Findings from Trial of Giving Unconditional Cash Aid to Lower-income Families

22 Mr Melvin Yong Yik Chye asked the Minister for Social and Family Development (a) whether the Ministry will examine if the findings by AWWA that unconditional cash aid can help lower-income families have better job outcomes and mental health can be applied to national social assistance programmes; and (b) whether the Ministry will support more of such trials at selected constituencies so as to examine the effectiveness of unconditional cash aid.

Mr Masagos Zulkifli B M M: My reply will also address questions filed by Mr Yip Hon Weng, Mr Ong Hua Han¹ and Assoc Prof Razwana Begum Abdul Rahim together. If Members’ questions are adequately addressed today, they may wish to withdraw their questions for the Sitting on 7 August 2024.

The Ministry of Social and Family Development appreciates the effort and initiative by Asian Women’s Welfare Association (AWWA) to test different approaches to uplift lower-income families. Their pilot and findings will give us a better understanding of how we can continue to improve our social interventions.

The term “unconditional cash transfers” was used in this pilot initiative. Some had the impression that it was a Universal Basic Income pilot, where every individual receives a cash transfer regardless of their circumstances. But this was not the case. AWWA only provided cash transfers to clients whose per capita household income was less than $1,000 a month and whose total household income was not more than $3,600 a month.

Furthermore, the transfers were not given purely on an “unconditional” basis. AWWA has clarified that the beneficiaries were, in fact, asked to meet with their case officers regularly, who would continue to actively help them with the challenges they faced.

AWWA’s pilot found that respondents felt that the cash transfers helped to improve financial well-being and reduce mental stress, at least in the short term. We were also interested in finding out if the study achieved longer-term effects that could be easily and objectively measured, such as time spent in employment, income security or hours worked. But AWWA’s findings in these areas were inconclusive.

On whether the Government will consider replicating or scaling up AWWA’s pilot, there are no plans to do so. There was no clear evidence from the study that the cash transfers led to longer-term positive effects. Another recent study done in the United States also found that providing unconditional cash transfers led to decreased work hours, with the saved time spent on leisure, rather than capacity-building, such as upskilling or searching for better jobs. Positive effects on well-being and mental health also petered out after the first year.

We are instead focusing on strengthening our safety nets and providing support in other ways.

The Government currently provides financial assistance to lower-income individuals and families through ComCare, to help them meet their basic living needs. We review the quantum of support provided under ComCare regularly and will continue to do so.

We are also providing additional support to lower-income families with children through ComLink+. Under ComLink+, dedicated family coaches work with families to assess their needs, co-develop action plans, and coach and motivate families as they work towards stability, self-reliance and social mobility.

ComLink+ families who take active steps to secure a better future for themselves and their children will also receive further help in the form of ComLink+ Progress Packages. These are cash transfers that go beyond what is needed for basic living needs and will be disbursed when families take steps to improve their circumstances and prospects in specific domains, in line with the action plans that they themselves would have co-developed with their family coaches. We will work with local academics to evaluate the effectiveness of the ComLink+ Progress Packages in a rigorous manner.

Assoc Prof Razwana Begum asked what programmes or resources are available to help families identify and respond to early signs of financial distress. This is where our ComLink+ family coaches come in to help families better navigate social support services and help to coordinate support across multiple programmes where needed. Families requiring specialised support for debt relief, financial management and long-term employment will be referred to community and Government agencies that provide such support.

Our system of social support will continue to evolve as new evidence presents itself. Where such evidence is robust, we will take these into account as we refine our national programmes like ComCare and ComLink+.