WORKFARE INCOME SUPPLEMENT

WORKFARE INCOME SUPPLEMENT

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20.

Mr Christopher de Souza:

Mr Christopher de Souza asked the Minister for Manpower (a) how many Singaporeans have benefited from the Workfare Income Supplement (WIS) since its introduction in 2007; (b) what is the amount of WIS which has been paid so far; (c) of those not paying CPF previously, how many have contributed to their CPF in order to benefit from WIS; and (d) what is the estimated number of workers who have not yet benefited from WIS due to non-contribution to CPF.

Mr Christopher de Souza asked the Minister for Manpower if he will reconsider allowing workers whose basic pay is less than $1,500 but whose total pay exceeds $1,500 (due to overtime) to be eligible for Workfare Income Supplement (WIS).

Mr Gan Kim Yong: The Workfare Income Supplement (WIS) Scheme was introduced in 2007 to encourage older low-wage workers to work and improve their retirement adequacy. For work done in 2007, 311,000 low-wage workers benefited from Workfare totalling $305 million. This works out to an average of $982 per worker. For work done in 2008, so far 328,000 low-wage workers have received Workfare benefits totalling $386 million, including $55 million in the Workfare Special Payment announced as part of this year’s Resilience Package. This works out to an average of $1,176 per worker.

To ensure employers contribute CPF for their workers, the CPF Board has been stepping up its enforcement efforts against errant employers. For example, the CPF Board has identified certain industries as being more prone to non-contribution, and has proactively conducted audit inspections. Between January 2007 and January 2009, these audits have led to more than 57,000 informal workers being converted to formal employment, enabling them to receive CPF contributions regularly. About 10,000 of these employees meet the conditions for Workfare, and have since received Workfare benefits.

It is difficult to estimate the number of informal workers who have not received Workfare due to non-contribution of CPF due to the informal nature of their work. However, the CPF Board’s data show that in addition to the 310,000 recipients for work done in 2007, there are about 24,000 self-employed persons and informal workers who have registered with the CPF Board, but have not fulfilled their Medisave liabilities to receive Workfare.

On the Member’s suggestion to exclude overtime pay in assessing the eligibility for Workfare, whether a worker’s pay is in the form of basic salary, overtime pay or bonus, they are all income that helps to support the worker and his family. Given that the aim of Workfare is to help low-wage workers by supplementing their incomes, it is fair to consider all forms of income earned by the worker.

The Workfare scheme has also been designed such that the combined Workfare payment and income is always higher, the more the worker earns. For example, a 65 year-old worker who earns $1,000 a month will have a total average income of $1,200 per month after adding Workfare. If he earns $200 a month in overtime, his Workfare will fall to $120 per month, but his total monthly income still goes up to $1,320. If he has overtime of $600, he will not get any Workfare, but his income of $1,600 will still be higher than earning $1,200 with overtime and Workfare, and $1,000 with no overtime but with Workfare.