SINGAPORE - A total of $6.1 billion will be set aside under the Merdeka Generation Package, the bulk of which will go towards easing the burden of healthcare costs for nearly 500,000 Singaporeans.

Announcing details of the much talked-about package during his Budget Statement on Monday (Feb 18), Finance Minister Heng Swee Keat called it a "gesture of our nation's gratitude" for those in that generation who were born between Jan 1, 1950 and Dec 31, 1959.

"It will provide them better peace of mind over future healthcare costs, while helping them to stay active and healthy," he said.

Starting this year, those in the Merdeka Generation will receive a $200 Medisave top-up every year until 2023. They will also get higher subsidies under the Community Health Assist Scheme (Chas) and an extra 25 per cent discount on their bills at polyclinics and specialist outpatient clinics.

They will also get between 5 and 10 per cent off their MediShield Life premiums, as well as an extra "participation incentive" of $1,500 if they choose to join the national disability insurance scheme CareShield Life.

And to support their active lifestyles, the Government will give this group a one-off $100 top-up to their PAssion Silver cards. This money can be used to pay for public transport, entry to public swimming pools and activities at community clubs, among other things.

Mr Heng estimated that the package will cost more than $8 billion, in current dollars, over the Merdeka Generation's lifetimes. The $6.1 billion set aside during this year's Budget will, with interest accumulated over time, cover the package's full projected costs, he said.

The oldest people in the Merdeka Generation are now 69 years old, and will be able to enjoy the benefits for "many more years", Mr Heng said.

He added that the Finance and Health ministries have taken this into account when sizing the Budget for these benefits.

"This is a significant commitment by the Government," he said. "It is important that the Government of the day continues to monitor the patterns and cost of healthcare utilisation, and life expectancy over the next 30 years or more, so that the Government is able to meet this commitment," he said.

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The Merdeka Generation Package comes five years after $8 billion was set aside during Budget 2014 for the Pioneer Generation Package.

Chas subsidies under the new package will be higher than subsidies for lower-income blue Chas card holders. All in the Merdeka Generation will be able to get these subsidies regardless of income, even if they don't have a Chas card today.

They will also receive an extra 5 per cent off their annual MediShield Life premiums, which will go up to 10 per cent after they turn 75. This is on top of the existing means-tested subsidies that lower and middle-income Singaporeans get.

The Health Ministry had previously announced participation incentives of $2,500 for people born before 1960 if they joined the CareShield Life insurance scheme. The new $1,500 incentive for those in the Merdeka Generation means that they will get a total of $4,000 each if they join.

The money will cover a significant portion of premiums, and is on top of the regular means-tested premium subsidies, Mr Heng said.

Singaporeans aged 50 and above this year, and who are not eligible for either the Merdeka or Pioneer Generation packages, will also get an extra Medisave top-up of $100 a year for the next five years. This is to help them with their future healthcare expenses, Mr Heng said.

Those who were born in the 1950s and who obtained citizenship by 1996 will be eligible for the Merdeka Generation Package. Those born in 1949 and earlier will also get the package if they missed out on the Pioneer Generation Package, as long as they got citizenship by 1996.

People who are eligible will be notified by April and start getting their Merdeka Generation cards from June. More details will be shared during the debate on the Health Ministry's spending plans.

Read Mr Heng's full speech.