Parenting is a challenging and rewarding journey, but for parents who have children with special needs, it can also often be demanding.
These parents typically face unique challenges in caring for their kids, as children with special needs often require extra attention due to physical, developmental, or cognitive challenges.
Such parents also worry about their child’s future as it understandably comes with unique challenges. Even with the Employment Pathway Programme, a two-year school-to-work programme that teaches special needs children both hard and soft skills, the future continues to look daunting for many in this group.
What is the CPF Special Needs Savings Scheme?
Simply put, the CPF Special Needs Savings Scheme (SNSS) was proposed and launched for parents to set aside CPF savings for the long-term care of a child with special needs.
Developed by the Ministry of Social and Family Development (MSF) in partnership with the Central Provident Fund (CPF) Board, the scheme is a financial initiative designed to provide long-term financial security and support for individuals with disabilities.
Under this scheme, parents can make a nomination for their children to receive monthly disbursements from their CPF savings upon their demise.
Who is eligible for SNSS?
The nominating applicant should be the parent or an appointed legal guardian of the child with special needs. They must also be a Singapore Citizen or Singapore Permanent Resident.
Individuals with disabilities have to either require assistance in at least one Activity of Daily Living (ADL), or attend/have attended a Special Education (SPED) school.
The six ADLs are: eating, bathing, dressing, transferring, toileting, walking or moving around.
SNSS vs CPF cash nomination
The SNSS ensures monthly payouts from the parents’ CPF account to the nominated child.
With the SNSS, the parent can determine the amount these monthly payouts entail at the point of application. The minimum payout will be S$250 per month, with a minimum duration of at least one year.
Without the SNSS nomination, a deceased parent’s CPF savings in the Ordinary, Special, Medisave and Retirement Accounts will be distributed to his/her nominee(s) as a one-off lump sum payment in cash if he/she had made a cash nomination.
The lump sum payment can be a double-edged sword. The nominated special needs child might need the lump sum to aid in their living condition, but also might not have the mental capacity and financial knowledge to make wise choices on how to spend and save this money.
However, if the nominating parent’s CPF savings upon his/her demise is insufficient to support a year’s worth of payouts, the CPF savings will be disbursed as a lump sum to the nominated child with special needs.
Additionally, if the deceased parent had not made any nomination, his/her CPF savings will be transferred to the Public Trustee’s Office for distribution to his/her family members in accordance with the Intestate Succession Act or Inheritance Certificate (for Muslims).
Payouts for a child below 18 years old will be made to the legal guardian or the court-appointed deputy (if the child has one). The deputy or legal guardian will have to apply to the CPF Board on behalf of the child with disabilities to kickstart the payouts.
If the special needs child is 18 years old and above and has the mental capacity to handle financial affairs at the point of disbursement, the disbursement will be made to his/her bank account directly.
Should a child who is 18 years old and above lack the mental capacity to handle financial affairs, it will depend on if they have a valid Lasting Power of Attorney (LPA) with an appointed donee. If they have an LPA, the CPF Board will make payment to the donee when he/she steps forward to apply on behalf of the person with disabilities.
Should the child not have made a valid LPA, a third party may apply to the court to be appointed as the SNSS nominee’s deputy. The CPF Board will then make payment to the court-appointed deputy when he/she applies on behalf of the person with disabilities.
How to apply?
Parents with special needs children can download the SNSS application form and send the completed form to the Special Needs Trust Co. (SNTC) via mail, email or fax.
The application must be sent with copies of the nominating applicant’s NRIC (front and back), child’s NRIC (front and back), and Birth Certificate. Along with the documents, a School Certification Letter (if attending or have attended a SPED school), a Doctor’s Assessment Report, or a Functional Assessment Report must also be enclosed. More information about the application process can be found on the SNTC website.
Other ways to prepare for a special needs child’s future
Parents can top up the SNSS nominee’s CPF accounts based on current CPF rules. These top-up monies will enjoy CPF interest rates and will be set aside specifically for the child’s retirement needs instead of being disbursed under the SNSS.
Alternatively, parents under the CPF LIFE scheme who have made an SNSS nomination can opt not to receive their monthly CPF LIFE payouts to retain the monies in their Retirement Account (RA). In the request, members should indicate their intention to retain their CPF LIFE payouts in their RA for the benefit of their SNSS nominee(s).
Having an active health insurance policy for both parents and their special needs child is also essential in giving the family peace of mind and protecting wealth for future needs.
Additionally, parents with life insurance policies must remember to make a life insurance nomination. This can guarantee that their payouts will be left to their desired nominee(s), which could include their special needs child.
Caring for a child with special needs can require a lot of effort. Likewise, deciding which insurance policies are best suited for your family can be very time-consuming and confusing.
Let Team Planner Bee take the burden off your shoulders and feel free to contact us at email@example.com if you have any enquiries.