Everything You Need to Know about Your MediSave Account in 2021
MediSave is a national savings scheme that helps Singaporeans save for their medical expenses by allocating a portion of their salary into their CPF MediSave Account each month. The savings you have in your MediSave Account can then be used for your, or your dependents’ healthcare needs. But do you know what you can use your MediSave for?
Mandatory for all Singaporeans and PRs, MediSave can be used for a range of healthcare needs from dental treatments such as wisdom tooth surgery, to health screenings and other outpatient treatments. In this complete guide to your MediSave Account in 2021, find out what you can use it for, how it is different from MediShield, as well as the MediSave interest and withdrawals that you are entitled to.
What is MediSave and who has it?
MediSave is a savings account administered by the CPF Board. Both you and your employer are required to regularly set aside money to be deposited into your MediSave account. If you are a salaried employee, this money is automatically set aside from your monthly wages.
The money in your MediSave account can be used to pay for a number of healthcare needs, including specific medical treatments, dental care, MediShield Life premiums and medical insurance premiums. However, these are subject to certain limits.
All Singaporeans and PRs residing and working in Singapore are required to contribute regularly to their MediSave Accounts. Singaporeans residing and working overseas do not have to make compulsory MediSave contributions, but they are free to make voluntary contributions.
What can you use MediSave for?
MediSave can be used to pay for your personal or approved dependents’ healthcare needs. Meant to help you save for future medical expenses in your later years, it can only be used for certain healthcare and medical expenses, such as:
● Hospitalisation and surgery (including wisdom tooth surgery)
● Palliative care
● Outpatient treatments
● Chronic disease management
● Health screenings
● Vaccinations
● Having a baby
● Health insurance (MediShield + Integrated Shield) premiums
● Disability insurance (CareShield + Supplement) premiums
However, there are limits to how much you can withdraw. Here is a quick snapshot of what you can withdraw for different purposes:
MediSave and MediShield: What’s the difference?
As we mentioned above, MediSave is an account, funded by CPF contributions, that aims to help all Singaporeans and PRs save for their, or their dependent’s future healthcare needs.
On the other hand, MediShield Life is a personal health insurance plan that automatically covers all Singaporeans and PRs from birth. It supplements your MediSave coverage and is designed to help you pay less for large hospital bills in B2/C class wards. You can also use it to pay for certain costly outpatient treatments such as chemotherapy or dialysis.
While your MediSave savings can eventually be depleted, MediShield Life covers you for life and there is no limit on how much you can claim in your lifetime (although annual limits apply).
MediShield Life also covers some health conditions that MediSave cannot be used for. For instance, it covers pre-existing conditions, such as cancer, respiratory disease and blood disorders, with this coverage potentially to be widened to include treatment for attempted suicide, substance abuse and alcoholism – conditions that are usually excluded from traditional health insurance plans.
You can pay for your MediShield Life premiums with MediSave. You can also use MediSave to pay for Integrated Shield Plans (IP), a form of private hospitalisation insurance that dramatically reduces your out-of-pocket healthcare expenses.
Here’s how it works.
Source: https://www.moh.gov.sg/cost-financing/healthcare-schemes-subsidies/medishield-life
Information correct as of 3 August 2021
How much do you need to contribute to your MediSave in 2021?
Your compulsory MediSave contribution amounts will vary depending on your monthly salary or income from work or business, and whether you are an employee or self-employed.
MediSave contributions for a salaried employee
A percentage of your salary will be set aside and deposited into your CPF accounts. This portion is called your employee CPF contribution.
Your employer is also required to contribute some money to your CPF accounts over and above your salary. Employer’s contributions do not affect your take-home pay after CPF contributions.
Here are the current CPF contribution rates for salaried employees:
| CPF Contribution Rates | |||
|---|---|---|---|
| Age | By Employer (calculated as a % of your wage) | By employee (calculated as a % of your wage and set aside from your salary) | Total (calculated as a % of your wage) |
| 55 and below | 17 | 20 | 37 |
| Above 55 to 60 | 13 | 13 | 26 |
| Above 60 to 65 | 9 | 7.5 | 16.5 |
| Above 65 | 7.5 | 5 | 12.5 |
When these contributions are made, they will be distributed in the following manner between your various CPF accounts, provided your monthly salary is at least $750.
Before the age of 55, when you and/or your employer make a contribution to your CPF account, the money is distributed into the following accounts:
- Ordinary Account – Savings in this account can be used for housing and education.
- Special Account – Retirement savings.
- MediSave Account – Savings can be used to pay for healthcare, dental care, MediShield Life premiums and medical insurance premiums.
When you turn 55, your Ordinary Account and Special Account will merge to become your Retirement Account. Singaporeans and PRs aged 55 and above thus have the following CPF accounts:
- Retirement Account – Retirement savings.
- MediSave Account – Savings can be used to pay for healthcare, dental care, MediShield Life premiums and private medical insurance premiums.
| Allocation rates (% of wage) | |||
|---|---|---|---|
| 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 |
| Above 65 | 1 | 1 | 10.5 |
Let’s see how this might look for a particular person, Matthew:
Matthew’s total monthly CPF contributions of $1,850 will be distributed to his CPF accounts in the following manner:
MediSave contributions for a self-employed individual
If you are self-employed and earning an annual Net Trade Income (NTI) of more than $6,000, you are required to make annual MediSave contributions. The amount will depend on your age and your work or business income as declared on your IRAS tax return. This can also be calculated using CPF’s Self-Employed MediSave Contribution Calculator.
Unlike employees, you are not required to make contributions to your CPF Ordinary Account or Special Account, although you may do so voluntarily. You may also contribute more than required to your MediSave account.
Here are the compulsory MediSave contribution rates for self-employed people.
| Age as at 1 January | ||||
|---|---|---|---|---|
| Annual net trade income | Below 35 years | 35 to below 45 years | 45 to below 50 years | 50 years and above |
| Above $6,000 to $12,000 | 4% | 4.5% | 5% | 5.25% |
| Above $12,000 to $18,000 | 4-8% | 4.5-9% | 5-10% | 5.25-10.5% |
| Above $18,000 |
8% (max $5,760) |
9% (max $6,480) | 10% (max $7,200) | 10.5% (max $7,560) |
To check the exact amount of compulsory MediSave contributions you need to make, you can use the CPF Board’s Self-Employed MediSave Contribution Calculator here.
Here’s an example of how a freelancer might calculate their annual CPF contribution:
MediSave interest: how much am I getting?
From now till 30 September 2021, the savings in your MediSave account will earn a base rate of 4% per annum. This is reviewed on a quarterly basis and updated interest rates can be found here.
You receive an additional 1% interest per annum on the first $60,000 of your combined balances in your Retirement Account, Ordinary Account (with a cap of $20,000), Special Account and MediSave Account.
When you hit the age of 55, you will earn an additional 2% interest per annum on the first $30,000 and 1% per annum on the next $30,000 of your combined balances (capped at $20,000 for your Ordinary Account).
You may also choose to make voluntary top ups to your MediSave Account to enjoy tax reliefs. To check on the balance in your MediSave account, login to myCPF Online Services here or download the myCPF mobile application for iOS and Android and log in using your SingPass.
What is the Basic Healthcare Sum and what happens when you reach it?
Previously known as the MediSave Contribution Ceiling, the Basic Healthcare Sum is the maximum amount of money that your MediSave Account can hold. There is no minimum sum that you need to set aside in your MediSave Account.
Once the Basic Healthcare Sum is reached, any money that would otherwise be allocated to your MediSave Account will flow into your Special Account or Retirement Account instead.
The Basic Healthcare Sum is reviewed every year, but once you reach the age of 65, it remains fixed for the rest of your life. For instance, the Basic Healthcare Sum for 2021 is $63,000. If you turned or are turning 65 in 2021, the ceiling on your MediSave account will remain at $63,000 for the rest of your life.
How to make a MediSave claim
When using your MediSave funds to pay for healthcare or dentalcare costs at a MediSave-accredited medical institution, you will need to submit a Medical Claims Authorisation Form (Single Institution) to the relevant healthcare provider.
This form should be submitted whether or not you are also being covered by an Integrated Shield Plan and/or MediShield Life. The healthcare provider will handle any additional paperwork on their end. You should see your MediSave withdrawals reflected on your final bill.
If you wish to use your own MediSave funds to pay for future healthcare costs at all public healthcare institutions, you can submit a Medical Claims Authorisation Form (Multiple Institutions), or do this electronically through HealthHub. Thereafter, your MediSave funds will be used to pay healthcare costs at all eligible healthcare providers whenever permitted by the system.
When using MediSave to pay for Integrated Shield Plan premiums, the agent or insurer you are purchasing your plan through will handle all the necessary paperwork. The portion of your premiums to be paid through MediSave will thereafter be automatically deducted every year.
Conclusion
Your MediSave Account can be used to defray medical costs for yourself and dependents such as your parents or spouse. However, it does not cover all conditions. With the rising cost of healthcare, it is also not sustainable to rely on your MediSave savings alone.
Instead, make the most out of your MediSave funds by getting a good Integrated Shield Plan from Income. With adequate health insurance coverage, you get to enjoy quality healthcare with peace of mind.
Important Notes:
This article is meant purely for informational purposes and should not be relied upon as financial advice. The precise terms, conditions and exclusions of any Income products mentioned are specified in their respective policy contracts. For customised advice to suit your specific needs, consult an Income insurance advisor.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
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