CPF CONTRIBUTION (Reduction)

CPF CONTRIBUTION

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(Reduction): **

14.

Mdm Cynthia Phua asked the Minister for Manpower based on the economic situation, whether his Ministry will consider reducing the 20% Central Provident Fund (CPF) contribution for income earners of $1,500 and below so as to allow them to have a higher take-home pay.

Dr Ng Eng Hen: Although reducing the CPF contribution rate of these workers may enable them to receive higher take-home pay, it will reduce the amount of savings they need for their medical, housing and retirement needs. Workers may end up worse off as a result. Workers have also expressed fear that if CPF contribution rates are lowered, some employers might make use of this opportunity to reduce their overall salaries.

In view of these disadvantages to workers from lowering the CPF contribution rates, the Ministerial Committee for Low Wage Workers is considering other proposals to increase take-home pay. We will continue to consult with other stakeholders and will release more details when deliberations are completed.

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