The government announced the CareShield Life plan in 2018. It’s aimed at providing long-term care, to protect Singaporeans against the effects of severe disability. But there’s a lot to break down, depending on how old you are. So let’s lay it all out.
Who is it for?
CareShield Life’s coverage extends to Singaporeans and permanent residents, and includes those who don’t currently reside in Singapore.
Born after 1990 (aged below 30 in 2020):
Coverage is mandatory. You will be automatically enrolled when you turn 30, regardless of pre-existing medical conditions and disability. Those with pre-existing severe disabilities at the point of reaching 30 will need to contribute once to join the scheme, and they can start receiving payouts.
Born between 1990-1980 (aged between 30-40 in 2020):
Coverage is mandatory. You will be automatically enrolled when you turn 30 or on 1st October 2020, whichever later.
Born in 1979 or earlier
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Born between 1970-1979 (aged 41 to 50 in 2020) with existing ElderShield and not severely disabled:
Coverage is optional. You will be automatically enrolled into CareShield Life from end-2021. However, you can opt out by 31st Dec 2023 if you do not wish to remain on CareShield Life. (More information to be announced later.)
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Born in 1979 or earlier, without existing ElderShield:
You can choose to join CareShield Life from end-2021 onwards if you are currently not disabled. (More information to be announced later.)
What does it do, and how does it benefit me?
Similar to ElderShield, CareShield Life provides a payout upon severe disability to help with the cost of long term care.
Severe disability is defined as needing assistance in at least three of these six activities of daily living:
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Eating without help
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Getting dressed
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Using the toilet
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Bathing
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Moving or walking on flat ground
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Transferring from the bed to a chair, or vice versa.
1. Payouts are planned with inflation in mind
In 2020, the payout amount starts at $600/month.This amount will increase by 2% per year from 2020 to 2025. After 2025, increments in payout and premiums will be recommended by an independent CareShield Life Council.
For each individual’s payout, the amount will be fixed at age 67 or when a successful claim is made, whichever occurs first. Once a successful new claim is made, your monthly payout amount will remain fixed for the duration of your severe disability.
Refer to this illustration below
Source: https://www.careshieldlife.gov.sg/careshield-life/benefits.html
2. Lifelong payouts
You will receive monthly payouts for as long as you remain severely disabled for life.
3. Cash is king
Payouts are given in cash so you can use it however you like.
4. Worldwide coverage
You will remain covered, be able to make a claim regardless of where you are residing, and receive payouts.
Premiums
How do I pay for the premiums?
Premiums are fully payable by MediSave. Your family members (i.e. spouse, children, parents, siblings and grandchildren) can also help to pay your premiums with their MediSave, or top up your MediSave with cash.
How long do I need to pay for the premiums?
CareShield Life premiums are pre-funded with premiums paid during your working years. The government also manages a pool of funds within your generation, to cover its current and future claims. This way, we won’t need to pay for premiums during our retirement years but still get covered for life.
Premiums are paid from the age you join until the age of 67, inclusive of that year after you join the scheme, whichever is later.
But if you join at age 59 or older in end-2021, you will pay premiums for a period of 10 years. If you are still paying for premiums beyond age 67, base premiums will become flat. More on this in the next section.
How much are premiums?
Premiums are in 2 parts:
1. Base premiums that apply to everyone enrolled:
From 2020 to 2025, premiums and payouts will both increase by 2% per year.
Beyond that, premium and payout adjustments will be recommended by an independent CareShield Life Council. The Council will use statistics from claims experience, life expectancy, and disability trends to determine the recommendations.
2. A catch-up component—not applicable for those born in 1980 or after:
The catch-up component is a flat amount paid over 10 years, and is paid on top of the base premium.
Who will need to pay for this?
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For existing ElderShield 300 policyholders
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For those not insured under ElderShield
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For those who opted into ElderShield late
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Foreigners who became Singapore Citizens or Permanent Residents from 1st October 2020 onwards.
Source: https://www.careshieldlife.gov.sg/careshield-life/premiums-and-premium-support/existing-cohort–1979-or-earlier.html
Affordability
There are four subsidies and support for premiums
1. Eligibility-based premium subsidies
This is means-tested, for lower- to middle-income households
| Monthly per capita household income | Subsidy rate |
|---|---|
| < S$1000 | 30% |
| S$1,101 – S$1,800 | 25% |
| S$1,801 – S$2,600 | < 20% |
2. Transitional subsidies
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For those born in 1980 and after
Singapore citizens will receive up to S$250 over the first 5 years to help pay for the premiums of CareShield Life. This is given on top of the means-tested subsidies.
Source: https://www.careshieldlife.gov.sg/careshield-life/premiums-and-premium-support/future-cohort–1980-or-later.html
3. Participation incentives
For those who join at age 59 or older from 1st October 2021 onwards, by 31 Dec 2023.
- The incentive will be given over 10 years.
| Year of birth | Yearly incentive | Total incentives over 10 years |
|---|---|---|
| 1975 – 1979 | S$50 | S$500 |
| 1970 – 1974 | S$100 | S$1,000 |
| 1965 – 1969 | S$150 | S$1,500 |
| 1960 – 1964 | S$200 | S$2,000 |
| Before 1960 | S$250 | S$2,500 |
4. Additional Premium Support (APS)
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For those who cannot afford the premiums even after the above subsidies and family support.
These subsidies are designed such that no one will lose their CareShield Life coverage because of the inability to afford their premiums.
ElderShield vs CareShield
Here’s a comparison table between ElderShield and CareShield Life
| Careshield life | Eldershield 400 | |
|---|---|---|
| Coverage period | From age 30 onwards, for lifetime | From age 40 onwards, for lifetime |
| Duration of payout during disability | Lifetime | 6 years |
| Disability monthly payout | S$600/mth | S$400/mth |
| Premiums starts | At age 30 | At age 40 |
| Premiums stop | At age 65 | At age 67 (or at later retirement age) |
| Government subsidies | Yes | No |
| Participation | Compulsory | Can opt out |
| Insurance Provider | Managed by the government | By private insurers, Aviva, Great Eastern and NTUC Income |
For those born before 1980, should you switch to CareShield?
Two main factors we think you should consider before you decide to switch:
1. Eligibility
Applicants must not currently be disabled.
2. Affordability
Premiums are more expensive than ElderShield due to the higher payouts and longer payout period, so do consider if you will have sufficient funds till age 67 before making the switch
To illustrate, we retrieved the Careshield Life premiums from here, assuming the person is currently under ElderShield 400, lives in a condo and has a minimum $28,000 annual household income, having enrolled in either plan in 2021.
Annual premiums in 2021 for person aged 46
| Gender | Eldershield 300 | Eldershield 400 | Careshield life before subsidies |
Careshield life after subsidies |
|---|---|---|---|---|
| Male | S$197.38 | S$228.78 | S$385.00 | S$335.00 |
| Female | S$255.55 | S$288.87 | S$484.00 | S$434.00 |
Annual premiums in 2021 for person aged 56
| Gender | Eldershield 300 | Eldershield 400 | Careshield life before subsidies |
Careshield life after subsidies |
|---|---|---|---|---|
| Male | S$394.76 | S$469.03 | S$573.00 | S$423.00 |
| Female | S$519.42 | S$604.68 | S$738.00 | S$588.00 |
Across the board, the premiums for women are roughly 30% more than men for all 3 schemes. We hope this has helped to demystify CareShield Life, and help you understand how the scheme can fit into your life.