FOREIGN DOMESTIC WORKERS LEVY COLLECTION

FOREIGN DOMESTIC WORKERS LEVY COLLECTION

**

(Use for group medical insurance scheme): **

16.

Mr Viswa Sadasivan asked the Minister for Manpower (a) what is the total foreign domestic workers (FDWs) levy collection to-date for 2009; (b) whether the Government will consider using part of the levy for a group medical insurance scheme for FDWs with top-ups from employers to reduce the employers' financial burden; and (c) whether the Government has assessed the impact of the increased minimum medical insurance coverage for FDWs on other national priorities such as encouraging procreation and making it easier for children to care for the ageing parents.

Mr Gan Kim Yong: Employers have all along been responsible for the upkeep and maintenance of their foreign workers, including their medical treatment. When healthcare subsidies for foreigners were removed from 1st January 2008, we mandated employers to purchase and maintain medical insurance for S-pass holders, work permit holders, and foreign domestic workers. This was to help employers mitigate and manage their exposure to the cost of medical care for their foreign workers and foreign domestic workers.

The total foreign domestic worker levy collected for 2009 was $451 million. The purpose of the foreign worker levy is to regulate the demand for foreign manpower. As with other taxes and levies collected, revenue arising from the foreign worker levy is channelled to the Consolidated Fund and forms part of the Government’s revenue to finance Government expenditure in general. It would not be appropriate to use government revenue to pay for the medical costs of foreign domestic workers incurred by the employers. The Government does not earmark specific levies for specific expenditure purposes.

The impact of the increased minimum medical insurance coverage for foreign domestic workers on other national priorities, such as encouraging procreation and making it easier for children to care for ageing parents, should be minimal as employers are already responsible for the cost of their foreign domestic worker. In fact, the minimum medical insurance coverage for foreign domestic workers helps to provide peace of mind for employers of foreign domestic workers, as their exposure to potential large hospital bills are reduced. As some cases of medical bills have far exceeded the minimum coverage of $5,000 set initially, MOM announced in September 2009 that the Government will increase the minimum insurance coverage to $15,000 a year with effect from 1st January 2010. However, employers may choose to obtain higher coverage on their own accord if they wish to have greater protection.