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Not Exactly Helping Hands

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Lee Hsien Loong was the first to introduce the Pioneer Generation Package, stealing the thunder from Finance Minister Tharman Shanmugaratnam who bored everybody to tears in parliament - some ministers actually nodded off - while trying to extoll the benefits in his Budget speech. Even Minister for Law and Foreign Affairs K Shanmugam has admitted that there has been feedback of a "substantial disconnect" in awareness about the touted benefits. If it's that good, the reception says otherwise. Snake oil artists don't give up easily. "We are going to bring across the substance of the Pioneer Generation Package, and all the other substantial benefits that are in the Budget this year, to every single person,” said Mr Shanmugam.

"It is timely to revisit (the) reverse mortgage as an additional option for our seniors...," said National Development Minister Khaw Boon Wan in Parliament on Monday. Reverse mortgages are essentially loans taken up by a homeowner using his property as collateral, not unlike refinancing schemes resorted to by cash strapped commercial companies. Securitization, the exchange of assets for cash, comes with a price - the principal and interest on the debt.

Reverse mortgages have been tried before by NTUC Income, but only 24 households took it up between its introduction in 2006 and discontinuation in 2008. And for good reason, why should a senior citizen with no steady source of income want to incur extra bank charges?

The other alternative to pay the monthly bills is the Enhanced Lease Buyback Scheme, by which part of the homeowner's lease on the HDB flat is sold so that the proceeds can go towards topping up their CPF accounts. Which means that if there're insufficient funds to meet the Minimum Sum requirements, the money is as good as frozen in limbo, untouchable and unreachable for meeting even daily needs.

The problem is not limited to the old and the poor. The asset rich, cash poor anomaly is a common refrain.

Khaw promised, "This year, I want to do more for the elderly, the vulnerable groups, and help extended families live near one another." Seriously, the proof has to be in the pudding. All these schemes, some say scams, won't be of much help if the poor are still poor. And HDB flats continue to be over priced.


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