Every month, a chunk of your salary gets deposited into your CPF MediSave Account, an account earmarked just for healthcare costs.
If you’re self-employed, you can’t escape this either as you’re forced to make MediSave contributions every time tax season rolls around. There are no two ways around it — the government says you have to, and so it must be.
But how many of you have actually successfully used your MediSave funds or even know what they can be used for? There’s a good chance that those who are still young and healthy have no clue.
Ultimately, that cash in your MediSave account is your money. So it pays to know when you can use it and how, so you can squeeze as much utility as you can out of every cent you put in.
By the end of this article, you’ll understand what you can use your MediSave on and how to use it.
- What is a Medisave account and where can you find it?
- How much is the Medisave contribution?
- When does money get deposited into your Medisave account?
- How much do you get in Medisave interest?
- What is the Medisave limit and what happens when you exceed it?
- What can you use Medisave for?
- Can you pay insurance premiums with MediSave?
- How to make a claim from MediSave?
What is a MediSave account and where can you find it?
Central Provident Fund (CPF) savings play a huge role in Singapore’s social security system. A set of CPF accounts is opened for every Singapore Citizen and Permanent Resident as follows:
- Ordinary Account (OA): The money in this account can be used to pay for housing, education and certain types of investments. Eventually, the money in this account will be channeled into retirement savings.
- Special Account (SA): The money in this account is saved for retirement, and can also be used for certain types of investments.
- MediSave Account: The money in this account is to be used for healthcare and medical bills, and can also be used to pay premiums for some types of insurance such as private medical insurance.
- Retirement Account (RA): Don’t see a Retirement Account when you log in to CPF? Don’t panic. It’s only when you turn 55 that your OA and SA merge to form your retirement account, with the money to be used as retirement income.
To check the balance in your Medisave account and other CPF accounts, simply log in to the CPF website using your Singpass.
How much are your MediSave contributions?
Every month, a chunk of your salary gets deducted before your boss hands it over to you, and is deposited into your CPF accounts. The bulk of your CPF contributions go into your OA.
|Your age||CPF contribution rates|
|By Employer||By Employee||Total % of wage|
|55 and below||17%||20%||37%|
|Above 55 to 60||13%||13%||26%|
|Above 60 to 65||9%||7.5%||16.5%|
The percentage that gets deducted from your salary is under the “By Employee” section. So if you’re under the age of 55, 20% of your salary gets deducted every month and deposited into your CPF accounts.
That means that if your salary is officially $4,500, $900 (20% x $4,500) of that money will be deducted every month and deposited into your CPF accounts. Your take-home pay will thus be $3,600.
(In case you’re wondering, the figures under the “By Employer” column indicate how much your employer needs to fork out IN ADDITION to your salary and deposit into your CPF accounts. No wonder your boss is always in a foul mood! You’re thus receiving the equivalent of 37% of your salary in your CPF accounts every month if you’re under the age of 55, even though only 20% gets deducted from your salary.)
But what we’re interested in right now is the money in your MediSave Account. So, how much of your salary is going into this account?
|Your age||Ordinary Account||Special Account||MediSave Account|
|35 and below||23%||6%||8%|
|Above 35 to 45||21%||7%||9%|
|Above 45 to 50||19%||8%||10%|
|Above 50 to 55||15%||11.5%||10.5%|
|Above 55 to 60||12%||3.5%||10.5%|
|Above 60 to 65||3.5%||2.5%||10.5%|
You’ll notice an interesting pattern here. As you age, a smaller and smaller percentage of your salary gets deposited in your OA and SA. Conversely, your Medisave contribution actually INCREASES from the age of 35 to 50.
When does money get deposited into your MediSave account?
When your Medisave account gets its contributions depends on your employment situation.
Your employer is required to make the deposit of your CPF contributions, including your MediSave contributions, by the end of each month. You should be able to see your CPF and MediSave contributions reflected in your account balance when you log into the CPF portal soon after.
You are also entitled to late payment interest at a rate of 1.5% for every day after the end of the month your employer is late by.
If your CPF contributions still have not come in by the 14th of the following month (or on the next working day if the 14th is a weekend or public holiday), your employer has defaulted.
If you suspect that your employer has not been making your CPF contributions promptly or is trying to cheat you out of them (as some employers have been found guilty of doing), make sure you remind them and, if they still persist, raise the issue with MOM.
Self-employed people are not required to make contributions to their CPF Ordinary or Special Accounts.
But guess what, MediSave contributions are compulsory so long as you earn more than $6,000 in a year (after deducting all allowable business expenses, capital allowances and trade losses as approved by IRAS).
The Medisave contribution rate for self-employed persons is as follows.
|Net Trade Income||Below 35 years||35 to below 45 years||45 to below 50 years||50 years and above|
|>$6,000 to $12,000||4%||4.5%||5%||5.25%|
|>$12,000 to $18,000||4% to 8%*||4.5% to 9%*||5% to 10%*||5.25% to 10.5%*|
|>$18,000||8% (max $5,760)||9% (max $6,480)||10% (max $7,200)||10.5% (max $7,560)|
* Actual percentages are calculated according to a formula based on your Net Trade Income.
As you can see, the Medisave contribution rates for self-employed persons can be a tad complicated. It’s easier to use the CPF Board’s Self-Employed Medisave Contribution Calculator to see exactly how much you need to contribute.
In any case, every year during tax season, after filing your taxes, IRAS will send you a Notice of Computation indicating the amount of MediSave contributions you need to make, calculated based on your income and age.
You will then have 30 days to deposit the money into your CPF account. This can be done on your bank’s internet banking website.
How much do you get in MediSave interest?
All the money in your CPF accounts earns interest, but the interest rates vary depending on which account they’re in.
Your Medisave balance currently earns interest at a rate of 4% per annum. This is an extremely good rate, considering it is completely risk-free.
What is the Medisave limit? What happens when you exceed it?
So maybe you’ve got a huge income and actually want to deposit more money into your MediSave account. After all, the 4% risk-free interest rate is very attractive, and since you estimate that your healthcare costs will be much higher when you’re older, why not?
Well, there is actually a maximum amount of money your MediSave Account can contain. That is known as the Basic Healthcare Sum (BHS).
The BHS is adjusted every year in January, and in 2021 is $63,000 for those aged 65 and below. Once you turn 65, your BHS is frozen and no longer rises.
The BHS is the maximum your MediSave Account can contain. If you try to top up your Medisave Account above the BHS, any excess money goes into your Special Account (if you’re under the age of 55) or Retirement Account (if you’re 55 and older). The good news is that like your Medisave Account, your Special/Retirement Account also earns interest at a rate of 4%.
The Basic Healthcare Sum is designed to be a ceiling rather than a floor, so it does not affect how much you can withdraw. Even if you don’t meet the Basic Healthcare Sum, you can still use Medisave for approved purposes, or withdraw your CPF RA savings when you reach the age of 55.
What can you actually use MediSave to pay for?
So this is the question we all have on our lips. Well, we know that MediSave is for you or your family members’ healthcare costs. But does that mean you can use it when you’re going to the doctor for an MC because you couldn’t wake up for work?
Nope. You’re only allowed to tap into your MediSave funds in certain situations, and there are usually limits on how much you can withdraw. MediSave can be tapped upon for the following costs:
- Hospitalisation & surgery
- Non-acute hospital stays
- Outpatient treatments
- Chronic disease management
- Health screenings
- Having a baby
- Senior care
- Health insurance (MediShield + Integrated Shield) premiums
- Disability insurance (CareShield + Supplement) premiums
However, the government has painstakingly defined what exactly you can and cannot use your MediSave funds on in each category. To learn more, read our blog post on MediSave withdrawal limits for 2021.
Here are the highlights.
Hospitalisation, surgery & rehabilitative care
MediSave can be used to pay medical bills when your health condition is serious enough to warrant hospitalisation.
If you get hospitalised and need to undergo surgery, you can use $450/day from MediSave to pay for the hospital charges (ward fees). The limit is meant to cover stays in Class B2 and C wards at public hospitals. So if you choose to go private or upgrade to a Class B1 or A ward, your MediSave will not cover the full stay, and you’ll have to top up the difference.
The surgery is also MediSave-payable. The MediSave surgical limit is separate from hospital limits, and depends on the type and complexity of the operation. This can range anywhere from $250 to $7,550. (Applies to day surgery as well.)
You may be placed in a non-acute hospital afterwards for longer-term rehabilitative care. You can use up to $250/day from MediSave to pay for approved community hospitals.
Be sure to ask your healthcare provider how much of the cost of any surgical procedure you’ll be able to pay for using Medisave.
Outpatient treatment: MediSave 500/700
“Outpatient treatment” refers to medical treatment without getting hospitalised. Generally, you are not allowed to pay with MediSave on outpatient treatment, except for diagnostic scans/tests, renal dialysis for kidney failure, and selected treatments for cancer and HIV.
BUT, you can spend up to $500/year on chronic disease management (subject to 15% co-payment in cash), mammograms, and selected vaccinations. This is known as the MediSave 500 scheme.
If you have more than 1 chronic disease under the programme, or if your illness has complications, the limit would be $700/year, i.e. MediSave 700.
Those aged 60 and above get to use another $200/year (“Flexi-MediSave”) to use at polyclinics, CHAS GP clinics, and outpatient clinics at public hospitals/national specialist centres.
Yep, you can use your MediSave on assisted conception procedures (like IVF) and on delivering a baby, including up to $900 on pre-delivery costs and $450/day for the hospital stay regardless of whether you’re at a public or private hospital.
If your newborn needs to go for selected screenings, these are also MediSave-payable and will be deducted from your MediSave 500/700.
Can you pay insurance premiums with MediSave?
Even if you are in perfect health, your MediSave funds can still come in handy. It can be used to pay for your MediShield Life and Integrated Shield Plan premiums.
Being the national health insurance scheme, MediShield Life premiums are fully deductible from MediSave. But if you upgrade it to an Integrated Shield Plan or IP — you can use also MediSave to pay the private insurance premiums up to these Additional Withdrawal Limits:
|Age||Additional Withdrawal Limit for private insurance component of IPs|
|40 and under||$300|
|41 to 70||$600|
|71 and above||$900|
IPs are available from 7 insurers, listed here:
- Max. Annual Coverage Limit
- Pre-Hospitalisation Benefit
- 180 days
- Post-Hospitalisation Benefit
- 365 days
You can also use MediSave to pay for CareShield Life, the national disability income insurance scheme that kicks in when you hit age 30. Should you choose to upgrade your CareShield Life to get higher disability payouts, you can use up to $600/year on those CareShield Supplement premiums.
How to make a claim for MediSave withdrawal?
You can make withdrawals from your Medisave account by filling in the Medical Claims Authorisation Form authorising the medical institution to use your MediSave funds to cover your treatment. You must also submit the form if you are using MediShield Life and an Integrated Shield Plan to pay for your treatment.
The good news is that hospitals and other medical institutions will be able to help you with the administrative work. Just tell them you want to use your Medisave/MediShield/Integrated Shield Plan to pay and ask if they can help you with the paperwork.
If you’re tired of filling out the form every single time you want to make Medisave withdrawals, you can submit the Medical Claims Authorisation Form (Multiple Institutions) to authorise the use of MediSave, MediShield Life and your Integrated Shield Plan to be used for current and future medical treatment at all participating institutions, which include most of Singapore’s hospitals, polyclinics as well as the National Cancer/Dental/Heart/Skin/Eye centres.
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