Freelancers to get new Medisave model, insurance scheme: Josephine Teo

SINGAPORE — Often they work without insurance, medical leave, and Central Provident Fund (CPF) contributions, but freelancers are set to get more support, announced Second Manpower Minister Josephine Teo in Parliament on Monday (March 5).

This includes being able to deduct a share of their income for Medisave, getting access to voluntary mediation for payment disputes, and an insurance scheme that stems income loss from prolonged sick leave.

Based on the Government’s latest survey, the number of residents self-employed for at least six months last year rose to 223,500, about 10 per cent higher than the year before. Primary freelancers, who depend on self-employment as their livelihood, currently make up 8.4 per cent of Singapore’s resident workforce.

Just last month, a tripartite workgroup looking into the concerns of freelancers released its recommendations on how to better support such workers. These have since been accepted by the Government as it looks to roll out the ideas from the workgroup, which was formed last March.

The Government is studying a “contribute-as-you earn” Medisave model, as Mrs Teo said that it is easier to make smaller but more frequent contributions to Medisave. At present, freelancers are required to contribute to their Medisave accounts annually, but about one in four workers has not kept up, she said. A key challenge for them is being able to put aside enough cash regularly. This puts them at risk of not being able to pay for out-of-pocket healthcare expenses when they grow older.

The suggested model will allow for a service buyer or intermediary to make a Medisave contribution each time a freelancer earns a service fee, just as how a full-time employee contributes to CPF from his or her monthly pay.

However, Mrs Teo noted that the Government will have to iron out issues, such as the right amount of Medisave contributions to deduct in each transaction.

As a service buyer, the Government will take the lead in putting a model in place. Government procurement entities will aim to test it by 2020 so that it can be rolled out to the private sector later.

All freelancers can now approach the Tripartite Alliance for Dispute Management (TADM) to mediate in payment disputes.

Such workers can have their disputes heard at the Small Claims Tribunals, but the Ministry of Manpower (MOM) said some are concerned that taking their buyers to court will hurt their work opportunities, particularly if their industry is small.

TADM’s service requires a registration fee of up to S$60, and it is open to citizens and permanent residents who run their own business with no employee. It will only mediate disputes between individuals and a registered Singapore business.

Those who work in industries that have government agencies overseeing their sectors — such as the Land Transport Authority which helps mediate between taxi companies and drivers — are encouraged to continue approaching them for such services.

The tripartite partners — the Government, unions and employers — on Monday also launched a tripartite standard on contracting with self-employed persons, setting out a benchmark that freelancers should encourage the buyers of their services to adopt.

Under the standard, buyers need to discuss and agree clearly with freelancers on areas such as the nature of services, which includes duration and location of service, and payment schedules. These will be laid out in writing.

Calling the standard a “good start” to clarify the work arrangements between businesses and freelancers, Mrs Teo said it will shape contracting norms and entrench best practices over time.

To better protect freelancers from income loss due to protracted sick leave, insurer NTUC Income is looking into developing an insurance scheme for such situations and it is set to be rolled out next year. Mrs Teo said higher-risk occupations, such as taxi and private-hire car drivers, and sports coaches contracted by the Education Ministry, should be encouraged to adopt this scheme.

As there is currently no such insurance scheme for freelancers, some have called for service buyers to provide their freelancers with such protection. However, Mrs Teo said that these workers are engaged by multiple buyers, making it impossible to determine the level of coverage each buyer should provide.

“We will therefore take a practical approach of making the insurance product available for (freelancers) to purchase for their own protection,” said the minister. Besides NTUC Income, Mrs Teo said other insurance firms can also offer the service.

Mr Pui Phusangmook, NTUC Income’s general manager for general insurance and group business, said the company is looking to plug the gap for the “underserved” community of freelancers who, unlike full-time employees, are not protected against income loss when illness or injury forces them to stop work. “We believe such a product can provide much-needed assurance and peace of mind,” he said.

On Monday, Nominated Member of Parliament for the arts Kok Heng Leun suggested that dancers and stage technicians be covered by such insurance, too, as many of them are susceptible to injury in their line of work.

Mrs Teo said the Government is keen to get in touch with the associations that these groups belong to so as to explore promoting prolonged medical leave insurance as a norm for their occupations.

The tripartite partners will also work with associations looking after the interests of freelancers to develop competency frameworks for these workers, said Mrs Teo. Already, 15 of the 23 priority industries — such as hotel and accommodation services, information and communications technology — have launched skills frameworks to help transform these sectors such as providing information on career paths and the skills needed to take on various roles.

The labour movement’s Freelancers and Self-employed Unit is also working with groups such as sports coaches to develop a training and accreditation scheme. “Associations can strengthen support to help their members make their ... careers more sustainable,” said Mrs Teo.