There was an interesting article that caught my attention last Saturday. The article reported on the plight of some elderly who lived in landed properties but were cash-strapped. They had hoped to be able to land low-wage jobs and also receive Workfare for their subsistence needs. However, under current Workfare criteria, they would not qualify since they are staying in a property with a high Annual Value (AV). So there appears to be a little problem.
Actually, the solution to their problems seems pretty obvious:
“Why don’t they just sell their homes and downgrade to a resale HDB flat or even a condo?”
Apparently, sentimental value, the desire to leave behind a bigger bequest to their children and the fear and resistance to change are some reasons why these elderly refuse to cash out on their landed properties. The house could have been bought by their parents or ancestors and they want to leave it behind for their children. Moreover, as most of them are already in their 70s and 80s, a move could cause significant stress for them to adapt to a new house and environment.
Therefore, this group of elderly is hoping for some institutional or government support in their old age. This is probably an extreme case of the asset-rich and cash-poor phenomenon currently playing out in Singapore.
However, if this article was supposed to tug at my heart strings and encourage me to lend support to this group’s cause, then it was an epic fail. In fact, if part of my taxes are channelled directly to these elderly, I would probably be less than thrilled.
Here’s my argument why this group of elderly deserve little additional help that comes from our taxpayers’ money.
1. Sending a wrong signal
Large-scale special transfers like GST vouchers, CPF top-ups and Workfare take into account the property values of the person’s residence and his income. This is hardly a fool-proof method to exclude the affluent from getting large amounts of transfers since there are actually wealthy people who are retired and live in small flats. However, excluding the property values would only exacerbate the situation.
My view is that this group is getting heard because these people tend to be educated and hence, vocal. But appeasing them is like rewarding that naughty kid in kindergarten with a lollipop hoping he would keep quiet and behave. Besides being an inequitable distribution of taxes, giving more to these landed property owners is likely to send a wrong signal to the masses. It will just encourage more people to park their wealth in property since they would not be “disadvantaged” in government transfer schemes.
2. Resources are finite
The government’s budget has to be prioritised and distributed among other competing needs like defence and education. There’s only so much left to be redistributed to the poor.
And if we classify this group as poor, we are just denying less help to the really needy. I am talking about people who are down to the bare minimum and living in rental flats, those with chronic illness and left with no assets to monetise.
These elderly like to compare themselves with some HDB dweller who drives a Mercedes and receives large transfers.
My rebuttal? They actually have the option to do that too and there’s no need to envy.
Instead, I prefer to compare these elderly with their less well-off counterparts who are also pioneers of Singapore. Instead of a landed property, they own flats and have stayed in it for more than 30-40 years.
The government has introduced studio apartments and monetisation schemes like the Lease Buyback Scheme and the Silver Housing Bonus to entice older folks to downgrade and transform their assets into cash for their daily needs. I am also pretty sure that fears of change and the desire to leave a bequest applies equally to these flat owners. But if they can move to HDB studio apartments, I don’t see why elderly landed property owners can’t downsize to a small condominium.
4. People who are receiving the bequest should do their part
Imagine this scenario:
This elderly landed property owner does not want to sell his home and receives some aid from government. As a result, his wealthy children do not need to provide much or even any allowance to the parents. After he passes away, the inheritance goes to the children who promptly sells the property and pocket the full proceeds. Who’s the loser/fool? *Drum roll*….Taxpayers.
If there’s somebody who’s going to inherit the property, they have the responsibility to take care and help supplement the present owner’s daily needs. If they can’t even provide an additional $500 a month, “the passing down of property down the family line” reasoning is just hollow. Chances are, the property is just going to be sold when the owner passes away.
I know I might appear very unsympathetic here. But to raise their hands and to say that they have not benefited from Singapore’s progress is nothing short of baloney? In fact, the best testimony to their good fortune is the massive appreciation of their property.
It is nothing short of unreasonable to ask for more help, especially if it is at the expense of their less well-off counterparts.