Splitting the HDB Flat and the CPF Monies on Divorce by uploaddoc

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									      FEATURE


      Splitting the HDB Flat
      and the CPF Monies on
      Divorce
      What to ask and tell a divorce client when taking instructions on ancillary matters; what information to prepare before a mediation
      session.


      This article is intended for those doing        regarding what assets your client and her      i    Does the client or her spouse have
      family work, particularly those who are         spouse have (eg matrimonial flat, monies            CPF monies? How much money,
      new to such work. It sets out the various       in bank accounts, shares, insurance etc)            and in which account (ie Ordinary,
      questions that you as a lawyer may wish         is the standard form Affidavit of Assets            Special, Medisave, Retirement and2
      to ask your client, and the various issues      and Means (Form 35 of the Subordinate               Living Expenses Account(s))? 3
      you may wish to draw to her attention           Courts Practice Directions (2006
      when taking instructions regarding the          Edition)). The Word document of this           ii   Does the client or her spouse have a
      ancillary matters, and when preparing           form may be found on the Family Court               CPF investment account? How much
      for a mediation session. The article            website at http://app.subcourts.gov.sg/             money is available in the investment
      focuses on a simple scenario where the          family/page.aspx?pageid=8572#1.                     account and what are the types of
      matrimonial assets consist of an HDB flat                                                           investments purchased under the
      in either or both the parties’ names, and/      For each asset, you may wish to ask your            CPF investment scheme?
      or the parties’ CPF monies. It explores the     client:
      options available to parties in the light                                                      As stated earlier, CPF investments
                                                      a Whose name is the asset in
      of the recent amendments to the Central                                                        are beyond the scope of this article.
                                                          (where applicable)?
      Provident Fund Act (Cap. 36) (the ‘Act’)                                                       However, there is a guide available
      which came into operation on 1 October                                                         on the CPF website which provides
                                                      b   Who paid the purchase price?               information on the transfer/sale of CPF
      2007, and which deal with the division
      of CPF-related assets in matrimonial                                                           members’ investment holdings under
                                                      c   Whether there is any proof                 the CPF Investment Scheme - Ordinary
      proceedings. The article does not deal in           of this payment, eg bank statements,
      detail with other matrimonial assets such                                                      Account, and the CPF Investment Scheme
                                                          receipts, etc.                             - Special Account. Before deciding
      as CPF investments, HDB housing policies
      nor what constitutes a fair and equitable                                                      whether to include the CPF Investment
                                                      If your client says that she paid cash for     Scheme (‘CPFIS’) investments as part of
      division of the matrimonial assets.
                                                      the asset, then you may wish to ask her        the matrimonial assets for division, you
                                                      where she obtained the cash from (eg           and your client may wish to go through
      The questions and issues set out in this
                                                      loan from relatives, savings etc.), together   this step-by-step guide to understand
      article are not intended to be either
                                                      with any supporting documentation              the efforts involved to transfer/sell CPFIS
      prescriptive or exhaustive, but only a
                                                      (eg pay-slips, bank statements, IOU to         investments pursuant to a court order.
      general guide. Every lawyer must decide
                                                      relatives).
      for himself what he wants to ask and tell
                                                                                                     The above guide can be found at http://
      his client based on the circumstances of
                                                      If your client claims cash for the asset       mycpf.cpf.gov.sg/CPF/my-cpf/make-
      that particular case.
                                                      was obtained from work, then you               invest/M15.htm )
                                                      may wish to ask her to state the type
      The article is written on the assumption                                                       b    Documents to be obtained from the
      that your client is the Plaintiff wife in the   of work, when she worked, how much
                                                      she earned, together with supporting                client:
      divorce.1 The questions to be asked should
      be the same, however, if your client is the     documentation (eg pay-slips, a letter          i    CPF statements for the relevant accounts
      Plaintiff husband in the divorce.               from her employer).                                 – Ordinary, Medisave, Special,
                                                                                                          Retirement and Living Expenses
      Establishing What the Matrimonial               1.2 Specific questions for specific assets          accounts (where applicable).
      Assets Are, and the Parties’
                                                                                                     ii   CPF        investment       account
      Contributions to Them                           1.2.1 Central Provident Fund (‘CPF’)                statement (where applicable).
                                                      monies
      1.1 The matrimonial assets                      a   Questions     you    may     wish    to    c    How to obtain           the    relevant
      A good guide on what questions to ask               ask:                                            documents:


      April	2008
	                              	
                                                                                                                FEATURE

i    The client should be able to obtain           client’s direct financial contributions       account, and no other monies in
     her own statements, either by                 versus her spouse’s direct financial          any other CPF account. The pledged
     downloading a copy4 from the CPF              contributions to the flat?                    amount (including accrued interest)
     website at http://mycpf.cpf.gov.sg/                                                         is $12,000, but the total amount he
     Members/home.htm, or by attending         vi How much has to be returned to                 used to purchase the flat (including
     personally at the CPF Board main             each party’s CPF accounts upon sale            accrued interest) is $16,000. Assume
     office or the various CPF service            of the flat?                                   the minimum sum requirement for
     centres around the island during                                                            the Member is $90,000. The net sale
     office hours.5                            Note: If the party (ie the ‘Member’) is 55        proceeds of the flat less the HDB loan
                                               years old and above, at present the CPF           are $150,000. Assume that no other
ii   If the client does not have a copy of     Board does not require the full amount            party used CPF monies to purchase
     her spouse’s CPF statement, then you      of the minimum sum deficiency to be               the flat. When he sells the property
     can make an oral application (usually     returned to the client’s CPF account, only        before, on or after 1 January 2009,
     at the ancillary pre-trial conference)    the property pledge amount.7 But from 1           he has to refund the amount he used
     for a court order in the standard form    January 2009 onwards, such a Member               to purchase the property, including
                                               will have to return an amount sufficient to       accrued interest, ie $16,000. He
     provided by the CPF Board (the ‘CPF
                                               make up the deficiency in the minimum             need not top up his minimum sum
     order’). It would be good practice
                                               sum, including the shortfalls for the cash        shortfall at this point, but only during
     to e-file the draft CPF order for the
                                               portion of the minimum sum, if any. If            future withdrawals. Thus, he will be
     court’s reference at least two days
                                               there is no deficiency in his minimum             able to obtain net sale proceeds from
     before the pre-trial conference. The
                                               sum at the time the property is sold, then        the flat of $134,000 in cash, after
     CPF order requests the CPF Board to
                                               he does not have to make any refund to            making the necessary refunds to his
     furnish information to the Plaintiff’s
                                               his account.8 However the refunds will            CPF account.
     solicitors regarding the Defendant’s
                                               be capped at the principal amount used
     CPF monies in the following areas: (i)                                                  vii Is there any outstanding Government
                                               to purchase the property, together with
     the amount of CPF monies (including       accrued interest.                                 loan/ grant that has been paid into the
     interest) utilised by the Defendant to                                                      CPF account of the spouse that must
     purchase the matrimonial flat; (ii) the   For example:                                      be paid back to the Government?
     amount of CPF monies standing in
     each and every one of the Defendant’s     1   The Member is now 58 years old.           For example:
     CPF accounts as at the date of service        He only has $5,000 in his retirement      1 The HOPE grant: HOPE (‘Home
     of the CPF order on the CPF Board;            account, and no other monies in               Ownership Plus Education’) is
     and (iii) information regarding               any other CPF account. The pledged            a government scheme to help
     the Defendant’s CPF investment                amount (including accrued interest)           low-income families to keep
     account. A Word document of the               for his flat is $40,000, but the total        their families small and upgrade
     standard CPF order may be found               amount he used to purchase the                themselves. There is a substantive
     at the Family Court website at http://        flat (including accrued interest) is          housing grant provided under
     app.subcourts.gov.sg/family/page.             $90,000. Assume the minimum                   HOPE which may have to be repaid
     aspx?pageid=3747                              sum requirement for the Member is             to the government upon divorce.9
                                                   $90,000. The net sale proceeds of the         The client should check with the
1.2.2      HDB flat                                flat less the HDB loan are $150,000.          Community Development Council
                                                   Assume that no other party used CPF           which put her and her spouse onto
a    Questions    you     may    wish    to
                                                   monies to purchase the flat. When             the scheme as to how much of the
     ask:6
                                                   he sells the property on or after 1           housing grant, if any, has to be
                                                   January 2009, he has to refund an             returned upon divorce.
i    What is the present value of the
                                                   amount to cover the deficiency in
     HDB flat?
                                                   his minimum sum which is $90,000          2   Where the marriage is annulled
                                                   - $5,000 = $85,000. Thus, after               rather than dissolved through divorce
ii   What is the present outstanding
                                                   refunding the necessary amounts to            – any housing grant given by HDB
     loan on the HDB flat?                                                                       may have to be returned to HDB, and
                                                   his CPF account, the Member will
                                                   be able to obtain $65,000 of the              the client should check with HDB if
iii Did the client or her spouse use any           net sale proceeds of the flat in cash.        this is the case.
    CPF monies to purchase the HDB                 However, if the Member has managed
    flat? If so, how much was used?                to set aside the full minimum sum in      It is important to ask this question
                                                   cash in his CPF account, there is no      because this type of information will
iv Did the client or her spouse                    deficiency in the minimum sum and         not be reflected in the parties’ CPF
   use any cash to purchase the                    so no refunds are required if he sells    statements.
   HDB flat? If so, how much was                   the flat.
   used?                                                                                     b   Documents to obtain:
                                               2   The Member is now 58 years old.
v    What is the proportion of the                 He only has $5,000 in his retirement      i   A print-out from the internet showing

                                                                                                                                April	2008
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      FEATURE

           the resale transactions of flats in the   1.3.2. Non-financial contributions                   is the client claiming (eg the client
           same block/street as the matrimonial                                                           wants the flat transferred to her and
           flat.                                     a   Did the client help the spouse in any            is willing to pay her spouse a cash
                                                         business? If so – what did she do?               consideration of $10,000 and to
      ii   Proof of any cash payments                                                                     refund the CPF monies he used
           made by your client towards the           b   Did the client help the spouse                   to purchase the flat together with
           property (eg bank statements,                 in other ways – eg pay his debts?                accrued interest; or the client wants
           receipts).                                                                                     the flat to be sold in the open market
                                                     c   Did the client look after            the         and to claim 30per cent of the net
      iii CPF statements of both parties                 children – solely or with help?                  sale proceeds, etc.)
          showing how much CPF monies
                                                     d   Did the client help to look after her
          each party spent to acquire the                                                            Note:
                                                         spouse’s relatives (whom did she
          matrimonial flat.                                                                             When using the term ‘net sale
                                                         look after, when did she look after
                                                                                                        proceeds’, it is important to clarify
                                                         them, and how)?                                just what exactly it is – eg, is it
      c. How to obtain them:
                                                                                                        the sale proceeds net of (i) the
                                                     e   Did the client do all, most or
      i    You can download the website                                                                 outstanding mortgage loan; (ii) each
                                                         some of the housework and
           ‘valuation’ yourself from www.                                                               party’s CPF monies used to purchase
                                                         household chores?
           hdb.gov.sg;     click on  ‘Resale                                                            the flat together with accrued interest
           Transactions’10.                          f   Did the client have to work to                 and (iii) costs and expenses of sale;
                                                         supplement the household income                or the sale proceeds net of (i) only?
      ii   Your client should be able to furnish         because her spouse gave insufficient
           her own CPF housing statement (see            maintenance?                                c    For HDB flats bought with HDB
           paragraph 1.2.1.c (i) above) and proof                                                         loans, the sale proceeds (including
           of cash payments, where applicable.       g   What else did the client do for the              the option monies) will be used to
                                                         welfare of the family? (For eg take              pay off the following, in the order of
      iii If the client’s spouse’s CPF housing           loans to pay for furniture, pay for other        priority stated below:11
          statement is not available, then you           persons’ medical expenses etc.)?            i    outstanding HDB loan
          may make an oral application to the
          court for the standard CPF order,          You may also wish to ask the converse           ii   HDB resale levy (if any)
          which would request the CPF Board          of the questions above – ie whether the
          to furnish this information. (See          client’s spouse helped the client with her      iii required CPF refunds
          paragraph 1.2.1. c (ii) above).            business, to pay her debts, to take care of
                                                     the children etc.                               iv costs, expenses and disbursements
      1.3 Other questions to ask                                                                        relating to the sale and thereafter any
                                                     1.4. Others                                        balance to be divided between the
                                                                                                        parties, as the court sees fit
      You may wish to ask the following              Was there any agreement made between
      questions in order to establish the            the parties on the division of the              d    For HDB flats purchased with private
      parties’ indirect financial contributions      matrimonial assets?                                  housing loans, the priority for the
      to the matrimonial assets, and financial
                                                                                                          distribution of sale proceeds is as
      and non-financial contributions to the         If so, are there any documents to prove this?        follows:12
      household:                                     (For eg, a deed of separation containing        i    settlement of outstanding private
                                                     terms relating to the matrimonial assets,            housing loan;
      1.3.1 Indirect financial contributions         or a pre-nuptial agreement)
      to the household                                                                               ii   settlement of requisite CPF refunds;
      Who paid for:                                  What the Client Wants to Claim                       and
      a renovations and/or conservancy fees,
        for the matrimonial flat                     The next set of questions you may wish          iii settlement of costs, expenses, charges,
                                                     to ask focuses on what the client wishes            commissions and disbursements
      b    utilities;                                to claim in respect of the matrimonial              relating to the sale; and thereafter
                                                     assets. Specifically, what does the client          any balance to be divided between
      c    property tax;                             wish to claim in respect of:                        the parties, as the court sees fit.

      d    phone bills;                              2.1 The HDB flat:                               2.2 The spouse’s CPF monies
                                                                                                     Ie, does she want a share of the spouse’s
      e    groceries; and                            a   whether to dispose of or retain             CPF monies, or is she willing to give the
                                                         the flat (ie, transfer, sale, or            spouse a share of her CPF monies?
      f    children’s school fees etc.                   surrender); and
                                                                                                     Exploring the Different Options
      Your client should provide receipts or         b   the division of the flat – what
      other proof of payment.                            proportion of the value of the flat         Next, you would have to assess how


      April	2008
4	                              	
                                                                                                                     FEATURE

practical the client’s claim is, in the light   transfer of or charge on her spouse’s CPF        b    Conversely, the spouse should be
of the size of the matrimonial assets,          monies.13                                             aware that:
the relevant CPF rules and regulations,                                                               The order for transfer/the charge will
and the client’s financial resources or         Differences      between    transfer    and           take priority to the spouse’s right
the financial resources that she could          charge:                                               to withdraw or transfer his CPF for
potentially raise.                                                                                    various purposes, namely:
                                                3.1.2    Immediate transfer of the
You may wish to ask your client the             spouse’s CPF monies into the client’s            i    Withdrawal for housing purposes.
following information:                          account.
                                                                                                 ii   Withdrawal for investment purposes
a   Is your client/her spouse              a    The order for transfer can be made to take            under CPFIS.
    Singaporean or Singapore PR?                effect immediately, or upon payment/
                                                refunds to the spouse’s CPF account from         iii Top-up of the spouse’s             family
b   Are your client and her spouse above        sale of property, investments, etc.                  members’ CPF accounts.
    or below 55 years of age? If they are
    below 55 years, are they close to 55                                                         iv Top-up the spouse’s special, Medisave
                                                a    You may wish to advise your client
    years or far away from 55 years?                                                                and retirement accounts.
                                                     that:
                                                i    The transferred monies from the
c   Is your client a bankrupt?                                                                   v    Payment of tuition fees under the CPF
                                                     spouse’s account will go into her CPF
                                                                                                      Education Scheme and in priority to
                                                     account. She cannot take the money
If the client’s spouse is turning 55 years                                                            every deduction the CPF Board is
                                                     out until she reaches 55 years or
soon, and your client intends to claim a                                                              entitled to make (eg deduction for
                                                     satisfies other withdrawal conditions
share of his CPF monies, you may wish                                                                 payment of insurance premiums
                                                     under CPF laws. However she may
                                                                                                      under various insurance schemes:
to expedite the matter, to ensure that he            apply to use these monies under                  Home Protection Insurance Scheme,
does not turn 55 years and withdraw his              various CPF schemes, for example                 Dependants’ Protection Insurance
CPF monies before an order of court for              for the purchase of property or for              Scheme, Medishield Scheme).19
the transfer of the monies to your client,           payment of housing loan.
or a charge on the CPF monies in favour
                                                                                                 So the spouse may not have enough
of your client, can be made, extracted          ii   If she does not have a CPF account,         monies left in his account after the
and served on the CPF Board.                         CPF will open an account for her            transfer to pay for these insurance
                                                     when they transfer the monies               schemes, which may then lapse.
3.1. Options for a client who is a Sin-              pursuant to the court order.
gaporean/Singapore PR and seeking a                                                              3.1.3      Charging order
share of her spouse’s CPF monies                iii Loans or grants repayable by the
                                                    spouse to the government (eg HOPE            The client can apply for a charge on the
3.1.1. CPF monies: transfer or                      grant, housing loan in nullity cases)        spouse’s CPF monies, to have a certain
charging order?                                     will be deducted before a transfer is        share of these monies paid out to her
The client has two options: to apply for a          effected.18                                  when he turns 55 years old. But the


    TRANSFER14                                                          CHARGE15
    Not subject to the spouse’s obligations to set aside Minimum Sum    Subject to the spouse’s obligations to set aside MS/ MMS and
    (‘MS’)/ Medisave Minimum Sum (‘MMS’) and the restrictions           restrictions on withdrawals imposed on bankrupt
    on withdrawals imposed on bankrupts

    Greater certainty as to the amount that your client will receive    Even if there are sufficient moneys in the spouse’s CPF account(s)
    as long as the ex-spouse’s CPF account(s) has sufficient monies     at the time the order is made (or is to take effect) to satisfy the
    at the time the order is made or is to take effect (and is served   charged amount, the amount that your client ultimately receives
    on the Board)                                                       may be affected by the spouse’s obligations to first satisfy the MS
                                                                        / MMS and restrictions on withdrawals imposed on bankrupts

    Amount transferred will go to the client’s CPF account              Amount charged will be paid to the client in cash

    The client is only able to withdraw this amount when he/ she        The client is only able to obtain this amount when the spouse
    turns 55 but can utilize it under various CPF schemes               turns 55

    The client must comply with MS/ MMS requirements when he/
    she withdraws this amount

                                                                                                                                       April	2008
                                                                                                                                                	   5	
      FEATURE

      spouse has to comply with the MS and          the MS and MMS requirements, and                  is 55 years but there is a deficiency
      MMS requirements, and the restrictions        the restrictions on withdrawals by                in the MS which she is required
      on withdrawals by undischarged                undischarged bankrupts.21 But she too             to set aside, then she must pay a
      bankrupts. Government loans or grants         can only be paid the money in cash after          certain amount back into her own
      will also be deducted before monies           the Member has died, turned 55 years,             account29.
      charged can be paid to the spouse.            etc. Government loans or grants will also
                                                    be deducted before monies charged can        ii   There will be an undertaking to
      3.1.4 What option should the client           be paid to the client.22                          be given by the client to repay the
      take?                                                                                           amount.30 This amount would be
                                                    3.3 HDB flat in the names of either or            either the deficiency in the client’s
                                                    both the parties                                  MS if she is 55 years and above at
      You may wish to advise the client to
                                                                                                      the time of sale; or if she’s below
      consider:
                                                                                                      55 years at the time of sale, the
                                                    3.3.1 If you have a Foreign Client23 or           amount which the spouse has given
      a   How much money she can get under          the HDB flat (the matrimonial flat) is            an undertaking to refund in respect
          either option                             to be sold on the open market:                    of his MS, but which the court has
                                                                                                      not ordered to be refunded when
      You should do the calculations to find        a   If there is an undertaking to refund24        ordering the immovable property to
      out the difference between the sum that           given by the spouse in relation to the        be transferred to the client.31
      the client could get transferred to her           withdrawal of the MS:
      and the sum that she could charge, so                                                      iii The spouse should be aware that he is
      that the client can decide which is the           Before the HDB flat may be                   expected to meet his MS requirements
      better option. (Note that if the spouse is        transferred to your client or sold in        at subsequent withdrawals, though
      an undischarged bankrupt, there will be           the open market, the MS withdrawn            he will not be required to top-up his
      restrictions on withdrawals of his CPF            by the spouse must be paid back              MS at the time of the transfer of the
      monies in a charging order situation as           before the spouse’s obligation               property to the client.32
      the spouse has to set aside an additional         under the undertaking to refund is
      sum in the Living Expenses Account.)              discharged (unless the undertaking       b    Where there is a charge on an HDB
                                                        has been previously discharged,               flat in relation to CPF money used to
      b   When she will be able to get the              eg if the spouse is suffering from a          purchase, upgrade etc. the property:
          money under either option                     terminal illness or disease25)
                                                                                                      The HDB flat can be transferred (but
      Ie, how close is she/her spouse to the age    b   If the spouse has used CPF monies to          not sold) to the client, without the
                                                        purchase, upgrade etc. the HDB flat:          spouse or the client having to pay
      of 55 years? If the spouse is nearing 55
                                                                                                      back any of the spouse’s CPF monies
      years, then it may make more sense for
                                                        The monies must be paid back at the           or even enough to make up his
      the client to have a charging order on the
                                                        point of sale before the charge on the        MS33. However, when the property
      spouse’s CPF monies instead of a transfer
                                                        HDB flat can be cancelled.26                  is subsequently sold, the client must
      order. Then once the spouse turns 55                                                            refund into her own account (i) the
      years, the client can apply to the CPF                                                          CPF monies she used to purchase
      Board to have the monies charged paid         3.3.2 If the client is a Singaporean/
                                                    Singapore PR:                                     the property, together with accrued
      to her in cash.                                                                                 interest; and (ii) the CPF monies the
                                                                                                      spouse used to purchase the property
                                                    a   If there is an undertaking to refund
      On the other hand, if the monies are                                                            (including the MS secured by the
                                                        given in relation to the withdrawal of
      transferred to the client’s CPF account                                                         former charge on the property),
                                                        the MS:
      under a transfer order, prior to being able                                                     which were not ordered by the Court
      to withdraw the monies, the client may                                                          to be repaid at the point of transfer,
                                                        The spouse’s interest in the property
      use the monies in the same way as any                                                           together with accrued interest. There
                                                        can be transferred (but not sold)
      other CPF contributions, for payments                                                           will be a charge on the property to
                                                        to your client.27 In this event, the
      under the various CPF schemes, e.g.                                                             secure this repayment.
                                                        CPF Board will not enforce the
      housing, investment, etc.
                                                        undertaking given to refund the               For example (where both client and
                                                        MS.28 The Court may, but need not,            spouse are below 55):
      3.2 Client who is not a Singaporean/Sin-          order the MS or part thereof to be
      gapore PR (‘Foreign Client’) and who              paid back either by the client or the
      wants to claim a share of her spouse’s                                                          The spouse used $100,000 of his
                                                        spouse at the point of transfer of the        CPF monies to purchase the HDB
      CPF monies                                        HDB flat. You may wish to advise              flat, and the client used $50,000 of
                                                        the client that:                              her CPF monies to purchase the HDB
      A Foreign Client can get a charging order                                                       flat. The Court orders the spouse to
      on her spouse’s CPF monies20 without          i   When the flat is eventually sold, and         transfer his share of the flat to the
      the spouse having to first comply with            she has not turned 55 years, or if she        client and $20,000 to be paid to the

      April	2008
6	                             	
      FEATURE

          spouse’s account by the client upon
          transfer. Thus, the spouse will not
          be refunded (and hence ‘loses out’
          on) the $80,000 of his CPF monies
          which he used to purchase the HDB
          flat. At the time of transfer, the client
          would have to pay $20,000 into
          the spouse’s account. At the time of
          disposal of the property by the client
          in the future, the client would have
          to refund her own $50,000 with
          accrued interest and $80,000 (the
          amount that the spouse should have
          been paid back, but he ‘lost out’ on
          at the ancillary matters hearing) with
          accrued interest.34 Any government
          loans and grants repayable by the
          spouse must be deducted before the
          transfer can be effected.35

      Is the Client’s Claim in Respect of
      the Matrimonial Assets Fair?

      The previous section dealt with the
      issue of what your client’s options are,
      and hence whether her claims were
      practical. However, the next question
      which has to be asked is whether her
      claims are fair. This is the key question
      that has to be answered in order to
      advise the client on what would be a fair
      settlement at mediation, and her best and
      worst possible outcomes at a hearing. To
      answer this question you need to know:

      a   What proportion of the matrimonial
          assets the client is claiming

      b   How much the client has contributed
          to these assets directly (as per
          paragraph 1.1 and 1.2 above); and

      c   What indirect financial and non-
          financial contributions the client
          has made for the household (as per
          paragraph 1.3 above)

      To establish the position in a. above you
                                                      Calculations:
      may wish to do the calculations for the
      client’s claim, using the information that
                                                      i   Net sale proceeds of the HDB flat:
      you have obtained.
                                                          $200,000 less $70,000 less ($40,000 + $20,000) = $70,000
          For example:                                ii Monies in the spouse’s CPF account after the flat is sold:
                                                          $50,000 + $40,000 = $90,000
          The spouse has $50,000 in his CPF           iii Monies in the client’s CPF account after the flat is sold: $20,000 + $20,000 =
          Ordinary Account at present, and has            $40,000
          used $40,000 from his CPF (including
          accrued interest) to purchase the HDB       Total pool of matrimonial assets: $70,000 (net sale proceeds of HDB flat) + $90,000 (OP’s
          flat. The client has $20,000 in her         CPF monies including CPF refunds from sale of flat) + $40,000 (AP’s CPF monies including
          CPF Ordinary Account, and has used          CPF refunds from sale of flat) = $200,000.
          $20,000 from her CPF (including

      April	2008
8	                              	
                                                                                                               FEATURE

   accrued interest) to purchase the          aggrieved party the other party’s monies      inform the CPF Board once the HDB flat
   HDB flat. The valuation of the HDB         should be transferred into).                  has been sold by serving the appropriate
   flat is $200,000 and the outstanding                                                     notice in writing on them. The notice
   HDBloan is $70,000.                        5.3 For all orders in relation to transfer    has to state the date of the refunds or
                                              and charging of CPF monies, and trans-        payments into the spouse’s CPF account,
The client’s claim:                           fer/sale of property involving refunds of     and the amount refunded or paid.39 It is
If the client is claiming all the net sale    CPF monies                                    important that she informs the CPF Board
proceeds of the HDB flat, ie $70,000, as                                                    quickly, in case the spouse turns 55 years
well as $30,000 of the other party’s CPF      You should remember to inform the             and withdraws the monies which have
monies, then that gives her 50 per cent       court if there is any amount to be repaid/    been put into his account.
of the matrimonial assets. ($100,000          refunded to the government, before
divided by $200,000).                         seeking any order to transfer, charge or      6.2.1 How to serve this notice?
                                              refund CPF monies.
Armed with this information, you may                                                        The notice must be served by leaving
then proceed to make an assessment            After the Making of the Consent               the document with the CPF Board
as to whether the client’s claim is fair,     Order                                         (Retirement    Schemes     Department,
taking into account all the factors set out                                                 Applications Section, CPF Building,
in Section 112 of the Women’s Charter                                                       79 Robinson Road, Singapore 068897)
                                              6.1 Service of court orders36
(Cap. 353) (ie both parties’ direct and
                                                                                            between 8:30 am – 5 pm on any working
indirect contributions, the length of the
                                              Orders for transfer of monies from the        day (not Saturdays, Sundays or public
marriage, the needs of any children of
                                              spouse’s to the client’s account, or          holidays), and between 8:30 am and 12
the family etc.)
                                              charging orders on the spouse’s account       pm on any working day which is the eve
                                              must be extracted and served on the CPF       of New Year’s Day, Chinese New Year or
Recording Consent Orders
                                              Board before the Board will effect the        Christmas Day.
                                              transfer/charge the monies.37 Therefore
5.1 Suggested clauses
                                              once a court order is extracted, the          In cases where the payment or
                                              CPF Board must be served as soon as           repayment is made or is to be made from
The CPF Board has come up with                possible.                                     the proceeds of the sale or disposal of
suggested clauses (CPFB Revised                                                             any investment made by the client/her
Version 28-09-2007) for the transfer and      The court order must be served by             spouse, then the notice can be served
charging of monies in CPF accounts,           leaving it with any officer or employee       as above, except that the form for
the transfer of property, and the transfer    of the CPF Board at the CPF Board             the notice must be obtained from the
or sale of investments under the CPF          (Retirement     Schemes      Department,      Board. A more convenient and faster
investment scheme. Copies of these may        Applications Section, CPF Building,           method would be by electronic means
be found at the Family Court website at       79 Robinson Road, Singapore 068897)           (this means that the CPF Member who
http://app.subcourts.gov.sg/family/page.      between 8:30 am – 5 pm on any working         is ordered to dispose of his investments
aspx?pageid=3747. It would be good            day (not Saturdays, Sundays or public         can log on to his personal CPF account
practice to refer to these when drafting      holidays), and between 8:30 am and 12         online via Singpass to notify the Board
orders in relation to CPF-related assets.     pm on any working day which is the eve        of such payment/repayment of proceeds
                                              of New Year’s Day, Chinese New Year           of the sale or disposal of investments.
5.2 Orders for transfer of CPF monies         or Christmas Day. Please note that the        Currently this is the only permitted
                                              Regulations specifically state that it must   electronic means of notification).
When recording an order for the transfer      be served on the Retirement Schemes
of CPF monies, you should ensure that         Department; thus serving it on another
                                                                                            6.3 Charging orders
the order specifies which CPF accounts        department will not suffice.
of the spouse the monies should be
transferred from. You do not, however,        6.2 Notification of refunds to CPF            If your client has obtained a charging
have to specify the client’s accounts to      accounts38                                    order against the spouse’s CPF monies,
which the monies are to be transferred                                                      then after the spouse has turned 55, she
to, as CPF Board will transfer the                                                          will be allowed to withdraw the monies.
                                              If there are to be monies transferred or
monies to the accounts in accordance                                                        At that point she has to apply to the CPF
                                              charging orders made on the spouse’s CPF
with its laws. Usually the transfers will     monies only after refunds or payments         Board to withdraw the monies. You may
be to the corresponding accounts.             of certain monies into the spouse’s CPF       wish to advise her to take note of when
eg $30,000 in the spouse’s Ordinary           account, then the CPF Board has to be         the spouse turns 55 years, so that she
account will be transferred to the client’s   notified when the refunds or payments         can go to the CPF Board main office or
Ordinary account. (See Regulation Three       have been made (eg when the HDB               service centres to make the necessary
(Designated Account) of the Central           flat has been sold and the CPF monies         application.
Provident Fund (Division of Fund-Related      used to purchase the property have been
Assets in Matrimonial Proceedings)                                                          Lim Hui Min40
                                              returned to the spouse’s CPF account).
Regulations 2007 (the ‘Regulations’) for                                                    Legal Aid Bureau
details regarding which accounts of the       You may wish to advise the client to          E-mail: LIM_Hui_Min@lab.gov.sg


                                                                                                                              April	2008
                                                                                                                                       	   9	
      FEATURE

          Notes                                                     Redevelopment Scheme (‘SERS’)          24 A Member may withdraw part of
          1 The term ‘divorce’ as used in                           etc. Information on HDB’s rules,          his MS by giving an undertaking
             this article will also be used to                      regulations and policies may be           to refund his MS if a property
             refer to annulments of marriage                        found on their website at: www.hdb.       that he owns (either jointly or
             and judicial separation (where                         gov.sg.                                   with his spouse or with related
             applicable).                                                                                     individuals) is sold. His property
                                                                7   Note that under sections 15(9) to         can be pledged for up to 50% of
          2    The Retirement Account is for                        10(A) of the Act, a Member may            the MS. (See Section 15(9) and
               members who have reached 55                          pledge his property to withdraw his       (9A) of the Act.)
               years of age. When a Member                          minimum sum up to the maximum
               reaches 55, he will need to                          pledge component allowed under the     25 See Section 15(8) of the Act,
               set aside his Minimum Sum,                           various Minimum Sum Regulations,          specifically sub-paragraph (g).
               using the savings in his Special                     which is generally only up to 50% of
               and Ordinary Accounts, in the                        the minimum sum.                       26 Section 15(11) of the Act.
               Retirement Account. He can
               then withdraw the rest of the                    8   See http://www.mom.gov.sg/publish/     27 Section 27D of the Act.
               savings in his Ordinary and                          momportal/en/press_room/mom_
               Special Accounts in one lump                         speeches/2007/20070308-committee.      28 Section 27D(1)(iv) of the Act.
               sum. For more information on the                     html, at para. 27.
               Retirement Account, see http://                                                             29 Section 27D(1)(iii) of the Act.
               my c p f . c p f . g ov. s g / M e m b e r s /   9   More information on the HOPE
               home.htm                                             scheme may be found at: http://app.    30 Section 27D(1)(v) of the Act.
                                                                    mcys.gov.sg/web/corp_press_story.
          3    A bankrupt who turns 55 years                        asp?szMod=corp&szSubMod=press          31 See Section 13 of the Housing
               of age can only withdraw his                         &qid=263                                  Regulations; see especially sub-
               CPF savings on a monthly basis.                                                                section (2), and subsection (12)
               The savings in his Ordinary                      10 See   http://www.hdb.gov.sg/bb33/          (definition of ‘relevant amount’).
               and Special Accounts will be                        ispm051p.nsf/Search
               transferred to his Living Expenses                                                          32 Section 27D(1)(ii) of the Act.
               Account and payment will                         11 See Reg. 13 (12) of the CPF (Approved
               continue until the total Living                     Housing     Schemes)      Regulations   33 Section 27F of the Act.
               Expense amount is fully paid to                     (‘Housing Regulations’).
               him. However, if he is discharged                                                           34 This example has been taken from
               from bankruptcy, a lump sum                      12 See Reg. 14A (12) of the Housing           the article by Ms Naina Parwani
               payment of the remaining                            Regulations.                               and Ms Lynne Loh entitled
               balance will be made to him. For                                                               ‘Division of CPF-Related Assets
               more information on the Living                   13 Section 27B(1)(a) of the Act.              in Matrimonial Proceedings’ in
               Expenses Account, see http://                                                                  the December 2007 issue of the
               my c p f . c p f . g ov. s g / M e m b e r s /   14 Section 27B(1)(a)(i) of the Act.           Singapore Law Gazette.
               home.htm
                                                                15 Section 27B(1)(a)(ii) of the Act.       35 Section 27F(1)(i) of the Act.
          4    The client will need to log in
               using her Singpass.                              16 Section 27B(6)(a) of the Act.           36 Section 7 of the Regulations.

          5    Information on the addresses                     17 Section 27B(7) of the Act.              37 Section 27I(2) of the Act.
               and opening hours of the CPF
               Board main office can be found                   18 Section 27B(2) and (3) of the Act.      38 Section 27B(5) of the Act.
               at:   http://mycpf.cpf.gov.sg/cpf/
               Contact-Us/Offices/Offices.html                  19 Section 27B(6)(b) and (7)(b) of the     39 Regulation 5 of the Regulations.
                                                                   Act.
          6    Please note that these questions                                                            40 The author is grateful to Naina
               do not include those concerning                  20 Section 27B(1)(b) of the Act.              Parwani and Lynne Loh, legal
               HDB rules and regulations which                                                                officers with the CPF Board, for
               you should also ask, such as                     21 Section 27B(6)(a) of the Act.              their very helpful comments on
               whether the parties have fulfilled                                                             this article, which were given
               the Minimum Occupation Period                    22 Section 27B(2) of the Act.                 in their personal capacities.
               for the HDB flat (and are thus                                                                 The author is currently a Senior
               entitled to sell it on the open                  23 A foreign spouse is not entitled to        Assistant Director of the Legal
               market), whether the flat will                      have a transfer of the member’s CPF        Aid Bureau. However, the views
               be subject to redevelopment                         monies into her account, under             expressed in this article are
               under the Selective En-bloc                         Section 27B(1) of the Act.                 entirely her own.

      April	2008
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