SINGAPORE: Singaporeans are set to pay higher premiums but also receive more payouts from CareShield Life from 2026.
The national scheme for disability insurance, which launched in 2020, recently underwent its first review by the CareShield Life Council. The government announced on Wednesday (Aug 27) that it accepted the council’s recommended changes to the scheme.
CareShield Life is compulsory for those born in 1980 or later. They start paying premiums from when they turn 30 until they turn 67 or develop severe disability and make a claim, whichever is earlier.
The scheme is optional for those born in 1979 or earlier, and those who join the scheme at age 59 and above have to pay premiums for 10 years. CareShield Life premiums can be fully paid from MediSave.
Here’s what you need to know about the changes to CareShield Life that will roll out from 2026.
From 2026, the annual growth rate of CareShield Life payouts will double from 2 per cent to 4 per cent, said the Ministry of Health (MOH) on Wednesday.
With the new growth rate, a policyholder making a claim in 2030 will receive S$806 (US$626) per month, compared to the S$731 per month they would have received if the annual growth rate stayed at 2 per cent.
Long-term care costs have been increasing at a rate that has outpaced general inflation and the current annual payout growth rate of 2 per cent, said MOH.
“If left unadjusted, payouts would cover a smaller portion of these costs over time,” the ministry said, noting that this is why the council recommended doubling the annual growth rate.
Singapore’s annual national long-term care expenditure has almost doubled from S$1.7 billion to about S$3 billion in the last five years, MOH noted.
“This is as more seniors require long-term care, with an ageing population. Costs are also increasing, due to evolving care needs of the population and inflation, driven by manpower and technology costs. Some of these trends are structural in nature, and likely to persist in the future,” the ministry said.
Among those who develop severe disability, half would stay in that state for at least four to five years, while three in 10 could remain in that state for 10 years or more, said MOH.
Premiums will need to increase to sustain the higher payouts, MOH said.
There will be a one-step increase in premiums in 2026 and they will then grow at 4 per cent each year. This is needed because CareShield Life premiums are only collected for a limited duration while the scheme's payouts are for life, the ministry said.
From 2026 to 2030, those enrolled in the scheme will see their premiums increase by an average of S$38 annually, up to S$75 each year, said MOH.
To keep premiums affordable, the council recommended that the government provide transitional support to policyholders.
On top of existing premium subsidies, the government will provide S$570 million in additional support. Of this sum, S$440 million will be used to moderate the premium increases for all affected policyholders, while the remaining S$130 million will be used to offer more support to low- to middle-income policyholders.
Without these support measures, annual premiums would have increased by S$126 on average in 2026 and grown by 4 per cent after that, instead of the expected average increase of S$38 per year.
The enhanced payouts and premiums will apply from 2026 to 2030, and will be reviewed after that, the ministry noted.
“The government is committed to helping Singaporeans manage the upcoming premium increase, and will ensure that no one will lose coverage due to an inability to pay their premiums,” said MOH.
The scheme is compulsory for those born in 1980 or later, and older cohorts have the option to enrol.
From CareShield Life’s launch, individuals with mild and moderate disability could enrol onto the scheme. This was a “time-limited measure” to enable more to benefit from the scheme, said MOH.
From 2026, only individuals without pre-existing disabilities will be able to enrol in the scheme. Someone with a chronic condition like diabetes can still enrol in the scheme as long as they are not disabled.
As of June this year, 1.93 million Singapore citizens and permanent residents aged 30 and above are covered under CareShield Life, with 535,000 covered under ElderShield, said MOH.
As of December 2024, S$2.8 billion in CareShield Life premiums had been collected, including about S$800 million of government premium support, said the ministry.
Under the CareShield Life scheme, policyholders with severe disabilities – defined as the inability to perform at least three out of six daily living activities, such as washing, feeding or dressing – receive monthly cash payouts.
This criteria will stay. Addressing calls to relax the criteria from being unable to perform at least three daily living activities down to two, MOH noted the “trade off” between affordability and the scheme’s features.
From the focus group discussions on possibly relaxing the criteria, there was a strong sentiment that the government should make sure that the scheme is affordable, said MOH.
Individuals who can afford to do so can also enrol in private schemes with more coverage or a lower threshold, said MOH, adding that those who are willing to pay more can assess those products.
As of 2024, there are 1,821 active claimants under the scheme, with more than S$26 million paid out in claims. The age of the claimants range from 30 to 93, with a median age of 52, said MOH.
This indicates that about half of the claimants under CareShield Life are in their 30s and 40s, said the ministry.
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The national scheme for disability insurance, which launched in 2020, recently underwent its first review by the CareShield Life Council. The government announced on Wednesday (Aug 27) that it accepted the council’s recommended changes to the scheme.
CareShield Life is compulsory for those born in 1980 or later. They start paying premiums from when they turn 30 until they turn 67 or develop severe disability and make a claim, whichever is earlier.
The scheme is optional for those born in 1979 or earlier, and those who join the scheme at age 59 and above have to pay premiums for 10 years. CareShield Life premiums can be fully paid from MediSave.
Here’s what you need to know about the changes to CareShield Life that will roll out from 2026.
HOW MUCH WILL PAYOUTS INCREASE BY?
From 2026, the annual growth rate of CareShield Life payouts will double from 2 per cent to 4 per cent, said the Ministry of Health (MOH) on Wednesday.
With the new growth rate, a policyholder making a claim in 2030 will receive S$806 (US$626) per month, compared to the S$731 per month they would have received if the annual growth rate stayed at 2 per cent.
Long-term care costs have been increasing at a rate that has outpaced general inflation and the current annual payout growth rate of 2 per cent, said MOH.
“If left unadjusted, payouts would cover a smaller portion of these costs over time,” the ministry said, noting that this is why the council recommended doubling the annual growth rate.
Singapore’s annual national long-term care expenditure has almost doubled from S$1.7 billion to about S$3 billion in the last five years, MOH noted.
“This is as more seniors require long-term care, with an ageing population. Costs are also increasing, due to evolving care needs of the population and inflation, driven by manpower and technology costs. Some of these trends are structural in nature, and likely to persist in the future,” the ministry said.
Among those who develop severe disability, half would stay in that state for at least four to five years, while three in 10 could remain in that state for 10 years or more, said MOH.
HOW MUCH WILL PREMIUMS INCREASE BY?
Premiums will need to increase to sustain the higher payouts, MOH said.
There will be a one-step increase in premiums in 2026 and they will then grow at 4 per cent each year. This is needed because CareShield Life premiums are only collected for a limited duration while the scheme's payouts are for life, the ministry said.
From 2026 to 2030, those enrolled in the scheme will see their premiums increase by an average of S$38 annually, up to S$75 each year, said MOH.
To keep premiums affordable, the council recommended that the government provide transitional support to policyholders.
On top of existing premium subsidies, the government will provide S$570 million in additional support. Of this sum, S$440 million will be used to moderate the premium increases for all affected policyholders, while the remaining S$130 million will be used to offer more support to low- to middle-income policyholders.
Without these support measures, annual premiums would have increased by S$126 on average in 2026 and grown by 4 per cent after that, instead of the expected average increase of S$38 per year.
The enhanced payouts and premiums will apply from 2026 to 2030, and will be reviewed after that, the ministry noted.
“The government is committed to helping Singaporeans manage the upcoming premium increase, and will ensure that no one will lose coverage due to an inability to pay their premiums,” said MOH.
WHO CAN JOIN THE SCHEME?
The scheme is compulsory for those born in 1980 or later, and older cohorts have the option to enrol.
From CareShield Life’s launch, individuals with mild and moderate disability could enrol onto the scheme. This was a “time-limited measure” to enable more to benefit from the scheme, said MOH.
From 2026, only individuals without pre-existing disabilities will be able to enrol in the scheme. Someone with a chronic condition like diabetes can still enrol in the scheme as long as they are not disabled.
As of June this year, 1.93 million Singapore citizens and permanent residents aged 30 and above are covered under CareShield Life, with 535,000 covered under ElderShield, said MOH.
As of December 2024, S$2.8 billion in CareShield Life premiums had been collected, including about S$800 million of government premium support, said the ministry.
WHO CAN MAKE A CLAIM?
Under the CareShield Life scheme, policyholders with severe disabilities – defined as the inability to perform at least three out of six daily living activities, such as washing, feeding or dressing – receive monthly cash payouts.
This criteria will stay. Addressing calls to relax the criteria from being unable to perform at least three daily living activities down to two, MOH noted the “trade off” between affordability and the scheme’s features.
From the focus group discussions on possibly relaxing the criteria, there was a strong sentiment that the government should make sure that the scheme is affordable, said MOH.
Individuals who can afford to do so can also enrol in private schemes with more coverage or a lower threshold, said MOH, adding that those who are willing to pay more can assess those products.
As of 2024, there are 1,821 active claimants under the scheme, with more than S$26 million paid out in claims. The age of the claimants range from 30 to 93, with a median age of 52, said MOH.
This indicates that about half of the claimants under CareShield Life are in their 30s and 40s, said the ministry.
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