Frequently Asked Questions

1. Purpose
2. Eligibility
3. $50 Contribution To CPF
4. Allotment Of Shares
5. Annual Value
6. Bonus Shares
7. NSmen Status
8. Closure and Exchanging ERS For Cash
9. Exchanging ERS For Cash
10. Others


1. Purpose

1.1 Why is the Government giving ERS?
The ERS is meant to help you cope with the increase in Goods and Services Tax (GST).The increase in GST is part of the restructuring of our tax system to create more and better jobs for Singaporeans. This restructuring also involves lowering corporate and personal income tax rates.

1.2 Why is ERS given out in three lots, instead of just one lot?
ERS is spread out in three different lots to help you cope with the additional GST you have to pay each year.

 
2. Eligibility

2.1 Who is eligible for ERS?
To qualify for each lot of ERS, you must meet the following criteria:

  • Be a living Singapore citizen as at 1 December of the preceding year;
  • Be at least 21 years old on 1 December 2002 (for the first lot of ERS);
  • Be at least 21 years old on 31 December of the preceding year (for the second and third lots of ERS); and
  • Put at least $50 into your CPF Account in the preceding year.

2.2 Can Permanent Residents (PRs) get ERS?
ERS, like New Singapore Shares, is given only to citizens. This is a privilege of Singapore citizenship.

 
3. $50 Contribution To CPF

3.1 Why do we need to contribute $50 to get the ERS?
The $50 contribution to your CPF account serves as an indication that you want the ERS. It is also meant to encourage you to maintain an active CPF account that helps provide for your retirement.

3.2 Do CPF investment gains or transfers between CPF accounts qualify as contributions to obtain ERS?
No. All passive contributions such as investment gains or transfers between CPF accounts do not qualify as contributions to obtain ERS. A fresh contribution of at least $50 is required to qualify for ERS.

 
4. Allotment Of Shares

4.1 How much ERS will I get?
The amount of ERS you will get will depend on the Annual Value of your home, based on IRAS's records on 1 December. Anyone who lives in a home with Annual Value of up to $10,000 will get $400. Those living in homes with Annual Value of more than $10,000 will get $200 worth of ERS. Almost all HDB flats have an Annual Value of up to $10,000. About 90% of Singaporeans will be given the higher amount.

Please refer to the following table:

ERS per Person
Year
Annual Value of Your Home
Up to $10,000
(This includes almost all HDB flats)
Above $10,000
2003
$400
$200
2004
$400
$200
2005
$400
$200
Total
$1,200
$600

Active NSmen will get an extra $200 worth of ERS and Inactive NSmen will get an extra $100 worth of ERS. The extra shares for NSmen will be given only once in full in the year they qualify.

4.2 How much will I get if I stay in a rented property?
The amount of ERS will depend on the Annual Value of the rented property.

4.3 When will I know how much ERS I will get?
You will be sent an ERS allotment package, showing the number of shares that will be given to you. If you contribute $50 into your CPF account before 30 November 2004, you will get this package in December 2004 and will be allotted your ERS on 1 January 2005. If your contributions are made in December 2004, you will be sent the package in January 2005 and will be allotted your ERS on 1 February 2005.

4.4 What if the ERS is still insufficient to cover the higher GST for me and my family?
Apart from ERS, the Government has also provided HDB rental and conservancy rebates, hospital GST subsidy and school GST subsidy to help you cover the GST increase. If your monthly household income is less than $3,600 and you find that the ERS and rebates are not sufficient to cover the additional GST over the next five years, you can approach your Citizens' Consultative Committee (CCC) for help.

 
5. Annual Value

5.1 What is Annual Value (AV)?
AV is the property value used to calculate the property tax of your home. The AV can be found on the property tax bill that you receive each year.

5.2 Why is AV used to determine the number of ERS, instead of income or flat-type?
Granting ERS based on income would be more equitable, but it will be a very complex exercise, and also very intrusive. To administer such a system will be both costly and complicated. Using AV is a good proxy for income. By using AV instead of flat-type, Singaporeans who do not live in HDB flats but in cheaper private property will also get the higher amount of ERS.

5.3 Why is the AV cut-off set at $10,000?
The AV cut-off of $10,000 covers about 90% of households, and includes all HDB flats (other than a few very large units), as well as smaller private residences such as walk-up flats and shop-houses. As Singaporeans staying in larger properties with AVs above $10,000 are likely to be earning higher incomes, and have higher personal tax rates, they will benefit more from the cuts in personal income tax and get less ERS.

5.4 If I own several properties, which AV will be used?
The AV will be based on the property reflected in your NRIC. By law, the NRIC address must show where you are staying. If it does not, you should update the address immediately at Immigration & Checkpoints Authority or any police station.

5.5 What happens when the AV of my house changes?
For each lot of ERS, we will use the AV of your house in your NRIC as of 1 December of the preceding year.

5.6 What is the AV if I stay in an old age home, nursing home or community hospital?
You will be given the same number of ERS as those living in homes with AV up to $10,000.

 
6. Bonus Shares

6.1 How is the bonus shares calculated?
Bonus shares will be given every year for all the ERS you still hold on 31 December of the previous year. They will be paid every 1 March, from Year 2004 to 2008. The bonuses will be calculated at a rate of 3% plus the real GDP growth rate of the preceding calendar year. You will earn the most bonus shares if you keep the ERS for 5 years.

 
7. NSmen Status

7.1 How do you define NSmen status?
NSmen status is based on the records from the Ministry of Defence, the Singapore Police Force and the Singapore Civil Defence Force as at 1 December 2002, 2003 and 2004 for the first, second and third lot of ERS respectively.

7.2 Why do NSmen get extra ERS?
It is to recognize NSmen's vital contribution to the security and well-being of Singapore.

7.3 What if my NSmen status changes after the first year?
Inactive NSmen who turn Active in subsequent years will be given a one-time top-up of $100 worth of ERS. But Active NSmen who turn Inactive in subsequent years will not be required to return any shares.

 
8. Closure and Exchanging ERS For Cash

8.1 How do I receive my ERS payment after the final dividends have been credited on 1 March 2008?
You do not have to do anything. After the final round of dividend is credited on 1 March 2008, all outstanding ERS will automatically be exchanged for cash at $1 per share each and paid out to beneficiaries by 7 April 2008.

If you have not encashed your ERS, you will receive a notification letter from CPF Board between 7 to 10 March 2008, informing you about the dividend payment and the total amount of ERS shares that you have. ERS will be paid automatically into your most recent bank account where your payment for GST Credits, Workfare Income Supplement, Progress Package, Economic Restructuring Shares and New Singapore Shares was received.

If you do not have a valid bank account in CPF Board's records, you will receive a cheque via mail by 7 April 2008 at your address based on CPF Board records or your NRIC address. However, if you wish to have your ERS directly credited into your bank account, please provide the Board with your bank account details by 24 March 2008.

If you have a valid bank account, but wish to have your ERS paid into a different bank account, you can provide the bank account details at the website (www.ers.org.sg) or by returning a completed hardcopy form to the CPF Board by 24 March 2008.

If you wish to receive your ERS via a cheque, instead of direct credit into your bank account, you may also indicate your request by returning the hardcopy form mentioned above by 24 March 2008.

8.2 How much ERS will I be paid?
You will receive a notification letter from 7 to 10 March 2008 on the total amount of ERS you have.

8.3 I cannot remember the bank details I provided for GST Credits, Workfare Income Supplement, Progress Package, Economic Restructuring Shares and New Singapore Shares. How do I check the bank account number?
Your GST Credits, Workfare Income Supplement, Progress Package, Economic Restructuring Shares and New Singapore Shares bank account number- whichever has been most recently credited, will be indicated in the notification letter to be sent to you from 7 to 10 March 2008.

8.4 I do not want my ERS to be paid into the bank account maintained with the Board. What should I do?
If you wish to have your ERS paid into a different bank account, please provide your new bank account details at www.ers.org.sg by 24 March 2008.

You can also indicate your bank account or ask for a cheque by returning a completed form (ERS/3) to CPF Board by 24 March 2008.

If you do not have a bank account and wish to convert your cheque into cash immediately, you may do so with your NRIC at any branches of OCBC bank.

An administrative fee of $4 is payable at the bank for exchanging ERS cheques for cash. The fee will be waived for those who are aged 62 and above.

8.5 Is there a deadline to exchange my ERS cheque for cash?
The deadline for encashing ERS cheques is 7 July 2008.

8.6 What happens if I fail to encash my ERS cheque? Will I lose my ERS?
No, you will not lose your ERS. If you do not encash your cheque by 7 July 2008, your ERS will be credited directly to your CPF Ordinary Account and will be subject to CPF withdrawal rules.

 
9. Exchanging ERS for Cash

9.1 My father (or immediate family member*) is bedridden/physically immobile or of unsound mind and does not have a bank account. How can I help my father encash his ERS cheque?
Please proceed to OCBC bank with the following documents:
(a) Original signed Letter of Authorisation from beneficiary (unless otherwise exempted by doctor's memo or medical report);

(b) Original documentary evidence stating your father's medical condition e.g. doctor's memo or medical report or court order. The date of the documents should not be more than 1 year before the cheque encashment. (Note: a doctor's memo or medical report can be dated more than 1 year before the encashment date if it specifically states that the patient's condition is permanent.);

(c) Both your original NRICs;

(d) Original documentary evidence of your relationship e.g. birth certificate, marriage certificate; and

(e) Your father's ERS cheque.

An administrative fee of $4 is payable at the bank for exchanging ERS cheques for cash. The fee will be waived for those who are aged 62 and above.

*Immediate family member refers to a parent, child, sibling or spouse and must be aged 21 years and above.

9.2 My friend (or non-immediate family member) is bedridden/physically immobile or of unsound mind, and does not have a bank account. How can I help my friend encash his ERS cheque?
As you are not an immediate family member of the beneficiary, please go to any CPF Service Centres with the following documents:

(a) Original signed Letter of Authorisation from beneficiary (unless otherwise exempted by doctor's memo or medical report);

(b) Original documentary evidence stating your friend's medical condition e.g. doctor's memo or medical report or court order. The date of the documents should not be more than 1 year before the cheque encashment. (Note: a doctor's memo or medical report can be dated more than 1 year before the encashment date if it specifically states that the patient's condition is permanent.);

(c) Both your original NRICs; and

(d) Your friend's ERS cheque

At the CPF Service Centre, you would have to sign a Letter of Indemnity. CPF Board will then issue you an instruction letter to the bank. Please bring the CPF Board's instruction letter to the bank together with your NRIC to encash the ERS cheque on your friend's behalf.

An administrative fee of $4 is payable at the bank for exchanging ERS cheques for cash. The fee will be waived for those who are aged 62 and above.

*Non-immediate family member must be aged 21 years and above.

9.3 My family member/friend is overseas and does not have a bank account. How can I help him encash his ERS cheque?
Your family member/friend may wish to check with his overseas bank whether the cheque can be deposited into his overseas bank account. Overseas banks may charge a fee and the charges vary from bank to bank.

OR

Cheque encashment by immediate family member
However, if your immediate* family member would like you to exchange his ERS cheque for cash on his behalf, please proceed to the bank issuing the cheque (OCBC), with the following documents:

(a) Original signed copy of his Letter of Authorisation stating his overseas address and authorising you to exchange his ERS cheque for cash;

(b) Photocopies of your immediate* family member's valid passport (personal particulars page) and NRIC;

(c) Your original NRIC;

(d) Original documentary evidence of your relationship e.g. birth certificate, marriage certificate; and

(e) Your immediate* family member's ERS cheque.

An administrative fee of $4 is payable at the bank for exchanging ERS cheques for cash. The fee will be waived for those who are aged 62 and above.

*Immediate family member refers to a parent, child, sibling or spouse and must be aged 21 years and above.

OR

Cheque encashment by friend/non-immediate family member
However, if your friend (or non-immediate family member) would like you to exchange his ERS cheque for cash on his behalf, please go to any CPF Service Centre with the following documents:

(a) Original signed copy of the Letter of Authorisation stating his overseas address and authorising you to exchange his ERS cheque for cash;

(b) Your original NRIC; and

(c) Photocopies of your friend's (or non-immediate family member) valid passport (personal particulars page) and NRIC.

At the CPF Service Centre, you would have to sign a Letter of Indemnity. CPF Board will then issue you an instruction letter to the bank. Please bring the CPF Board's instruction letter to the bank together with your NRIC to encash the ERS cheque on your friend's behalf.

An administrative fee of $4 is payable at the bank for exchanging ERS cheques for cash. The fee will be waived for those who are aged 62 and above.

*Non-immediate family member must be aged 21 years and above.

 
10. Others

10.1 What happens to the ERS if the beneficiary passes away?
The ERS will be exchanged for cash and the proceeds transferred to the deceased's CPF account for distribution, together with other CPF monies. Click here for more information on CPF nomination.

10.2 Are the ERS and bonus shares taxable?
No, they are not taxable.

10.3 Who can I contact if I have further questions on ERS?
For more information on the ERS, you can refer to this website or call the Ministry of Finance at
1800 226 0806 during office hours from 8.30am to 5.30pm on Mondays to Fridays.

 

2008 Government of Singapore