THE move to stamp out the abuse of rental housing subsidies begins in March, when the Government starts charging new rental rates pegged to tenants' pay packets.
Affected tenants will not, however, be asked to pay more overnight, as the new charges will be phased in over two tenancy renewals, each lasting two years.
In addition, existing tenants will be given three months' notice of their new rent before their current tenancy is up.
The Government's concern with subsidy abuse is because Housing Board rental flats are leased at rock-bottom rates. One-room units range from $26 to $123, and two-room units, from $144 to $165, according to HDB's website.
Those rates are 10 per cent to 30 per cent of market rates.
The charges will go up to 70 per cent of market prices when the new rates kick in.
In remarks to Parliament on Friday, National Development Minister Mah Bow Tan said the changes were not to 'recover cost, but to avoid the abuse of government subsidies'.
HDB fleshed out the details of his speech in a statement yesterday.
The changes are not expected to affect 80per cent of current tenants belonging to the lowest tier of the income strata - those making $800 or less a month.
If their pay is still below $800 come March, this group will continue to enjoy a 90per cent subsidy.
New tenants earning below $800 will receive the same terms, provided they have not already enjoyed one round of housing subsidy - having bought and then sold a flat previously. In that case, their rental will be pegged at 30 per cent of market rates.
Mr Mah said the move would encourage Singaporeans, who could afford to do so, to own flats: 'They should be encouraged to move on and not deprive more needy households of a rental flat.'
As such, the new level of subsidies will fall in tandem with each rising tier of income.
The new rules also address the Government's acknowledgement that there are citizens who cannot afford flat ownership, and yet do not qualify for flat rental, which currently has a household income ceiling of $1,500.
Rental flats will hence be made available to those making more than $1,500 a month, albeit at lower subsidies.
Tenants making $1,501 to $2,000 will pay one third to a half of what they would pay in the free market by the time they renew their tenancy a second time.
Those who take home $2,000 or more will pay between a third and 70 per cent of market rent.
There will also be 1,000 more rental units when three vacant blocks in Boon Lay and Woodlands are refitted by early 2008.
Despite the assurances, the proposed changes worry Mr Dev Raja, 43, an environment officer who has been renting his two-room flat around the Geylang area for 13 years.
He asked that the authorities look beyond income levels before raising rent.
The single parent of four school-going children makes $1,050 a month from a contract job. He could end up paying at least a hundred dollars more than the $65 he now pays.
He said: 'Already, I don't know what to do next year, with expenses getting higher as the kids get older.'
Member of Parliament Charles Chong, who chairs the Government Parliamentary Committee on National Development and Environment said: 'A person's salary may have gone up but his situation may have deteriorated. I hope the Minister will have some flexibility to deal with these cases.'
The public can call 1800-225-5432 for details on the new rental policies.
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