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Written Answer by Mr Tan Chuan-Jin, Acting Minister for Manpower, to Parliamentary Question on CPF Savings of Self-employed Persons

Notice Paper No. 401 of 2013 For The Sitting On 21 October 2013
Question No. 646 And 647 For Written Answer

MP: Mr Ang Hin Kee

To ask the Acting Minister for Manpower (a) whether the Ministry has assessed if the CPF savings of taxi drivers under the Drive and Save Scheme have improved and reached an adequate level; and (b) whether the Ministry will consider implementing a dollar-for-dollar matching CPF contribution for taxi drivers under the Drive and Save Scheme to enhance their Medisave savings and ability to pay premiums under the new Medishield Life.

To ask the Acting Minister for Manpower (a) whether the Ministry has assessed if the CPF savings of self-employed individuals such as tour guides, tuition teachers and freelance trainers are adequate; and (b) whether the Ministry will consider replicating the Drive and Save Scheme adopted by taxi drivers to other self-employed individuals to help them save more in their CPF.


  1. Self-employed persons (SEPs) are required to contribute to their Medisave Accounts to save for their healthcare needs. The median Medisave balance of SEPs who are not concurrently employees has been increasing steadily at an average annual rate of 10% over the past 5 years, from $12,000 in 2008 to $18,000 in 2012.
  2. In 2012, 84% of the SEPs made their Medisave contributions or are on instalment plans for their Medisave contributions. To encourage more SEPs to make timely and regular Medisave contributions, the CPF Board reaches out to SEPs via annual mailers and road shows, and facilitates arrangement for those who wish to make their Medisave contributions via instalments. The CPF Board has also partnered several Licensing Authorities (LAs), to ensure that their licensees contribute to Medisave.
  3. The industry associations or companies can also play an important role in encouraging their SEPs to contribute to their Medisave. Under the Drive-and-Save Scheme initiated by the National Taxi Association and implemented in 2011, taxi drivers who contribute at least $15 a month to their Medisave Accounts will receive a Medisave co-contribution of $15 a month from their taxi companies. Between 2011 and 2012, about 17,000 taxi drivers have benefited from $5.9 million of co-contributions from the taxi companies. The taxi drivers themselves have also been contributing more. The average annual Medisave contributions made by the taxi drivers who are participants of the scheme in 2012 is $940. This is a significant improvement from their average annual Medisave contributions of $660 in 2010, before the scheme was introduced.
  4. There are other examples of industry-led initiatives. The Woodlands Transport Services launched a similar Serve-and-Save Scheme last year. In the insurance industry, AIA, with its Earn-and-Save Scheme, credits a portion of the agents’ commissions into their Medisave Accounts. We encourage more industry associations and companies to take on an active role in enhancing the welfare of their SEPs.
  5. Nonetheless, it remains important for SEPs to see it as their personal responsibility to save for their healthcare needs via Medisave. The Government provides support through measures such as the Workfare Income Supplement (WIS) and Medisave top-ups. The maximum WIS payouts for low-income SEPs were recently raised in 2013, by 25% to 50% depending on age group. 90% of the WIS is paid directly into the SEPs’ Medisave Accounts. The higher WIS quantum, together with the announced increase in Medisave contribution rates for low-income SEPs from 2014, will further boost SEPs’ Medisave savings. I would also like to assure members that the Government will take steps to ensure the affordability of MediShield Life premiums for lower-income Singaporeans.