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The target group: Low-income workers who need help to own homes

A NEWLY proposed housing grant for the low income will be given on top
of existing CPF housing grant schemes.

It is targeted at those who are working and have some income, but
struggle to afford their own homes, said National Development Minister
Mah Bow Tan.

The aim is to give those in the bottom 20 per cent of households a
chance to buy their own flats.

But the very poor, sick or those unable to work, who fall into the
bottom rung of this group, may not be able to afford to buy flats, even
with a grant.

For this group, the government will provide subsidised rental housing.

Mr Mah was responding to questions from The Straits Times on a new
scheme the Government is studying. This is to give Central Provident
Fund grants to low-income households so they can afford new or resale
HDB flats more easily.

The move was announced by Prime Minister Lee Hsien Loong at his
National
Day Rally speech on Sunday.

Mr Lee had noted that HDB flat-buyers enjoyed similar levels of subsidy
regardless of income. An additional grant would 'give lower-income
groups a bite from a bigger cherry', he said.

'When a family buys an HDB flat, we'll assess your income. And if your
income is in the lower-income group, then we can put a grant, paid into
your CPF, which will help you to buy the HDB flat,' he said.

Elaborating, Mr Mah said: 'The broad concept really is that, first of
all, it must be associated with work. I mean, it should not be just a
handout as it were, there has to be a link with work, what PM called
workfare.

'Secondly, I think it will help the lower-income to purchase a flat but
there must be the ability to service the loan. So we have to see how we
can tie that in with the concept of workfare.'

He said the grant would sit on top of existing CPF housing grant
schemes. Currently, first-time buyers of HDB resale flats can get a
grant of $30,000. They get another $10,000 if they buy a unit near
their parents' estate.

Mr Mah said the committee on low-wage workers chaired by Manpower
Minister Ng Eng Hen is looking at how best to work out the scheme.
Details could be ready in a few months, he said.

Contacted yesterday, a committee spokesman confirmed that information
on the new grant and workfare scheme will be released soon.

She declined to give more details, saying it was premature.

Mr Mah also did not give more details. But he did clarify that the
grant isn't meant for the very poor.

This group might not be able to service a housing loan. 'For them, we
will always have available the option of a rental flat... What the
Government can do for them is to provide them with a heavily subsidised
rental flat so that they can continue to have a roof over their heads,'
he said.

The proposed grant is targeted at low-income earners who, with some
help, can start owning property.

'Some of them... can be assisted to purchase a flat and assisted in a
way that would build up their assets,' said Mr Mah.

Analysts say the policy makes sense as the poorest 5 per cent would
probably not be able to service home loans, and should be helped with
other types of subsidies.

But there are some among the lower-income households who may need some
extra help to own a home, said Associate Professor Ong Seow Eng from
the
National University of Singapore department of real estate.

'Some may suffer from sudden loss of income like retrenchments which
will put them in financial difficulty,' he noted, adding that grants
given should be tied to jobs.