one of the changes to the cpf act was passed by parliament today, through a new special needs savings scheme (SNSS).
through the SNSS, parents can arrange to have their cpf savings disbursed in monthly payouts to their disabled offspring/s after their deaths.
prior to this scheme, the savings of a cpf member who dies are distributed to his/her nominees as one lump sum.
parents can decide the quantum of the monthly payouts but this has to be at least $250. however, if their cpf savings at death are insufficient to provide the payout for 12 months, the entire balance will be paid in a lump sum.
who is eligible?
open to parents of disabled children who are attending or have attended a special education school, or who need help in at least one activity of daily living, such as getting dressed, eating or moving around.
the SNSS will be implemented early next year.
my comments:
the new SNSS will be a boon for all parents because there is no minimum amount and comes with no adminstrative charge. besides, setting up a trust for their children with the special needs trust company will require a minimum of $5,000 in cash.
but as ms denise phua has opined in parliament, the SNSS is too restrictive and needs to be expanded as many special needs children do not attend special education schools. there are also others who require help with money management and long-term planning.
besides the SNSS, parents may need to review whether this will be sufficient to meets the needs of their child/ren and should consider other supplementary options in which a competent financial advisor should be able to assist.
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