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Oral Answer by Mr Zaqy Mohamad Minister of State for Manpower to Parliamentary Question on Workfare Income Supplement

Employment practices

NOTICE PAPER NO. 1475 OF 2018 FOR SITTING ON 14 JANUARY 2019

QUESTION NO. 2478 FOR ORAL ANSWER

MP: Mr Murali Pillai

To ask the Minister for Manpower given the increase in income for the 20th and 30th percentiles of income earners since 2016 (a) when was the qualifying income ceiling for the Workfare Income Supplement (WIS) last revised using these parameters as benchmarks; and (b) whether the Ministry will consider raising the WIS income ceiling as well as increasing the WIS payouts from the next financial year to assist low-income workers deal with rising costs of living.

NOTICE PAPER NO. 1488 OF 2019 FOR SITTING ON 14 JANUARY 2019

QUESTION NO. 2506 FOR ORAL ANSWER

MP: Ms Rahayu Mahzam

To ask the Minister for Manpower (a) what is the progress of the review on the Workfare Income Supplement (WIS) Scheme; (b) whether there are studies being commissioned to find out what is considered a "living wage"; and (c) whether there are studies to consider extending coverage to those who are not in formal employment.

Answer

  1. The Workfare Income Supplement (WIS) Scheme was launched in 2007 as a broad-based measure that raises incomes of lower-income workers. WIS payouts are targeted at those with limited household support, with more going to older workers. For example, a 65-year old earning $1,200 monthly would receive $300 more each month through WIS. In 2017, 407,000 workers received WIS payouts amounting to $650 million.
  2. WIS is regularly reviewed to ensure the target groups continue to be helped. Since inception, the qualifying income ceiling has been raised three times, with the most recent revision being effected on 1 January 2017. The Ministry of Manpower (MOM) is conducting its regular review of the WIS Scheme to ensure that it continues to provide meaningful support to lower-income workers. We will take into account the increases in income over the past few years and announce the results of the review when ready.
  3. Most WIS recipients also receive other forms of government support to help meet their living needs. Nearly all receive U-Save rebates and over 90% receive GST Vouchers. Nearly four in 10 also receive outpatient medical subsidies under the Community Health Assist Scheme (CHAS). Overall, a 65-year-old worker earning $1,200 a month would receive government transfers comprising Workfare, Silver Support and GST Vouchers amounting to nearly six months’ salary, or $7,000 annually. Those with children receive other forms of support if eligible, such as subsidies for childcare and student care.
  4. This approach of going beyond wage supplements, to provide further support based on the varied needs of individuals and families, is more responsive than any single “living wage”. Beyond transfers, we also support skills upgrading. With better skills, our workers can access better wages and better jobs. Government-funded programmes such as the Workfare Training Support, Adapt and Grow initiative and SkillsFuture provide active support to promote jobs and skills upgrading in all sectors of the economy, so that lower-income workers can progress along with the rest of the workforce.
  5. As a result of these efforts, real wage at the 20th percentile grew faster than at the median. Between 2012 and 2017, incomes (before Government transfers) at the 20th percentile of workers grew at 4.2% per annum, faster than median income growth of 3.4% in real terms. Like other Singaporeans, our lower-income also have the opportunity to build up assets. Among WIS recipients, 75% own their homes.
  6. We recognise that there are workers not in formal employment. Although their incidence in Singapore is generally low, we are concerned about the risks informal workers face. For example, they will have little recourse if their employers failed to make timely payments or compensation for work injury, or if their services were unfairly terminated. The lack of stability also does not enable planning on the part of the individual, and impedes his ability to build up his CPF savings for home ownership, healthcare and retirement. We should hence avoid unwittingly blurring the difference of such work arrangements for workers, or creating an avenue for employers to have reduced or no obligations for these workers with weak bargaining power. This is also why our focus is to help individuals access formal work arrangements.
  7. Through Workforce Singapore (WSG), we seek to bring informal workers back into formal employment. Those in need of financial assistance can also approach the Social Service Offices (SSOs). SSO officers assess the needs of each family holistically, and work together with WSG and NTUC’s Employment and Employability Institute to facilitate employment assistance where needed. In the meantime, informal workers continue to be eligible for other support such as U-Save rebates, GST Vouchers and CHAS.