Here’s a simple view of the owner-occupier tax. When CPF rules change everyone wants to know how their wallets will be affected. This includes younger workers and older people nearing retirement.
The Government has confirmed several CPF updates taking effect in 2026. These changes aim to improve long-term retirement savings while keeping support schemes relevant to current salaries. Here’s a clear breakdown so you don’t have to dig through policy papers during your coffee break.
Key Highlights of the 2026 CPF Reform Package
| Policy Area (Updated) | Key Changes Coming in 2026 | Groups Most Affected |
|---|---|---|
| Monthly CPF Salary Ceiling | Raised from $6,800 to $8,000 to boost retirement savings | Employees earning between $7,400 and $8,000 |
| Senior Worker CPF Contribution Rates | Total CPF rates will increase by 1.5% for older workers | Workers aged 55 to 65 |
| MRSS Coverage Expansion | Now extended to include persons with disabilities of all ages | PWD individuals and their families |
| New Matched MediSave Scheme | Government to provide 1-to-1 MediSave matching up to $1,000 annually | Singaporeans aged 55 to 70 |
| FRS & ERS Increase | Updated Full Retirement Sum: $220,400, Enhanced Retirement Sum: $440,800 | All individuals planning for retirement |
Monthly CPF Salary Ceiling Increased to $8,000
Starting from 1 January 2026 the CPF contribution cap will increase to cover monthly wages up to $8,000. This marks the final stage of the adjustments that were announced during Budget 2023.
Workers who earn between $7,400 & $8000 monthly will see higher CPF deductions from their salary. This means the amount you receive in your bank account each month will be somewhat lower. However your employer will also put in more money on your behalf so your total compensation actually increases. Here is a practical example for someone under 55 years old earning $8,000 monthly.
After CPF deductions your take-home amount would be $6,400. When you add what your employer contributes to CPF your total monthly package comes to $9,360. The annual salary ceiling for CPF purposes remains unchanged at $102000. Similarly the maximum annual CPF contribution limit stays at $37,740.
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Updated CPF Contribution Rates for Senior Employees
CPF Contribution Changes for Older Workers Workers between the ages of 55 & 65 will see a modest increase in their Central Provident Fund contributions starting in 2026. Both employers and employees will contribute more to these retirement savings accounts. The total CPF contribution rate for this age group will go up by 1.5 percent.
Revised Contribution Structure for Ages 55–60
Pension Contribution Rates The employer contributes 16% while the employee contributes 18%. When combined these contributions total 34%.
Contribution Adjustments for Ages 60–65
Social Security Contribution Rates The employer contributes 12.5 percent of the employee’s salary to social security. The employee also contributes 12.5 percent from their wages. When you add both contributions together the total social security contribution rate equals 25 percent.
These extra contributions will go directly into the Retirement Account. If the Retirement Account already contains the Full Retirement Sum then the contributions will go into the Ordinary Account instead.
Important Notes for Employers Under New CPF Rules
The CPF Transition Offset program known as CTO will keep running to assist employers with paying the higher CPF contribution costs.
Expanded MediSave-Ready Support Scheme (MRSS) for Persons with Disabilities
From 1 January 2026 the Matched Retirement Savings Scheme will extend its support to include persons with disabilities regardless of their age.
Persons with disabilities who are younger than 55 years old will receive matching contributions when they add money to their Special Account.
Contributions can come from various sources including family members employers and community organizations.
This expansion means that more Singaporeans will benefit from increased CPF savings over time and receive larger payouts in the future.
Introduction of the New Five-Year Matched MediSave Scheme (MMSS)
Understanding the Matched MediSave Scheme for 2026-2030 The Matched MediSave Scheme represents one of the most significant improvements coming in the 2026-2030 period.
MMSS Explained: Core Benefits and Purpose
MediSave Matching Grant The Government provides a matching contribution to your MediSave account. For every dollar you add to your MediSave the Government will add one dollar as well.
Eligibility Criteria for MMSS Participation
You need to be a Singapore Citizen between 55 and 70 years old.
You must own just one property that has an Annual Value of $21,000 or less.
Your monthly income should not exceed $4000.
Your MediSave account balance must be less than half of the Basic Healthcare Sum.
The government checks if you qualify every year without you having to apply. If you meet the requirements then you will receive the matching payouts in the next year. This program will give important support to older adults who need more healthcare services as they age.
Full Retirement Sum (FRS) Increasing to $220,400 in 2026
The Full Retirement Sum known as FRS is increasing by approximately 3.5 percent to reach $220,400.
This adjustment affects the related retirement sums accordingly. The Basic Retirement Sum will be $110,200 while the Enhanced Retirement Sum will be $440800. Your applicable FRS amount depends on when you reach the age of 55. This new figure of $220,400 only applies to people who turn 55 during 2026. If you reached 55 in an earlier year your FRS remains at the amount that was set for that particular year.
Enhanced Retirement Sum (ERS) Raised to $440,800
Understanding the Enhanced Retirement Sum The Enhanced Retirement Sum works differently from the Full Retirement Sum when it comes to age requirements. Anyone can add more money to their Retirement Account at any time without worrying about how old they are. When you increase your Enhanced Retirement Sum you can receive larger CPF LIFE payments in the future. Many Singaporeans find this option valuable since people are living longer than before.
Higher Silver Housing Bonus (SHB) to Support Downsizing Seniors
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Additional Upgrades to MediSave and MediShield Life Coverage
From 15 December 2025: Seniors who deposit up to $60000 of CPF housing refunds into their Retirement Account will qualify for the Silver Housing Bonus. Those who move to 2-room or smaller flats receive an additional $10,000 which increases the bonus to $40000. Seniors who downsize from a private property with an Annual Value between $21,000 and $31,000 can also receive up to $20,000. This provides seniors with more flexibility while maintaining strong retirement planning.
Increased Limits for Outpatient MediSave Withdrawals
Healthcare Costs and Changes for Older Singaporeans in 2026 Healthcare expenses remain a significant worry for many older Singaporeans. The government has announced several adjustments that will take effect throughout 2026 to help address these concerns. One major change involves increasing the withdrawal limits for outpatient care. Under the Flexi-MediSave scheme the annual withdrawal limit will rise from $300 to $400. This increase gives people more flexibility to use their MediSave accounts for routine medical visits and treatments. Also the MediSave withdrawal limit for medical scans will see a substantial boost. Starting from 1 January 2026 this limit will double from $300 to $600 per year.
Extension of MediSave Dental Coverage for More Treatments
Expanded Dental Coverage Under Flexi-MediSave Starting from the middle of 2026, Flexi-MediSave will include coverage for certain dental procedures. Patients can now use their accounts to pay for permanent crowns and root canal treatments. These services will be accessible at both CHAS clinics & public healthcare institutions across the country.
Added Support for Fertility Preservation During Medical Care
From June 2026 MediSave and MediShield Life will provide coverage for embryo freezing egg freezing & ovarian tissue freezing.
These benefits apply to patients who face the risk of permanent infertility due to their medical treatments.
The new policy aims to help individuals preserve their fertility before undergoing procedures that could affect their reproductive capabilities.
Patients receiving cancer treatments or other medical interventions that may damage their fertility will be eligible for this coverage. This expansion of benefits represents a significant step in supporting patients who need to protect their future family planning options while addressing serious health conditions.
