Rationale to Link Workfare Special Payment to MediSave Contributions

11 Ms Carrie Tan asked the Deputy Prime Minister and Minister for Finance in respect of the Workfare Special Payment (a) what is the rationale behind having up-to-date MediSave contributions as a qualifying criteria for the payment; (b) how many low-wage workers who are otherwise eligible for this payment have been prevented from receiving this due to arrears in their MediSave contributions; (c) how many of those who are not eligible for this payment have contribution arrears amounting to more than $3,000; and (d) whether the Ministry will consider removing such contributions as an eligibility criteria especially in this difficult time when liquidity and cashflow is needed by individuals to survive day to day.

The Second Minister for Finance (Mr Lawrence Wong) (for the Deputy Prime Minister and Minister for Finance): Mr Speaker, the Workfare Special Payment is a one-off Workfare payment to provide additional support for lower wage workers receiving the Workfare Income Supplement for Work Years 2019 or 2020. In other words, to receive Workfare Special Payment, you will need to qualify first for the underlying Workfare Scheme.

The need to contribute CPF in order to qualify for Workfare is not new and this requirement was put in place because the CPF is a key pillar of Singapore’s social security system, which enables all working Singaporeans to save towards their own retirement.

For employees, the CPF contributions are made on a monthly basis by their employers. For Self-Employed Persons or SEPs, they will only need to make MediSave contributions at the end of the Work Year after declaring their incomes and this is the cause of MediSave arrears.

SEPs have until March 2021 to declare their income for 2019 and make their required MediSave contributions, to be assessed for Workfare. As at May 2020, 49,900 SEPs have declared their income for 2019 and are eligible for Workfare. Amongst them, about 44% have made their MediSave contributions, and the rest have until March next year to do so. Letters will be sent to these SEPs to remind them of their MediSave obligations.

There are about 600 Workfare-eligible SEPs who have MediSave contribution arrears of more than $3,000, accumulated over the last two Work Years.

We recognise that this is a difficult period for many Singaporeans. But it is important for SEPs to continue saving for their healthcare needs through MediSave, while they also get support from the Government through Workfare. The CPF Board has helped SEPs who faced difficulties by working out alternative arrangements for them to meet their MediSave obligations. Many lower income SEPs would also have received support under various Government schemes. Those facing difficult circumstances can also visit the MSF Social Service Offices if they need further help.

Mr Speaker: Ms Carrie Tan.

Ms Carrie Tan (Nee Soon): Thank you, Mr Speaker. I would like to thank Minister for his reply. While I understand the importance of CPF and MediSave, and the important role those play in ensuring long-term security for our workers in terms of their retirement and healthcare needs, would the Minister not agree that for individuals already facing cashflow difficulty in the current period, expecting them to make their MediSave arrears first before allowing them to get this payout to meet their immediate needs, is in fact defeating the purpose of the scheme in alleviating immediate financial challenges faced by these individuals? This is in allusion to my maiden speech where I mentioned the good intentions of the Government to 雪中送炭变成雪上加霜.

So, in view of that, will the Minister agree that we can allow these individuals to work out an instalment payment arrangement for their MediSave arrears, while at the same time making them eligible to receive the Workfare Special Payment?

Mr Lawrence Wong: Mr Speaker, I share the concern that Ms Tan has over the difficulties that many SEPs face during this difficult period. I am sure many Members have shared similar concerns and you would have seen residents who have similar difficulties.

I would encourage everyone to look at this particular requirement, not in isolation but to look at the full suite of help measures that the Government has put in place. Yes, there is Workfare Special Payment which is tied to the underlying Workfare requirement. But there are also many other help schemes in the Budget, through ComCare, through SIRS, through GST Voucher, where the help is provided more immediately and are not tied to any CPF contributions.

Secondly, I take the point that the Member had suggested, that we should do more to help SEPs meet their MediSave obligations and pay their arrears through instalments. As I had mentioned earlier, the CPF Board is already doing its part to reach out to them and provide instalment plans to help these SEPs fulfil their MediSave obligations. To the extent that some of these SEPs need more time to fulfil their MediSave obligations and they extend beyond the deadline for the Workfare Special Payment, we will be prepared to consider such appeals – meaning to say, they take time to fulfil their MediSave through instalments, but then they have passed the Workfare Special Payment deadline or the Workfare deadline, we will still be prepared to consider such cases for eligibility for the Workfare Special Payment.

Mr Speaker: Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim (Sengkang): Thank you, Speaker. I am just wondering if the Minister can clarify for us whether in this particular period, there has been an increase in the subsidy payouts on the part of Workfare for citizens, in part because, obviously, due to COVID, some of these services may have actually seen reductions in their demand. So, I am wondering if he could clarify for us.

Mr Lawrence Wong: Mr Speaker, I do not have with me data on the Workfare payout, certainly not the latest periods of Workfare payouts. I will not be surprised if there are more payouts, partly because there may well be people who are in the lower income categories who will benefit from Workfare and, perhaps, more payout has been given during this period. But, certainly, because of the Workfare Special Payment, and if you pool it altogether, the Government is giving more to lower wage workers and we will continue to do so.