CPF SCHEME FOR SELF-EMPLOYED

Mr Chng Hee Kok asked the Acting Minister for Labour whether plans have been finalized to include the self-employed in the Central Provident Fund Scheme.

The Acting Minister for Labour (Mr Lee Yock Suan): Mr Speaker, Sir, my Ministry is still working on the plan to extend the CPF scheme to include the self-employed. The CPF has so far been developed as a social security savings scheme for employed persons. Although the social needs for housing, health care and retirement of the self-employed are no different from those of the employee, their situation differs. In the first place, the self-employed has no employer to contribute CPF savings on his behalf. It will therefore be difficult for him to save at the same rate as the employed person assisted by his employer. Secondly, CPF contributions by employees are made through 70,000 employers whereas collection from the self-employed will have to be done directly. There are at present about 300,000 self-employed persons in a wide spectrum of occupations and professions earning a wide range of income. Their income also fluctuates from month to month. Ways will have to be found to facilitate the payment.

In view of these differences, the present CPF system cannot be applied in toto but must be adapted for the self-employed. My Ministry is carefully examining various approaches before we proceed with our plan to include the self-employed in the CPF scheme.

Mr Chng Hee Kok: Sir, are there any self-employed who are paying CPF at this point of time? If so, how many are there?

Mr Lee Yock Suan: About 200,000 self-employed persons are already CPF members. Of this number, 72,000 are active members. This means that they have been paying CPF recently. The figure of 300,000 is actually an over-estimate in the sense that some of the self-employed actually are employees. They may be doing some other job on a part-time basis. For example, quite a few working persons may have taxi licences. They may drive at night or they may be holding their licence as an insurance against unemployment. So we are narrowing down the figures further.