Do you like the CPF system? I do. But..

One man's meat is the another man's poison. This proverb totally summarises my thoughts for the CPF system. I like the CPF system, it paid for my housing loan. The employer actually pays me another 17% on top of what i get every month. (17% of a 6k ceiling is alot!). Friends around me all love the CPF, in fact we dont mind paying more CPF actually. 

However, if you surf the local forums, alot of people hate the CPF and call it a tax. Initially i was puzzled. Where in the world where you can use the tax you paid to fund for your housing loans? 

 As i read through the comments, i kinda got  "enlightened". The CPF is indeed quite taxing for the people who earn at a lower bracket， or the disadvantaged group, or maybe even for young adults who just joined the work force. I would say it's abit unfair to them. Anyway, CPF contribution starts as long as monthly wage is 50SGD or more. I only just found out.

Say for an example a 48 years old uncle (Uncle A)working as an odd job worker with 2 kids. Wife is a stay home house wife. They stay in a rental flat that cost 90 bucks per month. He earns around 1200 per month. After CPF contribution, he takes home around 1000. If he doesnt have CPF, he has another 200 bucks to spend on his family every day life. To him, perhaps he has never thought of buying a house, and to just make ends meet, but the CPF takes away additional 110 bucks (assuming the cpf pays for the rent) from him per month which he wouldnt see for a long time. To him, although the employer contributes another 240 per month, but what's the point? Instead of having 1200 to spend on 4 pax, now he only has 1000. 

To me, CPF is like a forced savings by the government. My friends and I are fortunate that we earn at a higher bracket and thus the CPF contribution does not hurt us as much as people like uncle A. I think there should be flexibility in the CPF contribution rates. 

1. A study should be conducted to find out what is the minimum expenditure required per person that will enable a person to live a relatively normal life. For example, no problem in eating at hawker centre at every meal, has internet/mobile connections, has no problem paying for the public transport (mrt and bus only) every month and etc. Not luxuries but something that is only fair for people living in this age of time. (Please dont say, wah no money liao still need internet ah??!?) We are NOT staying in N.Korea.

2. From the study, come out with a tiered system for CPF. Above the minimum income, people can opt to pay more CPF or just status quo. Below the minimum income, people can opt to pay less CPF of just status quo. People like uncle A can opt for lesser contribution where by employer+employee contribution is just enough to pay off his monthly rental + medisave contribution + rainy days savings for additional monthly rental in case uncle A is unemployed.

I understand that some of the government officials think that people of the lower income group have the mentality of  "got how much , spend how much" , thus they think forcing them to save via CPF is definitely good for them. However, how can the contribution rate be the same for people who earn 1200 SGD and people who earn 12000 SGD? It just doesnt make sense, isnt it? 

I think if this flexibility is implemented, the PAP will be better loved by more people.