Budget 2023: Platform workers aged under 30 to come under CPF scheme, with 'transitional support' for those on lower wages

SINGAPORE — Platform workers, such as food delivery riders, aged under 30 will soon come under the Central Provident Fund (CPF) scheme following recommendations of a committee last year designed to boost the financial security of these "gig" workers.

These workers will make CPF contributions along with contributions from their employers, but those on lower incomes will get transitional support in the first four years, Deputy Prime Minister Lawrence Wong said on Tuesday (Feb 14).

In his Budget speech on Tuesday (Feb 14), Mr Wong, who is also Finance Minister, outlined this and various changes to the CPF scheme to provide better retirement support to Singaporeans.

Mr Wong's announcement on platform workers' CPF contributions comes after proposals by the advisory committee on platform workers were accepted by the Government last year.

One of the recommendations was to align the CPF contribution rates of platform workers and companies with those of employees and employers over a period of five years. 

Mr Wong said that while these changes will help these workers strengthen their housing and retirement adequacy, in the short term this will affect their take-home pay. 

Consultations with more than 20,000 gig workers last year found that opinions were divided on whether there should be mandatory CPF contributions, with half of them wanting this change and the other half mainly concerned about the impact on their take-home earnings. 

"I will therefore introduce additional support to help lower-income platform workers cushion this impact," said Mr Wong. 

For the first four years after implementation, platform workers earning S$2,500 per month or less who are newly contributing to their CPF will have "CPF transition support", with more details to be announced at the Ministry of Manpower's Committee of Supply debate this year. 

OTHER CPF ADJUSTMENTS

Mr Wong announced that CPF adjustments will also be made for older workers.

In line with the recommendations of the Tripartite Workgroup on Older Workers, the Government implemented the first increase in CPF contribution rates for senior workers last year, and a second increase earlier this year, where a CPF transition offset was provided to employers to alleviate the increase in business costs. 

The next increase in CPF contribution rates will come in 2024, with similar offsets for employers. 

There will also be an increase in the minimum CPF monthly payout for seniors on the Retirement Sum Scheme to S$350 per month.

For middle income Singaporeans, their CPF monthly salary ceiling will be raised to help them save more for retirement, said Mr Wong. Last raised in 2016 to S$6,000, the monthly salary ceiling will be raised progressively later this year to S$8,000 in 2026, to keep up with rising salaries. 

The CPF annual salary ceiling, however, will remain unchanged at S$102,000 a year. 

The CPF annual salary ceiling sets the maximum amount of CPF contributions that may be paid for all wages a worker received in the year, including additional income such as bonuses.

The Government intends that the CPF monthly salary ceiling, which sets a cap on the amount of ordinary wage that attracts contributions, will eventually be set at one-twelfth of the annual salary ceiling.

"We will phase the increases over four years, starting from this year, to allow employers and employees to adjust to the changes," said Mr Wong.