How much do Singapore's elderly need to achieve basic standard of living?

This includes housing and utilities, healthcare, transport, leisure and cultural activities.

A single person aged 65 or above will need $1,379 per month to meet his or her basic needs, according to a study by Lee Kuan Yew School of Public Policy (LKYSPP) at the National University of Singapore (NUS).

The analysis, which focused on four household types comprising men and women aged 65 years and older living alone, elderly couples 65 years and older, and men and women aged 55-64 living alone, found that ordinary members of society are able to come to consensus about what a basic standard of living in contemporary Singapore means.

Participants generated lists of items and services related to housing and utilities, things needed in a two-room HDB flat, personal care items and clothing, food, transport, leisure and cultural activities, and healthcare. Each item or service was only included if participants came to a consensus that it was a basic need, and could explain their reasons for its inclusion.

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The total weekly budgets required to meet basic standards of living were found to be $317 for single elderly households and $541 for coupled elderly households ($2,351 per month). For single persons aged 55-64, the weekly budget stood at $396, and at $1,721 per month.

Compared to household expenditure data, the overall shape of the elderly household budgets is strikingly similar to retired households’ actual expenditure patterns, the team of researchers noted.

“But there are two prominent differences. First, the percentage of actual expenditures on health amongst retired households is much higher than in our budgets. This may be explained by the assumption of good health for our case studies. As such, our budgets do not account for the cost of treatment for chronic conditions and major illnesses,” they explained. “Second, our budgets have much larger recreation and culture components than in actual expenditure. This reflects our participants’ strong emphasis on social participation needs and that such needs may not be fully met amongst the current older population.”

When put up against median work incomes, which came out at $2,000 for full-time workers aged 60 and above in 2017, this is about 1.5 times higher than LYKSPP’s projected budget for meeting basic standards of living amongst single elderly households.

Also read: Older workers could ease Singapore's labour crunch: report

That said, the researchers noted that there are gender differences, with median earnings for older women coming closer to the budget at just 1.3 times, compared to men’s 1.5.

“There are also concerns with particular occupations. The median monthly work incomes for the three most common occupations amongst older workers range from 0.9 to 1.2 times of the budget,” the researchers added. “Almost two-thirds of older workers are employed in these occupations, which are also the three lowest-paying occupations.”

They therefore noted that low work incomes amongst older people mean that employment alone does not ensure the achievement of budgets for basic standards of living.

In Singapore, the elderly are observed to place heavy dependence on family contributions, with limited support from the state. The most common income source is adult children (78% of elderly people reported such income in 2011), followed by wage work (21%), and the CPF or other annuities (13%). Other sources such as private pensions (4%) and public assistance (2%) are negligible in terms of coverage.

They further added that although CPF participation and savings are projected to increase with future cohorts, the basic retirement payment of less than $800, even after the most recent reforms, is only about half of the household budget for a single elderly person, and falls significantly short of what is required for a basic standard of living.

“The gaps in people’s capacity to meet basic standards of living must be urgently addressed so that all older people in Singapore can achieve what our participants describe as basic needs for a sense of belonging, respect, security, and independence,” the researchers underlined.