Budget 2019: Government boosts support for lower-wage, older workers
Lower-wage workers will receive higher payouts under a government scheme to help them supplement their income and Central Provident Fund (CPF) savings.
The qualifying income cap for the Workfare Income Supplement (WIS) programme will also be raised from $2,000 to $2,300 a month, Finance Minister Heng Swee Keat said yesterday.
With the enhanced WIS, to take effect from January next year, the maximum annual payouts will be increased by up to $400, and older workers will see higher increases in payouts.
Those eligible for WIS receive payout amounts based on their age and income.
For example, 60-year-old workers earning $1,200 a month can currently receive $3,600 annually from WIS, but with the enhancement, this will be boosted to $4,000.
They will continue to receive 40 per cent of WIS in cash and 60 per cent in their CPF.
The WIS supports workers whose earnings are in the bottom 20 per cent, as well as those slightly above.
Mr Heng said: "The scheme has raised their incomes, encouraged employment and helped them save more for retirement."
He said the enhanced WIS is expected to cost close to $1 billion a year and will benefit almost 440,000 Singaporeans.
Meanwhile, to support older workers, the Special Employment Credit (SEC) and the Additional SEC scheme, which incentivise and encourage employers to hire senior workers, will both be extended for another year, until Dec 31 next year.
The SEC subsidises the wages of Singaporean workers aged 55 and above who earn up to $4,000 a month. The Additional SEC encourages companies to hire workers who are above the re-employment age of 67.
To support the extensions, the SEC fund will be topped up by $366 million, Mr Heng noted.
He said a tripartite workgroup set up to study the concerns of older workers will present its recommendations later this year.
The Government will also review the relevance and structure of the SEC and Additional SEC, in tandem with recommendations from the workgroup.
"With a tighter labour market, and more Singaporeans choosing to work longer, more companies will be hiring older workers. The Government will study better forms of support to continue to help workers to remain productive, earn more and save more for retirement," he said.
Mr Heng also announced a $1.1 billion Bicentennial Bonus for Singaporeans. As part of it, lower-income Singaporeans will receive additional payments from the WIS scheme at the end of this year, to help them with daily living expenses.
The Workfare Bicentennial Bonus will give these people another 10 per cent of their WIS payment for work done last year, with a minimum payment of $100. This will be given in cash.
Companies will also have to rely less on foreign workers and become more productive.
The Dependency Ratio Ceiling - the proportion of foreigners on work permits or S Passes a company can employ - will be cut from 40 per cent to 38 per cent on Jan 1 next year and to 35 per cent on Jan 1, 2021.
The quota for S Pass workers - mid-skilled foreigners paid at least $2,300 a month - will drop from 15 per cent to 13 per cent on Jan 1 next year and to 10 per cent on Jan 1, 2021.
Companies that already exceed the new levels will have to meet the quotas when applying for permit renewals.
Mr Heng said the decision to reduce the quota was done "after much deliberation".
Higher funding of up to 70 per cent under two grants will be extended to March 31, 2023, to help companies adjust to the changes.
These are the Enterprise Development Grant (EDG), which funds projects for companies to improve efficiency and internationalise, and the Productivity Solutions Grant (PSG) that subsidises the cost of off-the-shelf technology to help companies boost productivity.
The funding cap of 70 per cent was due to drop to 50 per cent after March 31 next year for the EDG and for certain sectors under the PSG.
The Manpower Ministry provides some flexibility for companies to employ more foreign workers while they move to an operating model needing fewer employees under the Lean Enterprise Development Scheme.
Meanwhile, there will be no changes to the foreign worker levy rates this year.