Workfare review underway to ensure low-wage workers continue to get support

SINGAPORE — The Workfare Income Supplement (WIS) will be improved to ensure that more than one-fifth of Singaporean employees continue to receive top-ups to their low wages, even as their salaries improve, said Minister of State for Manpower Zaqy Mohamad on Friday (July 6).

Announcing a review of the scheme via a Facebook post, Mr Zaqy noted that the salaries of low-wage workers here have risen faster than inflation. Growth of wages at the lower end also exceeded the growth in resident median income over the past five years, he said.

Some 42,000 former WIS recipients saw their incomes rise above the income eligibility criteria — which currently stands at S$2,000 gross monthly income — in 2016 and 2017, which shrank the pool of recipients from 389,000 in 2015 to 366,000 in 2017.

Mr Zaqy wrote: “In other words, they ‘graduated’ out of WIS because they are now earning more. This is not a bad development at all.

“Our aim remains the same. WIS will to continue to be a key pillar of support for our low-wage workers,” added Mr Zaqy, who is leading the review. It will be completed next year.

WIS supplements the income and retirement savings of eligible workers through cash payments and Central Provident Fund contributions.

Apart from meeting the income criteria — which was last raised from S$1,900 to S$2,000 last January — WIS recipients must be Singapore citizens aged 35 and above. However, all persons with disabilities qualify for the supplement.

Economists and parliamentarians from the Labour Movement contacted by TODAY said the current practice of assessing eligibility using an absolute income threshold may not accurately capture the segment of low-wage workers who need financial support.

National Trades Union Congress (NTUC) Assistant Secretary-General Zainal Sapari and CIMB Private Bank economist Song Seng Wun were in favour of using a percentile, rather than an absolute value, as the threshold to determine the number of workers eligible for WIS.

Mr Song said: “Just as an example, today it may may cost S$5 a day to live in Singapore. Tomorrow it may cost S$7 a day…You want the whole income group to rise together with overall economic development.”

Mr Zainal, who is also Member of Parliament (MP) for Pasir Ris-Punggol Group Representation Constituency (GRC), also suggested that the authorities refer to sectors that typically have a large proportion of low-wage workers, such as security, cleaning and landscaping, in determining a representative income benchmark.

Mr Zainal and NTUC Assistant Secretary-General Desmond Choo also raised concern that some low-wage workers may be denied the supplement because they clock more overtime hours, which would push their gross salaries above the current income criteria.

“This appears to be counter-intuitive and works against employees in the security industry, who tend to pull long hours,” said Mr Choo, who is also an MP for Tampines GRC.

“We want people to work hard, but not penalise them as a result of working hard.”

Basic income could be assessed separately from overtime pay, they suggested.

Mr Choo also felt that the age criteria — currently set at 35 years old and above — could be made more flexible. Some Singaporeans, like single mothers working part-time to care for their children, may benefit from financial support but cannot qualify for WIS because of their age.

Payment quantums should also be raised in step with inflation, said observers. “The payouts should take into account inflation, so as to help to ensure that at least the real incomes of the workers are maintained,” said Mr Zainal.