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Updated by CPF 5 found this helpful
I have already contributed up to the Basic Healthcare Sum (BHS). Why am I still required to participate in Contribute As You Earn (CAYE)?
As a self-employed person, you’re still required to make MediSave contributions even if you have met the Basic Healthcare Sum (BHS). This is the same for employees.
The MediSave amount above the BHS will be transferred to your CPF Special Account (SA)* or Retirement Account (RA). The BHS cap and overflow arrangement are intentionally planned to avoid over savings in MediSave and to supplement your retirement savings. These overflows which end up in your SA or RA can be withdrawn according to the withdrawal guidelines. If you’ve met the Full Retirement Sum in your SA or RA, the savings in excess of the BHS will be transferred to your Ordinary Account (OA). Savings in the OA can be used for other purposes such as housing repayment.
*The SA will be closed for members aged 55 and above from early 2025. Read more via this link.
This information is sourced from CPF.
Related questions
Do I have to top up my MediSave Account to the Basic Healthcare Sum if I start withdrawing my CPF savings from age 55?
I have saved the Basic Healthcare Sum (BHS) in my MediSave Account (MA). What happens to the savings in my MA above the BHS?
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Do I still have to contribute to MediSave as a self-employed person even though my MediSave balance has reached the Basic Healthcare Sum (BHS)?
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