 years and above, it means that there are already some 15,000 people requiring aged-care facility per year. Could the Minister give an explanation for the low number of claimants? Is the main reason being the three ADLs' eligibility as too onerous? Could it also be that the claiming process had been made difficult? Many people had lamented that they forgot to claim ElderShield. For those who tried to claim ElderShield, the process was daunting in filling up forms and looking for assessors. There are presently only 120 general practitioners (GPs) who are the certified assessors. I want to declare that I am not one of them.

I am glad that under CareShield Life, there will be an increased pool of assessors to include occupational therapists, physiotherapists and nurses. May I ask MOH to ensure that the assessment process be simplified with consistency and conformity, so as to enable assessors to give equitable assessments to all patients? Assessors had given feedback that, presently, the grading levels for each ADL can be quite small and slight, making it hard to assess the patients. Other feedback includes requests for assessment forms to be made more user-friendly.

Stroke patients are often struck with severe disability. Will it be onerous for such patients to claim for CareShield Life and how soon after being afflicted can such patients claim?

It had been reported that private insurers collected some $2.6 billion in premiums for ElderShield and only about $133 million had been paid out in claims. In 2020, the Government will take over the coverage, thus there is no risk for the private insurers for future claims. May I ask the Minister about the underwriting arrangements with private insurers and especially on the return amount of all the surplus premiums, including interest and investment income to MOH?

There is a difference in premium payments between men and women with CareShield Life. While I can understand that women live longer, I feel that there can be better inclusiveness and fairness. My concern is that women may have lesser means to pay for premiums compared to men. Women are earning less due to family commitments and may have even lesser savings to spare with increasing age. I welcome the provision for people who are disabled at the age of 30 years to join and to receive payouts immediately after paying for one premium. This reflects the inclusive society that we aspire to build. But I am saddened that this idea of inclusive society does not extend to gender equity by requiring women to pay higher premiums for CareShield Life. I hope the Minister will reconsider on this one.

Sir, those older Singaporeans, especially those above 67 years, will have to pay very high premiums for CareShield Life. Many will not be able to afford the premiums. What kind of assistance is available to assist those, not covered under CareShield Life, being struck with severe disability and have financial difficulty? May I also ask if the Interim Disability Assistance Programme for the Elderly (IDAPE) will still be available with the cessation of ElderShield in 2020?

Sir, for many severely disabled individuals, they prefer to be cared for in the familiar comfort of their own homes and with their families. I feel that MOH needs to develop homecare and community care, presently very scarce, as quickly as possible to cater for our fast escalating need to help severely disabled people remain in their own homes. The other options of long-term care, apart from homecare and community care, are care in nursing homes, community hospitals, as well as day-care and palliative care centres. While we address the financial issue of long-term care with the implementation of CareShield Life, it is vital to continue providing the infrastructure for long-term care for the severely disabled who need institutional care. Of course, daycare centres and nursing homes will have to be increased in number and in quality, and I hope that MOH will also provide humane palliative care with better support and services.

Sir, I would like to conclude that severe disability very often results from complications of chronic diseases. Thus, as a strong advocate of preventive medicine myself, may I beseech MOH to endeavor fullest to assist Singaporeans to keep healthy and to prevent chronic diseases and to have good control of their chronic diseases, should they have them. Thus, will MOH consider incentives, for example, premium discount, tied to our insurance schemes, CareShield Life and MediShield Life, to nudge or motivate people to achieve better health and to keep chronic diseases at bay?

Mr Chen Show Mao.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, Sir, when it comes to preparing Singaporeans for their long-term care needs, the Motion under discussion today, CareShield Life, is a step in the right direction.

There is a saying that we have children so that they can look after us when we grow old. But today in Singapore, depending solely on our children for care at old age is clearly not enough. As our population ages, the challenges of long-term elder care become ever greater. Who else can we depend on? Charities? The Government?

Many people say we depend on ourselves, be it under disability insurance plans, such as CareShield Life or ElderShield, we all have to pay the premiums ourselves in order to receive payouts. Yes, it is probably fair to say that, to a certain extent, we do depend on ourselves for our care. However, I think it would be more accurate to say that we depend on one another. We depend on one another to pool our risks together, so that we can pay relatively low, affordable premiums and receive relatively high, effective payouts. This is very much like the advertisements of insurance companies that say, "All for one, and one for all".

Why do I raise this point today? Because I wish to remind everybody, especially the more elderly among us, that when we evaluate the premiums versus payouts and consider whether to convert from ElderShield to CareShield Life, we should remember this point: the more people we have pooling the risks, the more stable the premiums and payouts will be.

CareShield Life is an enhanced version of Eldershield. The enhancements include lifelong payments, compared to the six-year maximum at present under ElderShield. What is more, CareShield Life will be administered by the Government, and not by the insurance companies. When it comes into force in two years’ time, the monthly payment will be $600, that is, $200 higher than the present $400 under ElderShield. What risks does CareShield Life cover? Among six daily activities, if you cannot perform any three, then you will be considered "severely disabled" and eligible for claims under CareShield. The six ADLs are bathing, eating, changing clothes, going to the toilet, walking in the house, leaving the bed for the wheelchair or chair.

From 2020, those who have reached 30 years of age with severe disabilities will be able to make claims under CareShield Life. What about the elderly? They must first opt in and join CareShield Life. Thereupon, when they are no longer able to look after themselves, whether because of stroke, ageing, dementia or otherwise, and cannot perform three out of the six ADLs, then they will be eligible to make a claim and receive monthly payouts in cash to help meet their mid- or long-term care needs for life, or until they fully recover.

Mr Speaker, Sir, why do we say that the CareShield Life is a step in the right direction when preparing Singaporeans for their long-term care needs? Which direction should our social policies be aimed at? What is our vision? When our ideals are realised, people will not only look after their own family members or children, but the old will be cared for and the disabled looked after. Through risk pooling, we pool our resources to look after the elderly and the disabled who cannot look after themselves.

The Committee says that CareShield Life should be self-sustainable, that is, a balance should be struck between the premiums received and payouts made and payouts should not outstrip premiums. But while the scheme may be self-sustainable, the details of its implementation, or even related work outside the ambit of the scheme, remain to be actively planned for and carried out.

For example, how do we help and extend coverage to those who cannot afford the premiums, so that they will not be left behind? Another example, $600 is more than $400 by $200. But how much more of long-term care can you buy with this additional amount? A full-time maid, nursing home or the day care centre – are there enough options of care available out there, even with $600 in your pockets? And are the costs reasonable and affordable? Mr Speaker, Sir, we have more steps to take and further to go.

(In English): The Review Committee's recommendations are a step in the right direction for long-term care support. They embrace the principle of risk-pooling to address the growing needs of long-term care for those Singaporeans who, whether through age, illness or circumstance, become severely disabled.

The Committee recommends Government support through: (a) permanent means-tested premium subsidies; (b) transitional subsidies; and (c) additional premium support for Singaporeans who are unable to pay their premiums, even after subsidies, so that no one will lose coverage.

Sir, the Government's support for premiums for lower- and middle-income Singaporeans needs to be an important feature of CareShield Life to ensure that all Singaporeans can have coverage. We welcome the Government’s commitment to providing that support to lower- and middle-income Singaporeans.

Sir, more work remains to be done. For example, the initial cash payout of $600 per month under the enhanced scheme is higher than the $400 currently payable under ElderShield, but how much more long-term care it can help procure will depend on the mix of care alternatives available and how much they cost, such as home nursing, foreign domestic workers, a bed in a nursing home, a place in daycare centres and so on. For a real solution in providing long-term care to Singaporeans, quite beyond the payouts under a disability insurance scheme, such as CareShield Life, we need to develop an ecosystem rich in disability-care options, as well as effective policies that would nudge Singaporeans towards choices that meet not only individual demands for affordable and inclusive care, but also the public’s interests in sustainable care.

Mr Zainal Sapari.

Mr Speaker, first and foremost, I would like to thank the Committee and the Secretariat for this very important piece of work that they are doing. An American politician said: "Without health insurance, getting sick or injured could mean going bankrupt, going without needed care or even dying needlessly". And I think we can understand the context why the American politician said this. In America, they have yet to be able to strike a good balance in ensuring that the health of the population is taken care of.

I welcome the CareShield Life initiative as a step in the right direction to provide Singaporeans with an accessible, affordable means to plan for their long-term healthcare needs. This would benefit not just the aged in our population, but also the younger demographics who are increasingly aware of the importance of healthcare security for their future. I am also heartened by the efforts taken to ensure the scheme is inclusive by providing additional support to ensure affordability. But unfortunately, my wife thinks it is selective inclusivity. That said, based on feedback and queries from my engagement with unionists and grassroots leaders, there are some clarifications that I would like to seek from the Minister with regard to CareShield Life.

In terms of policy administration, I would like to ask the Minister the rationale of having the MOH to administer the CareShield Life Scheme. I understand from the White Paper that it simplifies administration and will be carried out on a not-for-profit basis. It is without a doubt that, by having the Government administer the policy, it would be easier to adjust the scheme as necessary. However, this then begs the question why was not the same considerations given when ElderShield was first introduced? The decision to have MOH administer CareShield Life implies that there are inherent drawbacks or disadvantages if the scheme is to be administered by private insurance companies. What are some of the key lessons that we have learnt from ElderShield that led to the decision for the new CareShield Life to be managed by MOH?

There is also this thinking that the private sector can be more efficient than the public sector in providing services or public goods. With MOH managing CareShield Life, would there be equal efficiency in the handling of insurance for Singaporeans?

The report also shared that MOH will monitor the scheme closely and make the necessary adjustments to the scheme. Would the policyholders be consulted before such changes, and is there the possibility of a lower payout being rendered in the future? Would the Government also consider increasing the percentage of premium subsidy provided, currently estimated at about 20% to 30%, to ensure affordability?

I believe that the CareShield Life scheme can provide a great opportunity to incentivise Singaporeans to lead a healthy and active lifestyle. Given the worrying statistics on issues like diabetes and our efforts to promote healthy ageing, we should leverage the CareShield Scheme Premium subsidies to promote Singaporeans to lead an active lifestyle. It is certainly better for a Singaporean not having to make a claim on his insurance and that starts with prevention by choosing a healthy lifestyle.

Under the proposed CareShield Life, claims are allowed once the insured is unable to perform three out of six essential ADLs. I do appreciate that setting a lower benchmark would mean higher premiums. However, can we consider a lower payout for Singaporeans affected with one or two disabilities?

Given our ageing population, long-term care will continue to be a pressing concern for Singaporeans moving forward. It is our duty as the Government to not only ensure that we can provide the best level of healthcare to our citizens, but also to make sure that their financial situation would not take a drastic turn due to expensive healthcare. While there are options to allow for existing ElderShield policyholders to convert to CareShield, could the Government consider converting all ElderShield policyholders and absorbing the additional premiums to do so? I know this will incur a huge Government expenditure but, it can also give Singaporeans peace of mind for the added healthcare insurance. Mr Speaker, in Malay.

(In Malay): [Please refer to Vernacular Speech.] I give my full support towards the national long-term care insurance scheme called CareShield Life that provides financial aid to those afflicted with severe disability.

This scheme is better compared to ElderShield that is run by the private sector. I would like to ask why the Government decided to administer CareShield Life, whereas the same decision was not made for ElderShield when it was launched some time ago.

Can the Government bear the costs to convert all ElderShield members to this new CareShield Life scheme? Many of those who had joined ElderShield will feel that they missed out on the benefits of CareShield Life and may not be able to afford the conversion to the new higher premiums.

I would also like to suggest that the premium rates to be paid should depend on the health of the applicant. This is meant to encourage them to take more proactive steps to look after their physical health.

(In English): Mr Speaker, in conclusion, given our ageing population, long-term care will continue to be a pressing concern for Singaporeans moving ahead. It is our duty as the Government to not only ensure that we can provide the best level of healthcare to our citizens, but also to make sure that their financial situation would not take a drastic turn due to expensive healthcare. A few years ago, the Government announced MediShield Life which managed to give much assurance to many of us who are concerned with our ability to shoulder unexpected high hospitalisation costs. CareShield Life is another step in the right direction that would provide added peace of mind for many of us. I support the Motion.

Mr Gan Thiam Poh.

Mr Speaker, Sir, first of all, let me thank the Committee for the good effort in coming up with this report. I personally welcome the CareShield Life Scheme as it will provide those afflicted by severe disabilities higher payouts for life, compared to ElderShield. This is a good scheme which will benefit Singaporeans as the financial aid will provide an additional layer of social security. CareShield Life is particularly relevant for a rapidly ageing society like ours. We will face, in the near future, every one out of four Singaporeans who is 65 and above, in view of the increasing number of these age-related disability cases to be expected.

I would like to ask the Government to consider automatic conversion of all existing ElderShield policyholders aged 40 and above to CareShield Life, while providing them the option of remaining in ElderShield 300 or 400. Under the proposed plan, only policyholders aged 41-50 in 2020 and who are not severely disabled will be auto-enrolled. I believe that this scheme will be accepted by most Singaporeans. Why? Because the lifelong coverage and higher payouts are major improvements upon ElderShield’s benefits. Therefore, the auto-conversion will provide convenience to ElderShield policyholders of all ages, compared to requiring them to sign up for CareShield Life. The proposed participation incentives can be converted into subsidies for the various age groups.

I also hope that the Government will allow ElderShield supplement policyholders, who have already paid additional premiums for higher or longer monthly payouts, to port these premiums to their new CareShield policies. Once on CareShield, interested Singaporeans may have the option to approach private insurers for additional coverage and payouts. Instead, may I suggest allowing CareShield policyholders the option of higher payouts if they can afford the additional premiums? As CareShield Life will be administered by the Government, compared to coverage from private insurers, it will provide greater assurance.

I request that CareShield Life be made an opt-out scheme so that all who have previously opted out of ElderShield will be covered this time under the new scheme. If they should want to opt out of CareShield Life, they need to provide valid reasons, such as having similar disability insurance coverage with private insurers.

Next, may I ask the Minister, on average, based on past data, how many Singaporeans have suffered severe disabilities before the age of 30? Can we also explore the idea of starting disability coverage from the age 21 and extending coverage grants to National Servicemen to show our appreciation for their services to our country?

In addition, I would like to suggest that we recruit Singaporeans, as we did for PG, as Ambassadors to visit individuals and households who have opted out of ElderShield or CareShield to explain and assure them of the support by the Government, including financial assistance, to encourage them to join the new scheme. The grassroots organisations (GROs) can work with the volunteers to identify and offer all necessary assistance to the households who need financial help and also encourage them to stay in the scheme. Mr Speaker, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] CareShield Life is a good plan to provide more protection for Singaporeans with severe disabilities with lifetime cash payouts. This helps to pay for long-term care and reduces the financial burden on patients and their families.

The scheme is generally supported by residents, but some have expressed confusion about the names of various Government programmes, in particular, CareShield Life and MediShield. The Chinese names of these two schemes are too similar, with only one character difference and, especially for the elderly, it is not easy to spot the difference.

In order for me to explain this new scheme easily, I have tried different ways. Many people do not want to listen, because they feel this topic is "inauspicious". I tried to use a simple name to explain this scheme – "Ping An 123" (Peace 123). Why call it "Ping An 123"? "Three" symbolises coverage from age 30; "two" for the benefit of two parties, that is, the patient and their caregivers, hence, both the family members and the patient will benefit; "one" for lifetime payouts, every month you would receive payouts until recovery or death. That is why I call it "Ping An 123". It does not sound inauspicious. With this insurance, you will have peace of mind until death.

Anyway, I hope that Singaporeans can stay healthy, exercise more and prevent diseases. Because if you fall ill, it is you yourself who will suffer. Every resident says to me that they do not want to burden their family members. Precisely because we do not want to burden our family members that I encourage them to consider joining CareShield Life.

Assoc Prof Daniel Goh.

Mr Speaker, Sir, the aims of the Government in designing CareShield Life to be inclusive, affordable and sustainable are ambitious and impossible to disagree with. But I am concerned that the three aims make up an impossible trinity. This is what economists would call a trilemma. It means that, no matter how well and enlightened the design may be, it is impossible for CareShield Life to be inclusive, affordable and sustainable at the same time. I would like to raise three issues in this regard.

The first issue is that CareShield Life compromises inclusivity in two ways. The first concern with inclusivity is that women pay significantly higher premiums compared to men, 25% higher. I find it objectionable that women are being penalised for something that is not within their control, being born women, when lifestyle choices within the control of individuals are not being treated as risk factors for premium calculation.

CareShield Life is to be a publicly administered compulsory insurance providing for universal social protection. This means that, unlike privately run insurance schemes, risk-pooling should be done in such a way as to maximise the utility of social protection for all groups. Why then are we splitting the population divisively into men and women? Why are men paying only for fellow men who become disabled, and women paying only for fellow women who become disabled?

I have said this for CPF Life payouts and this bears repeating. I believe Singaporean men, who are husbands, fathers and sons, would not begrudge risk-pooling to subsidise women who would have done so much unpaid care-work out of love as mothers, wives and daughters, and who would have far lesser savings than men in general.

The second concern I have with inclusivity the auto-enrolment of ElderShield members aged 41-50 in 2021 into CareShield Life with the option of opting out. Why limit auto-enrolment to this age band? Why not extend auto-enrolment to ElderShield members aged 51-60 and above, which would cover all the ElderShield members? Is this because the older ElderShield members have less MediSave savings to cover the base and catch-up premiums they have to pay to join CareShield Life? But the Government is already committed to helping existing ElderShield members through subsidies and other interventions. So, why not enrol the other cohort, too?

My concern is that this division in auto-enrolment between those in their 40s and those in their 50s and 60s would create a lost generation of retiring workers with less protection for long-term disability when they are the ones who would need it most in the coming decade of the ageing society.

The second issue is that in trying to be affordable and inclusive, is CareShield Life compromising on sustainability? I find it hard to square the argument that with the Government administering CareShield Life, we will get better economies of scale, when the same Government has been saying that farming out ElderShield competitively to three private insurers is a cost-effective system. I do believe that a publicly administered social insurance scheme can do better than the three private insurers. But this begs the question: why was ElderShield farmed out to the three private insurers in the first place?

The Minister does not seem to think the private insurers have profited handsomely in the answer to my February 2017 Parliamentary Question on ElderShield premiums and surpluses. But clearly, there is a difference, or else the Government would not be going for public administration of CareShield Life. So, what is the difference between the old ElderShield model and the new CareShield Life model, in terms of costs, profits and surpluses? This is not an academic question of public policy analysis or a question of history, as ElderShield will still be around.

This ties into my other question here about limiting auto-enrolment to ElderShield members aged 41-50. Would not allowing the older cohort to continue with ElderShield as administered by private insurers mean that their interests are being compromised, if public management is better? If most existing ElderShield members make the switch to CareShield Life, would not this make a much reduced ElderShield membership pool unsustainable for a competitive system of three private insurers? Would this end up penalising the remaining ElderShield members? Why not nationalise ElderShield altogether and make the safety net truly universal, clear and clearer?

The last issue is that in trying to be inclusive and sustainable, is CareShield Life compromising on affordability? I was shocked to read in the opening of the ESRC Report that one in two healthy people aged 65 and above today could become severely disabled in their lifetime. On what facts is this statistic based on? Is this 50% statistic used in the actuarial model to derive the premiums? One thing for sure, the health profile and, therefore, disability risk profile of younger cohorts, to be covered by CareShield Life, would not be the same as the older cohort today. The younger cohorts should lead healthier life, given better nutritional, lifestyle, environmental and healthcare conditions. As such, is 50% chance not an extreme profiling of the population in terms of severe disability risk?

Mr Speaker, Sir, it is impossible to disagree with the impossible trinity. So, what can we do? In the end, it is a matter of balance and tradeoffs between the three aims and the Government has to explain this in greater detail and clarity to an educated public who wants to know the deal they are being compelled into. While we support the Motion, the questions I am asking here are intended to achieve this, namely, greater clarity on the tradeoffs that the Government has decided on with CareShield Life.

Nonetheless, after all, the tradeoffs have been made, I hope the Government would step in to support and subsidise needy groups when necessary to make sure the CareShield Life balancing act does not exclude or disenfranchise any Singaporean. This is especially since social risk-pooling would mean the Government would save on providing direct social support to the needy. It would be most uplifting for our vulnerable fellow citizens to know that they are being supported and carried up by their fellow Singaporeans with the help of the Government.

Er Dr Lee Bee Wah.

Mr Speaker, Sir, I fully support the Motion and I congratulate the Committee for doing a very thorough job in its review. There are but a few points which I would like to raise, one of which is: why is it that women have to pay a higher premium for CareShield Life? I know there is this "gender rating" which is somewhat similar to car insurance where teenagers are made to pay a higher premium as they are seen as higher risks because of their age and lack of experience. However, in the case of CareShield Life, I think the argument that women have childbirth and they tend to live longer lives should not apply. I feel, with the advancement in medicine, the risk during childbirth is very minimal. According to the Registry of Births and Deaths, maternal mortality or the death of a mother during childbirth, is relatively rare in Singapore. The figure was 4.8 per 1,000 births in 2016, down from 7.1 in 2015.

It has even dropped to 2.3 per 1,000 births before. One can argue that men go for more dangerous sports and they are a higher risk. I would want to believe that women are just as careful with their health, if not more careful than men.

Secondly, can the Minister clarify the amount of payout a person is entitled to increases annually until age 67 years, or until a person makes a claim? Why is there no increase after the claim is made? Surely, after the claim is made, inflation and the rising of medical costs still goes on.

Next, could the Minister explain what are the actuarial considerations for the exclusion of any person with pre-existing conditions for conversion from ElderShield to CareShield Life? Presumably, this is because the inclusion of people with pre-existing conditions will increase the number of claims and thus increase the premiums everyone else needs to pay.

But can this not be addressed by excluding the claims related to their pre-existing conditions, while allowing them to claim for other conditions? For example, in 2003, when I went for a major operation for colon cancer, the insurance company did not want to insure me. But five years later, they said I can be insured, but anything related to cancer, not covered. I think this same principle can apply.

From statistical studies, can the Minister share with the House what percentage of the elderly is likely to suffer from disability of one form or another? I believe this would need another exercise to warn the elderly to take precautions at an age when they are most vulnerable so that they can avoid disability where possible. Mr Speaker, Sir, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] The launch of CareShield Life has put many Singaporeans’ minds at ease. I have several clarifications to seek.

First, after a person has made a claim from CareShield Life, the amount of payouts will cease to increase. However, he continues to face inflation and the rise of medical costs. Why then can the payout not also increase in tandem?

Second, for those with pre-existing conditions, they cannot convert from ElderShield to CareShield Life. I understand that the inclusion of people with pre-existing conditions will increase the number of claims, thus increase the premiums that everyone else needs to pay. However, can we consider excluding claims relating to their pre-existing conditions while, at the same time, allowing them to still join CareShield Life?

Third, and also the most important point: why are the premiums for women higher? Why?

In Nee Soon South, very early in the morning, we see many women going to National Trades Union Congress (NTUC) FairPrice, Sheng Shiong and the market to buy daily necessities that their family would need. They carry many bags of fish, meat, vegetables and fruits and bring them home. After that, they will hurriedly go to work. Housewives would be busy with housework all day long. During the weekends, many of those who join community club activities are also women, taking part in Zumba, line dancing and so on. Therefore, the fact that women live longer should not be a surprise to us. They love life; they love their family. I am sure that men here in this Parliament would also agree with me that women should pay the same premiums as men. After all, insurance is about risk-sharing. We enjoy happiness and face difficulties together. Do you not agree, gentlemen? Thank you.

Mr Png Eng Huat.

Mr Speaker, the 2018 review of ElderShield is timely for our ageing society. At the launch of the scheme in 2002, more than a third of eligible Singaporeans and Permanent Residents aged 40 to 69 opted out of the scheme. For some reason, the share of eligible residents not covered by ElderShield remained roughly the same, 15 years later, in 2017.

I did not find the benefits of ElderShield meaningful and assuring back in 2002. Even after the scheme was reviewed in 2007, my opinion of the scheme remained unchanged.

The current review, however, is a step in the right direction. The proposed lifetime payouts, for as long as the claimant remains severely disabled, will provide greater assurance for claimants and their families.

Similar to the review done in 2007, the definition of "severe disability" was left untouched again in the review of 2018. As Ms Sylvia Lim has pointed out earlier, I also find the criteria to file a claim under ElderShield too strict to begin with.

A 2018 review report on ElderShield has a passing mention of some focus group participants suggesting some payouts upon mild or moderate disability instead of upon severe disability, but that suggestion was glossed over with a statement that the Review Committee preferred to prioritise, and I quote, "critical benefit enhancements to payout duration and quantum" in order to keep the enhanced scheme affordable.

Mr Speaker, not being able to do just one of the six ADLs is already a challenge for most of us in this House, yet one must demonstrate the inability to perform three ADLs in order to qualify for benefits under ElderShield.

If anyone of you is unable to eat on your own and use the toilet on your own, you are not deemed severely disabled. If you are unable to move from room to room or move from a bed to an upright chair on your own, you are also not counted as severely disabled under ElderShield. How is that so?

Sir, I support Ms Sylvia Lim's call for the Government to review the definition of “severe disability”, specifically to consider reducing the three-ADLs criterion.

The proposed enhanced plan, also known as CareShield Life, is recommended to be compulsory for all adults and for contribution to start as young as from age 30. It will have the legislative backing and muscle to achieve risk-pooling coverage at an unprecedented scale. Thus, it is able to offer not just better benefits, but a more inclusive definition of severe disability as well. Why was this part of ElderShield not put under any review?

It is stated in the review report that many of the projections and parameters for formulating the enhanced scheme are based on local data and supplemented by international data. Did the Committee review any international data on the approach to define severe disability versus ElderShield’s definition, which has remained unchanged since 2002?

If Japan, which has the highest percentage of senior citizens in the world, is deemed the most lenient in claims criteria for long-term care insurance across countries compared in the review report, would that make Singapore the least lenient then, looking at the comparison? And, why is that so?

The 2018 review of ElderShield calls for expanding the insurance coverage to achieve greater inclusivity. Would it not be reasonable to expect the enhanced scheme to have a more inclusive definition of severe disability as well? Surely, inclusivity must also mean helping more people stricken with disability, beyond achieving universal coverage for all.

Next, it was stated in the review report that premiums for the proposed CareShield Life should be adjusted regularly to take into account changes in payout quantum and claims experience. It also lists investment returns on the insurance fund as one of the factors affecting the pricing of premiums.

Sir, I do not believe Singaporeans should be made to bear higher premiums due to bad investment returns on the insurance fund of CareShield Life. CareShield Life is supposed to be self-funding based on actuarial calculations and risk-pooling approach. The insurance fund accumulated should not be invested in high-risk instruments to begin with.

The report also acknowledged that the role of insurance should be strengthened to play a more prominent part to help Singaporeans prepare for their long-term care needs, while Government subsidies, personal savings and family support will continue to be the main source of support in this area. With the proposed transformation of ElderShield to CareShield Life, could the Minister reveal how much, in percentage, the Government is targeting for the proposed scheme to contribute to the projected cost of long-term care in Singapore when it is made compulsory for all in 2020, and how much would the Government subsidies come down correspondingly as a result?

At this point, I welcome what the Minister said earlier in allowing members to withdraw cash from their MediSave accounts to support their long-term care needs. I have one clarification to seek on this point. Can someone who is deemed not so severely disabled by CareShield Life apply for such withdrawal, that is, that person can only perform two instead of three ADLs?

CareShield Life is superior to ElderShield in many ways. Universal insurance coverage is also a good thing but it should not be oversold with projections and assumptions that are bordering on paranoia. I wish to ask the Minister how the premiums for CareShield Life are determined. Is it based on a doomsday scenario that one in two healthy Singaporeans aged 65 today could become severely disabled in their lifetime or based on actual claim experience from ElderShield?

As rightly stated in the review report, "it is challenging to accurately project claims experience, longevity and disability trends decades in advance." So, there is no need to stress and repeat that half our population could become severely disabled in time to come just to bring CareShield Life into existence. I note the Minister's explanation on this rather depressing statement. Based on what the Minister has said, all of us would be severely disabled in our lifetime anyway, when we are nearer our deathbed.

I believe CareShield Life can stand on its own merit. The only thing left is for the Government to be transparent with the actuarial calculations for premiums since the proposed scheme is meant to be not for profit. On this note, I urge the Government to release the actuarial computation report and the thinking that went behind the formulation of the premiums for CareShield Life.

Mr Murali Pillai.

Mr Speaker, Sir, I applaud the Government's decision to accept the recommendations of the ESRC to enhance the financial assistance rendered to disabled Singapore residents having long-term care needs through CareShield Life. I also wish to add to the messages of congratulations to the ESRC for rendering a very thoughtful report.

I note from the speeches made by Members before me that these recommendations have broad support from both sides of the House. In particular, two main features are noteworthy, as stated by hon Members: the payouts for life as opposed to the current five or six years under ElderShield 300 and ElderShield 400. This is welcome because medical improvements have increased and will continue to increase the lifespan of our disabled residents.

The second feature is, of course, the increased payouts over time, starting from $600. Building in a mechanism to increase the payouts over time will allow the payouts to keep up with inflationary pressures.

Some hon Members have suggested that the $600 per month may not be enough. In my view, we need to look at all the other schemes that come into play, for example, the concessionary Foreign Domestic Worker (FDW) levy of $60 per month, so that the full picture of support that the Government gives can be appreciated.

The consequence of the enhancements has resulted in the adoption of the universal coverage so that there is risk-pooling and the premiums are kept affordable. I support this approach, subject to the case made by the hon Member and Chairman of the GPC for Health, Dr Chia Shi-Lu, on equalising premiums payable by males and females. This point was echoed by several other Members. The point was probably put across more colourfully as well.

I find it comforting though that MOH has categorically stated that no one would lose their CareShield Life coverage due to financial difficulties. The set up of the ElderFund and the provision of premium subsidies are a step in the right direction.

Some hon Members have asked for requirement of three ADLs to be dropped to two ADLs, justifying it on the basis of the current low claim history and the opportunity arising from risk-pooling. I understand where they are coming from. However, I read in the committee report that one in two Singaporeans may become disabled some time in their lives. I am, therefore, concerned about the impact of easing this requirement on the premiums. Would the premiums remain affordable? If not, how much more subsidies are expected from the Government, and what would be the financial impact of providing more subsidies than what is currently contemplated? A clarification on these issues will be welcomed.

I have three questions: first, what is the average life expectancy of disabled residents who are able to make a claim under the current ElderShield and how is this expected life expectancy of such residents expected to increase in the coming decades?

Second, how does the assessment of disability by reference to ADLs apply to mentally disabled Singapore residents? As may be recalled by Members of this House, I asked MOH and MSF in this House to reconsider the application of the ADL criterion with respect to the provision of concessionary FDW levy for mentally and intellectually disabled residents. MSF and MOH announced earlier this year that for such residents, they have introduced the Client Assessment Form (CAF) to assess such residents' cognitive disability.

Can a similar approach be taken vis-a-vis CareShield Life, please? Ultimately, the mentally disabled and physically disabled residents are in the same boat as they are unemployable, need to be taken of by their caregivers and, therefore, would benefit from CareShield Life. Some mental conditions can be linked to physical conditions, for example, dementia. But some are not, for example, Autism Spectrum Disorder (ASD). I am aware of several families in Bukit Batok who have severely autistic children and are concerned about their long-term care needs, and they may benefit from the more flexible approach. At the same time, I recognise that there is a need to deter the making of false claims because such claims would, in effect, raise premiums. So, what safeguards would be put in place to make sure that no false claims are filed and processed?

My last point, Mr Speaker, Sir, what is the status of Singapore residents who subsequently lose their Singapore citizenship or residency? In this regard, I note that the system, as promulgated, is only made workable as a result of Government resources and money being spent to run the insurance system and provide premium subsidies in additional support to Singapore residents. What would be the position of Singapore residents who lose their residency or Singapore citizenship status?

I see two scenarios because the coverage under CareShield Life and cash payouts are for their entire lives. One scenario is where Singapore residents who make payment of the premiums until they reach the age of 67 and they do not need to make premium payouts anymore and, subsequently, they give up their Singapore citizenship. Would they still be allowed payments under this scheme?

Another scenario, which I think is less likely, is where Singapore residents receive CareShield payouts and then lose their residency or citizenship. A clarification on these points would be most welcome.

Mr Leon Perera.

Mr Speaker, Sir, CareShield Life represents an extension and qualitative shift in the old Eldercare scheme, towards lifelong care and protection using the principle of universal, mandatory risk-pooling to lower costs to everyone. Any one of us may be stricken with disability in old age. There are many of us who have been. Many more will be. We should not leave Singaporeans to bear the ravages of genetic roulette on their own.

Risk-pooling is a sensible way to address the increasing incidence of chronic disease and disability that come with an ageing population. Risk-pooling stands alongside the other policy prong that is needed here, of course, which is prevention in the form of encouragement to living more healthily, health screening and so on.

Sir, the Workers’ Party supports the principle of risk-pooling. On the whole, the merits of long-term care insurance far outweigh the downsides.

I agree with the other points made by Workers’ Party Members, in particular, the point about gender equality made by Ms Sylvia Lim, Mr Pritam Singh and Assoc Prof Daniel Goh. I will focus my speech on a few themes – affordability, transparency, efficiency and creating more options for the payouts to be spent for maximum effect.

Firstly, affordability. Are premiums set at the right level such that the capital adequacy and medical loss ratio for the scheme is aligned with similar government schemes elsewhere in the developed world?

No doubt none of us has a crystal ball. But have premium levels been set such that we are not likely to accumulate unexpectedly high levels of reserves relative to payouts in future?

One sentence in the Eldershield report read: "One in two healthy Singaporeans aged 65 could become severely disabled in their lifetime and may need long-term care." Were premiums set based on the assumption that one in two healthy Singaporeans aged 65 will become severely disabled in future? This would appear to be a pessimistic assumption given that, for example, in the United States (US), the comparable figure, based on one source, is 35.4%, based on a definition of disability that would appear to be far wider than the criteria specified for payouts under CareShield Life.

Tied to this is another point: have premium rebates been factored into the calculations for premiums and payouts? Some long-term care schemes do actually build future premium rebates into the actuarial model that determines premiums and this practice is not necessarily wrong. However, how do we guard against the possibility that the calculations have over-reserved for future premium rebates and, hence, have set premiums too high for the current generation?

Also, on affordability, the report states that those who cannot afford to pay premiums even after means-tested subsidies will be given additional help. Some individuals may have a per capita household income that disqualifies them from many financial assistance schemes but may also have a very high expenditure profile for reasons out of their control, such as their medical situation. How will such cases be evaluated for additional help?

This leads me to my second broad point, which is transparency. What assumptions were made about how many residents will become disabled? What was the basis for these assumptions – data on chronic disease incidence coupled with data on demographic projections?

I would like to ask the Government to publish the actuarial model behind the setting of premiums such that Singaporeans can assess these assumptions and can be aware of how these assumptions track against future realities as the years go by.

Milliman Limited and Deloitte Actuaries and Consultants, respected global professional firms, contributed to the report, the latter being the appointed actuary of the MediShield scheme. I do not expect the actuarial model used to be suspect. However, the assumptions and policy decisions behind any model can and should be subjected to reasonable public scrutiny and debate.

Related to this is the question of what if payouts fall below assumptions? Premium rebates will no doubt be given. In the executive summary of the ElderShield report, it is stated: “An independent council should be set up to advise the Government on premium and payout adjustments in accordance with an actuarially sound adjustment framework.”

According to page 88 of the ESRC Report, in the context of the existing ElderShield scheme, the premium rebate is a feature that provides for the three insurers that administer ElderShield to return 50% of any accumulated surplus to existing ElderShield policyholders, if the actual claims experience turns out to be better than what was projected. Premium rebates are considered once every five years.

For CareShield Life, will premium rebates be discretionary or mandatory? From the report, it would appear that awarding such rebates will be up to the independent Council and there is no mandatory rule on awarding premium rebates.

How do we ensure that the independent Council does not over-reserve funds from the current generation’s premiums for future generations, and makes the right determination on what is fair intergenerationally? Can transparent rules be adopted to guide them?

Thirdly, on efficiency, the report recommends that the Government administer the scheme, unlike ElderShield which is operated by Aviva, Great Eastern and NTUC Income. There could be efficiencies in having the Government operate the scheme, as the profit motive is absent and there are greater potential economies of scale from administering the entire pot of funds centrally. On balance, this approach is sound.

However, there are also risks since the returns on existing reserves and the cost of administration are not subjected to competitive market discipline. How will the Government ensure that the funds are managed efficiently and that administrative costs will be minimal? Will there be rigorous benchmarking of administrative costs of private insurers and those of other benchmark-worthy government schemes in developed countries? What strategies will be used to invest the funds accumulated in the reserves to earn a reasonable return while adopting low risk?

The ElderShield report mentions that CPF Board should be engaged for administration of the scheme. Would the practice of investing reserves through the issuance of bonds to the Government of Singapore Investment Corporation (GIC) be pursued for CareShield funds, as is currently undertaken, in part, for CPF monies?

Finally, Mr Speaker, Sir, let me speak on the subject of creating more options for the payouts to be spent for maximum effect. This debate should not only be about the quantum of premiums and payouts. It should also be about how we create an ecosystem rich with options for those who receive payouts to spend them with optimum effectiveness for themselves and society. Right now, the elderly disabled have various options for managing their condition. They can subsist based only on family care or self-care at home. They can hire an FDW. They can enter a nursing home. Or they can enrol in an integrated home and day care package. There could be other options as well.

Of these, perhaps the one set of alternatives within the ecosystem that has the most room for further consideration and development is day care, home care, as well as integrated home and day care (IHDC). I know that various IHDC trial schemes and initiatives are underway and that the Agency for Integrated Care (AIC) started IHDC pilots in 2016. But IHDC is as yet not widely prevalent.

Home care, day care and IHDC have the potential to yield strong benefits in terms of: firstly, enabling the elderly to still live with their family in many cases, which is immensely meaningful; secondly, allowing family members who play some caregiving role to work during the day, thus enhancing our labour force participation rate; thirdly, limiting the growth in the foreign worker population, if local full-time and part-time employees and volunteers are optimally engaged; and fourthly, enabling the elderly disabled to remain within the communities to which they have grown attached.

In Hong Kong, most people have an elder day care centre within a few kilometres of their home. The Hong Kong Social Welfare Department lists around 80 day care centres and units on its website. This contributes to a good universal long-term care network as it enables optimum caregiving in situ, as being close to home, and familiar neighbourhood social support networks can help to make for quality eldercare.

In Singapore, one huge advantage we have on this front is the presence of Housing and Development Board (HDB) void decks, which can be used for day care centres that do not incur exorbitant private rental costs. I would like to ask what is the current status of our push to develop home care, day care and IHDC as viable and ubiquitous options within the elder-care ecosystem in Singapore. In particular, for day care, take-up may depend on the proximity of day care centres to homes. Are the number and availability of day care places trending in the right direction to make this a viable option in future? What have been the results thus far in terms of nudging Singaporeans to take up full-time or part-time employment in this sector, as well as to volunteer with the voluntary welfare organisations (VWOs) which provide many of such services?

In conclusion, Mr Speaker, Sir, we need to address the various problems and gaps in the current CareShield proposal, such as the gender imbalance that many Members have spoken of and the other points my colleagues and I have touched on. Doing so would make CareShield a meaningful part of this nation’s response to ageing and to the imperative to create a fairer and thus better society for all Singaporeans to call home.

Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 4.15 pm.

Sitting accordingly suspended

at 3.50 pm until 4.15 pm.

Sitting resumed at 4.15 pm.

[Mr Speaker in the Chair]

[(proc text) Debate resumed. (proc text)]

Ms Joan Pereira.

Mr Speaker, Sir, thank you for the opportunity to speak on this Motion. First of all, I would like to record my sincere appreciation to ESRC for the immense hard work. Thank you.

The elderly and vulnerable are groups of Singaporeans whom I hold close to my heart. And CareShield Life is, in my opinion, a scheme that is crucial for their well-being. As Singaporeans live longer lives, this also means the increased probability of having a severe disability that requires long-term care. And with more Singaporeans having few or no children, it would also be unrealistic to completely rely on the younger generation to pick up the tab.

When I go on my walkabouts and during my Meet-the-People sessions, it is a common sight to see wheelchair-bound residents going about with a caregiver, often, an FDW, in tow. These senior citizens are the more fortunate ones. The less well-off are home-bound, constantly being cooped up, which hampers one's well-being.

To continue having a quality of life even with severe disability, it is important to have adequate funds to tap on in old age. CareShield Life will ensure that with a largely affordable annual premium per year, policyholders will have an income for their daily and care needs even when they are unable to work. I am pleased to note that the Committee has made a change to the nomenclature for ElderShield, which I had advocated many times previously. The new name CareShield more accurately reflects the core of the scheme, which is to become a key pillar of Singapore's social safety net, giving care to all Singaporeans regardless of their age and background.

Some young people are indignant about having to start as early as 30 years old. There has even been talk that this is a ploy to get the young to pay for the old. The opposite is the truth. For one, severe disabilities can happen to anyone at any age. All it takes is one freak accident or serious illness. Secondly, in order for premiums to be affordable, they have to be spread out over a longer period of time. It would be crucial to note that premiums only have to be paid for until one has reached the age of 67, after which, the insured will continue to receive lifelong coverage. This is a factor that is lacking in many private insurance schemes, and this is why there is a need for CareShield Life to shore up and fill up the gaps. It is good practice to start taking ownership of one's health from a young age.

And to reward those who do so, I wish to recommend offering incentives on top of what will be given, such as a discount on premiums for the following year, for those under ElderShield 300 and ElderShield 400, who had not made prior claims. This will encourage them to opt into it. It also reinforces the notion of taking responsibility for good health. In cases where patients recover from their disabilities, there must be proper communication and follow-up with them on their health and financial status to ensure a smooth transition.

This process must be handled with sensitivity and with compassion, as the claimants adjust from the position of receiving monthly CareShield payouts, to the state of the termination of payouts. Furthermore, in order to remain covered under CareShield for the future, these recovered policyholders have to resume premium payments. The healthcare institution where he receives rehabilitation would have the relevant records, and their cooperation is essential so that CPF Board receives the necessary updates without inconveniencing the policyholder.

I note that a Panel is consulted with regard to adjustment of premiums. Understandably, actuaries who work with the insurance profession will be consulted for their expertise. I would request that social workers, healthcare workers, VWOs and people who work with the disadvantaged be invited to join the Panel to share their observations and opinions. Healthcare professionals could offer precious input on health matters, such as the average remaining lifespan and needs of a severely disabled person.

For policyholders who cannot afford to pay premiums even after premium subsidies, I am glad to note that they can apply for assistance from the Additional Premium Support scheme. While CareShield Life will be mandatory for those who will be aged between 30 and 40 in 2020, encouraging those who do not fall into this group to sign up for it will be a big challenge. I note that younger ElderShield 400 policyholders aged 41 to 50 in 2020 will be auto-enrolled into CareShield Life, and they may opt out and have their premiums returned within two years of auto-enrolment should they wish to. The Government is also offering participation incentives spread over 10 years to entice existing cohorts to opt into CareShield Life. Despite these incentives, the calculations are complex at a glance and, if money is a concern, some people may think it is simply more cost-saving to stay on ElderShield or for those who had opted out of Eldershield, not to sign up at all.

As mentioned earlier, I hope the Government will consider my recommendation of offering additional incentives to ElderShield 300 and ElderShield 400 policyholders to get onboard CareShield Life. Sir, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Meanwhile, older Singaporeans are expected to pay a base premium and a catch-up component on top of their yearly premiums. While this is reasonable, I fear that they will be turned off by the idea of having to pay more at an age when job stability is a concern, and this is the very group that is most vulnerable and susceptible to disabilities.

We need to start a comprehensive public education campaign to convince Singaporeans about the necessity of CareShield Life. The Government has shared detailed plans on incentives, procedures and premiums for taking up or switching to CareShield Life. However, the general consensus is that, on top of MediSave, MediShield Life and Integrated Shield Plans (IPs), it is all too complex even for the average literate Singaporean. Imagine how confused the older, less educated people, who would stand to benefit most from such policies, would be.

The Government must provide resources for people to turn to for advice and guidance. Preferably, these education campaigns should involve counsellors who can offer advice on the importance and responsibility of preparing for retirement. There should be qualified professionals who can provide a free one-on-one consultation session to explain and compare the various Government insurance policies.

(In English): With regard to platforms for the education campaign, we have to bear in mind that people these days have little time for the newspapers. They prefer to rely on social media, and simply just skim through the headlines. The Government must reach out to all age groups, both young and old, using appropriate platforms without trivialising the subject matter.

One crucial factor to consider is that some people would have purchased private insurance policies for disabilities, and they would be concerned about whether they would be paying unnecessarily for overlapping coverage. Especially for those on a tight budget and can only afford one policy, would it be wise to give up their existing policy in light of CareShield? Would CareShield be adequate to address potential needs? If the Government could work with private insurers, as with the case of IPs, integrating a CareShield component into relevant insurance policies and allowing MediSave payments for that component, I think it will be a welcome move.

For those who can afford to pay for an enhanced component, this would also spur insurance providers to improve their plans and provide better coverage. The Government could moderate integrated policy premiums so that they remain reasonably priced.

In conclusion, Sir, CareShield Life is a scheme that empowers Singaporeans, regardless of their economic situation, to maintain financial independence without being a burden to loved ones. Nevertheless, it is human nature to be sceptical of matters that one does not fully understand. I urge the Government to step up on outreach programmes to help as many Singaporeans as possible to benefit from this scheme.

Mr Melvin Yong.

Mr Speaker, I stand in support of the proposed CareShield Life, which seeks to ensure that all Singaporeans will be protected by insurance and receive some basic financial aid, in the event that one should end up with a severe disability later in life.

I am happy to note that CareShield Life delivers upon a big improvement from its predecessor, the ElderShield, by providing higher payouts for life. This provides better protection to those suffering from disabilities, as I am sure that with a better living environment and better medical care, there will be more who will outlive the six-year limit on payouts under the current ElderShield. But while CareShield Life is an improvement, I do have some concerns that I would like to raise.

First, let me touch on the qualification for payouts. The proposed CareShield Life provides payouts for those deemed to be suffering from "severe disabilities" and this is defined as a person being unable to perform three of the six ADLs. I would like to ask the Minister, why start considering people as severely disabled only when they are unable to perform at least three ADLs? In many cases, being unable to perform two ADLs, or even one ADL, such as the inability to transfer yourself from your bed to a wheelchair, would be considered a severe impairment to living life.

Mr Speaker, in the normal course of ageing, we would find that the inability to perform basic ADLs would start gradually and increase progressively. I would like to ask the Minister if there are ways, in addition to CareShield Life, that we could identify and intervene early, and provide assistance to those who gradually lose the ability to perform ADLs. Because in some instances, help may come too late if we wait until one loses his ability to perform three ADLs.

Second, I would like to ask the Minister if MOH knows how many Singaporeans who have at least three ADLs today and are currently under ElderShield coverage have made claims or are receiving payouts? How many have not? My point is how can we help to ensure that those who are severely disabled, who are the most in need of the payouts, would have an easy time qualifying for them? Would they have to travel to the hospital to be assessed, or could local GPs do house calls to make the assessment? How many GPs are there currently qualified to make such house calls, and how can we simplify the assessment process so that those in need would not have to wait for an inordinate amount of time before receiving their payouts?

Third, I would also like to also ask how did the Committee decide on the payout quantum of $600. Many residents whom I spoke to question if $600 would be a sufficient amount, taking into consideration the challenges faced by one who is severely disabled, one who has inability to perform three ADLs. It is not difficult to imagine that those defined as such would require the constant help of a caregiver. But $600 would be insufficient to pay for the employment of one domestic helper.

Next, I would like to touch on the transitional subsidies. As part of the initial rollout of CareShield Life, the Committee has proposed to provide transitional subsidies of up to $250, spread over the first five years, to help Singaporeans ease into the new scheme. What is the rationale for providing the subsidy only for the first five years after the introduction of CareShield Life? What about those who will be 30 years old from 2025? Should they not also be eligible for such transitional subsidy? Would the Ministry consider making this transitional subsidy permanent, beyond the first five years, for future cohorts of Singaporeans?

Finally, I would like to raise a couple of concerns regarding possibly causing unintended consequences through implementing CareShield Life as it is proposed right now. Firstly, as many Members have already spoken on it, women will have to pay higher premiums than men. It is projected that premiums for women will be around 25% higher than those for men of the same cohort.

According to the 2017 Labour Force Report by the Ministry of Manpower, women are more likely than men to stay outside the labour force, and they made up 64% of residents outside the labour force in 2017. Family responsibilities were the top reason given which kept females outside the labour force. According to a study by a consumer research firm, Value Penguin, also released last year in 2017, men earn nearly 20% more than women in Singapore. And in some industries, this wage gap can be as much as 40%.

Mr Speaker, statistics show that labour participation of women is lower than men and, on average, women earn less than men. I am not a woman but, surely, we can find means to collectively offset the projected increase in healthcare spending for women due to their longer lifespan. Many Members have already spoken to ask for equality in premiums and I hope MOH can seriously consider having equal payment of premiums for both men and women.

Secondly, the looming uncertainty surrounding future premiums is concerning. While it is reassuring that the Government has guaranteed that no Singaporean will lose coverage due to the inability to pay their premiums, many are concerned if premiums will remain affordable in future. A recent news article reported that insurers offering IPs have made losses for the second year in a row. And with that, news reports say there is a possible increase in IP premiums in the years ahead. Would premiums for CareShield Life eventually become an expensive burden for Singaporeans?

Before I conclude, I would like to provide feedback on the public communications on CareShield Life. I have asked many residents what they thought of the proposed scheme. A common response is that the scheme is simply too complicated. Individuals do not quite understand how the scheme would impact them personally. How much premiums would I need to pay? Would my premiums continue to increase over time? What happens if I lose my job and cannot afford to pay the premiums for the period when I am unemployed? These questions often relate to personal circumstances.

Mr Speaker, as our MOH colleagues would know, I myself have sat through numerous briefings and presentations on CareShield Life. After each session, I find myself learning new information about the scheme. I am certain that our MOH officers are working very hard to communicate the scheme to Singaporeans. But the challenge remains that the scheme impacts individuals differently. Perhaps the Ministry can consider setting up a CareShield Life hotline or, in today's technology, a chatbot, to address individual's concerns and queries more comprehensively. With that, Mr Speaker, I support the introduction of CareShield Life.

Mr Christopher de Souza.

Sir, today we are debating an important topic. It will impact many people for many years, both in terms of care as well as costs.

Many countries the world over are grappling with increased healthcare costs. In Australia, the Productivity Commission considered healthcare spending to be Australia's greatest future fiscal challenge, with its share in gross domestic product rising from 6.5% to 10.8% in 2060. In Canada, a study by a non-partisan research institute projected a budget deficit, due to increased healthcare spending and income transfer to seniors by 2045. More urgently, a study by Japan researchers show that Asian countries are ageing more quickly than European countries, giving them less time to react or plan for social spending. Currently, Japan faces a 2025 problem when Japan's baby boomers hit 75 and older – the age at which government subsidies increase drastically. Already taking up one-third of the budget, healthcare spending in 2025 is projected to increase by about 30% from the spend in 2015, with a budget deficit problem commencing between 2021 and 2024.

Even though our social support system here in Singapore is structured differently from these countries, funding healthcare remains a pressing issue, and lessons from overseas remain relevant to us. The demand for long-term care in the event of a severe disability will go up, from 29,000 cases in 2014 to a projected figure of 69,000 by 2030. While private insurance that insure against disabilities focus on making up for the inability to work, long-term care is often overlooked or neglected. This may be because the possibility of being disabled does not cross a person's mind. Sometimes, it may be that there are other more pressing, urgent financial needs – the children's education, the parent's medical bills – these are legitimate needs.

But when it comes to a national policy of budgeting for the nation, we cannot just focus on our current needs. Solutions must possess foresight. And this is where I see CareShield Life coming in.

CareShield Life offers lifetime payouts in the event of a severe disability until recovery. ElderShield would give payouts up to six years. Even though this may be enough for more than half of the people who become severely disabled, three in 10 need long-term care for more than 10 years. Lifetime payouts make sure caregivers and individuals do not need to worry about what would happen if this source of help dries up before recovery. So, this is good.

Mr Pritam Singh raised the issue of affordability of premiums. Mr Chen Shao Mao did too, and Ms Sylvia Lim alluded to the fact that the Workers' Party will be addressing this point.

Do we want lower premiums? Yes, we all do. Do we want to ensure affordability of premiums? Yes, we all do. But how do we translate those wishes into reality? That is the harder job. Let us look at the hard facts to see what the Government will do to make the premiums more affordable for fellow Singaporeans.

Currently, the premiums are designed such that the annual MediSave contributions for most working households is sufficient to cover the premium entirely. This is so, even for the lower income. How is this achieved? Through subsidies and transfers. There will be transitional subsidies for the first five years so that people have a good runway to plan and reorder their budget if they need to. There will also be permanent means-tested subsidies of up to 30% to help lower- to middle-income Singaporeans. For those with a monthly per capita household income of $1,100 or less, it is a 30% subsidy rate. For those $1,101 to $1,800, 25%. For those with $1,801 to $2,600, 20%. This helps to balance premium affordability with the scheme's sustainability. Those twinned priorities of affordability and sustainability are of equal significance, equal importance, for our current Singaporeans and future Singaporeans.

Take, for example, Switzerland. In Switzerland, although the long-term care insurance is sustainable, affordability is a concern. In 2015, the average annual premiums were around $5,000. In contrast, what we are looking at is about $227 annual premium for males, for the sixth year in the scheme, for those who are 30 years old when the scheme was launched.

Furthermore, unlike Japan, where premiums start at 40 years old and continue to be payable until death, premiums for CareShield Life are only payable during the working years of a person's life, from 30 years old to the re-employment age of 67 years old.

Here is another statistic to show what the Government is doing to balance affordability with sustainability. The premium payout for those who become severely disabled for 10 years from age 67 to 76, the payouts received are about 12 times the premiums paid. And if the person was eligible for subsidies, payouts are about 18 times the premiums paid.

Yes, we want to ensure that premiums remain affordable even in the future. But the slew of measures I have touched on so far provides a formidable and financially sound precedent for the people who will be reviewing premiums in future to consider.

Essentially, I hope the message is that what the Government is stating today is to take care to ensure that there are measures in place to ensure premium reviews are done with caution and with a slew of measures to assist Singaporeans. And this is the way we do things in Singapore.

Furthermore, the White Paper recommends additional premium support by the Government beyond subsidies as the last resort to ensure that no one will drop out of the scheme.

Additionally, because it is prefunded, we need not worry that our children's generation is shouldering the load of the scheme. The effect of a smaller population will be minimised and the scheme will be sustainable. While this is different from other countries, such as Japan, South Korea, Germany and Switzerland, where they use a pay-as-you-go system, this system is one that is more sustainable and equitable for long-term care where the costs increase with the age of the cohort. In fact, the CD Howe Institute suggested that the Canadian province of New Brunswick mitigates the impact of rising costs in some healthcare services by selectively converting some particularly age-sensitive costs to prefunding instead of pay-as-you-go, example, long-term care.

Some countries with pay-as-you-go schemes are struggling with the financial sustainability of the schemes. For instance, Japan is exploring raising co-payment from 10% or tightening the eligibility criteria. South Korea is looking into raising the percentage of the income being contributed. As of last year, long-term care insurance premiums are 2.55% of the income, split equally between employer and employee, with those without children paying an extra 0.25% of their income. Although the pay-as-you-go scheme in Switzerland faces less concerns about being sustainable, a concern is that the premiums are expensive. There, the health insurance covers up to 60 hours of care services a week, but with premiums from birth to life and varying by insurer, age, gender and insurance plan, the average annual premium in 2015 was $5,386.

Therefore, Mr Speaker, I would submit, the way we have structured it in Singapore as a pre-funded universal scheme helps to balance both present affordability as well as future sustainability. And to remain responsible stewards for future generations, I would say that we need to balance the equal priorities of affordability and financial sustainability.

Allow me to move on to a different topic of my speech, Sir, on payouts. In terms of payouts, CareShield Life comes in the form of cash and not in the form of service. This is good, because it gives the individual and caregiver more flexibility in arranging care. It also accommodates the wide buffet of options out there. But whether or not the payouts meaningfully relieve a burden for the long-term also depends on this question: are long-term care costs affordable?

In April this year, although there was an overall decrease from 20% in 2014 to 9.6% last year, Singapore still ranks high in terms of medical inflation. In light of this, what has the Government done, or what will it do, to make sure that long-term care costs are kept affordable?

Another feature of this scheme is that, over the years, as a person pays more premiums, the payout in the event of a severe disability also increases. But if we think about it, when someone becomes severely disabled and receives a cash payout from CareShield Life, his or her future is still uncertain. He or she does not know for how long she will need it. Assuming that general inflation is 2% per year, $600 now would be worth about $430 10 years later in what it can buy. Yes, it is good that the payouts can continue to a lifetime, but how do we ensure they remain sufficient in light of inflation? Medical inflation, I think, is higher than general inflation.

Another question I have is whether the severely disabled from the existing cohorts from CareShield Life will be excluded. I really hope not. If they never had a chance to purchase ElderShield, arguably, more than anyone right now, they need the support which CareShield Life is going to provide to the future cohorts.

Another question I have is: if a person recovers from his or her severe disability and no longer receives payouts, what happens to his or her premium after that and at what level would the payouts be if the person fulfils the criteria at another time? Since CareShield Life has lifetime coverage and is universal, including those in future cohorts with pre-existing disabilities, if a person recovers, it makes sense, in my view, for him or her to still be enrolled under this scheme.

It is important to keep this mandatory CareShield Life scheme sustainable. At page 29 of the well-written Report, it says, “Several large insurance companies have exited the long-term care insurance market due to unsustainable losses, while those that remained have sharply increased premiums and tightened their underwriting criteria.” That is for several large insurance companies. Therefore, ensuring fiscal prudence for this endeavour is key.

In conclusion, Sir, I would like to put on record my support for the adoption of this White Paper and the CareShield Life scheme it maps out. Much work has been put in by the team at MOH, the Committee itself, and MOH working with many agencies. It is a rational plan. The key is to make it sustainable. Therefore, I support the Motion.

Ms Jessica Tan.

Mr Speaker, thank you for allowing me to speak on this Motion. I would also like to record my thanks to the ESRC for the extensive work that has been done, as well as to the MOH team.

Planning for the time when one becomes severely disabled and thinking about long-term care requirements are not something that each of us necessarily thinks about. We tend to think that disability would not happen to us. This is the general feedback that I get, especially from the young in the community. And, for many, if we do become disabled, many have expressed that they do not want to prolong that state. Unfortunately, in both of these circumstances, none of us can control these outcomes. Therefore, it is important that long-term care is something we plan for, because when one is disabled, there is a need for ongoing care and support, and caregivers as well as families are impacted. And I would like to just share some examples that I have encountered in the community in my ward.

I have a resident who has seen me over the last few years. He comes quite regularly to seek assistance. He is a very filial son. His challenge has been in providing long-term care for his mother. His mother is in a nursing home because she is disabled and the family has challenges taking care of her. And where he is struggling is in paying for the nursing home charges. So, if there was long-term care planning done previously for her and, if she was of a cohort that had done long-term planning, that funding, that benefit payout, would have, in his case, helped a lot.

I have another family. This lady, in her middle age, quite a few years ago, her husband had a sudden disability and he had to be bedridden. They have three young children. She continued working, looked at all the different helping hands support and, up to today, she is in a very difficult situation. In fact, I saw her a couple of weeks ago, and she is still struggling to bring up the children as well as support the husband and give the care that the husband needs. You can see that it is not about just providing long-term care, but it is also the fact that because when someone is disabled, it affects the family as well. Therefore, long-term care planning is important.

Why I am sharing these examples is because while we talk about inclusion – and the recommendations have been on inclusion – there has also been a lot of discussion on the ground about exclusion. And I think there needs to be a lot more in terms of helping people understand the need, even though the scheme is compulsory. And as we have an ageing population, smaller families and people living longer, long-term care becomes even more important. So, while I understand that the priority – both for ElderShield and now CareShield – is to provide protection in old age. The latter example that I shared shows that, regardless of one's age, economic and financial situation, the demands on long-term care do have an impact on both the individual and the caregivers.

[Deputy Speaker (Mr Lim Biow Chuan) in the Chair]

I would like now to touch on two areas – universal coverage and premium affordability and sustainability. The recommendation for universal coverage, regardless of financial status or pre-existing disability for future cohorts of Singaporeans starting from age 30, is one that is key for this CareShield Life. In 2020, cohorts aged 30 to 40 will be enrolled upon the launch of this enhanced scheme, with subsequent cohorts enrolled when they turn 30. This ensures that the coverage is inclusive, with everyone having basic financial protection for their long-term care cost. As the Committee had noted, this will strengthen our social compact and is aligned with our values of an inclusive and, more importantly, a caring society which we strive to build.

On this point of being inclusive and the fact that participation is compulsory, it does beg the question on why women need to pay higher premiums. Both the men and the women before me have said a lot on this point, but the point that I would like to make is that given the risk-pooling and the fact that we are making the scheme compulsory, it is only right that premiums should be equal, regardless of gender, and I hope that MOH will take this point into consideration.

While many can agree on the benefits of universal coverage and risk-pooling and participation for everyone from age 30 onwards, many in this age group are also at stages of their lives when they have multiple responsibilities. For some of them, they are starting families, at the same time supporting ageing parents. Hence, CareShield Life may be seen as an additional commitment on them financially.

For some in this cohort, they may already have coverage and this will be seen as a duplication and additional cost. Can the Minister share what consideration is being given to this and what does it mean for those who already have coverage which they have with private insurers?

Let me touch on coverage enhancements. One key point about CareShield Life is that it offers a higher payout than the current ElderShield Plan and, more importantly, it recognises the fact that it is an ongoing support and, therefore, lifetime coverage.

Payouts are in cash and there is also no restriction on usage. This flexibility is welcomed, as long-term care needs will differ from person to person, and long-term care itself will evolve. As we all know, whether it is informal care, home care services, nursing care, centre-based care as well as palliative care services, long-term care needs are quite strenuous financially, and this flexibility is definitely welcomed.

Let me now touch on the point about premium affordability and sustainability. With CareShield Life's enhanced payouts and benefits, there is still the question of premium affordability. The recommendation to keep premiums low – besides risk-pooling that I touched on earlier as well as starting younger for the premiums to be spread across a longer period and also allowing for MediSave to be used to pay for premiums – does help in ensuring affordability because it eases the out-of-pocket expenses. Despite this, there is a lot of questions around how the premium amounts have been arrived at. Can the Minister share the actual principles that were used to determine premiums?

There are also commitments made to support lower and middle-income Singaporeans to keep premium affordable with the permanent means-tested premium subsidies, the transitional subsidies, as well as the Enhanced Premium Support for Singaporeans still unable to afford their premiums even after the subsidies.