BUDGET 2016 - Shaping our future together: Supporting our workers

Correspondent's take: Earning more, relying less on Workfare

The Workfare scheme will be given a boost from next year.

The monthly income ceiling to be eligible under the scheme will be raised from $1,900 to $2,000 next January. Workers will get between $100 and $500 more a year, and payments will be made monthly, not quarterly.

Workfare was introduced in 2007 to boost monthly incomes of low-wage workers through a wage supplement for those who earned below a certain salary.

On the surface, the $100 rise in income ceiling is low. Previous hikes were of $200 each time: from $1,500 to $1,700 in 2010, and to $1,900 in 2013.

Also, fewer workers will benefit from the supplements despite the higher ceiling. About 460,000 Singaporeans will be under the $2,000 ceiling from next year.

In absolute numbers, this is lower than in 2013, when the ceiling moved to $1,900 and about 480,000 Singaporeans came under Workfare.

Low-wage workers are earning more and relying less on Workfare. This is an encouraging sign.

While having Workfare is good, what is more important is for the scheme to complement other government policies that raise the salaries of low-wage workers permanently.

Still, there is no need to worry about fewer citizens being on Workfare. The Workfare ceiling is pegged to the 30th percentile of the citizen workforce, with the bottom fifth getting the most help.

The Manpower Ministry does not publish the income data of the 30th percentile. But for citizen workers at the 20th percentile, one notch lower, their monthly income from work - excluding employers' Central Provident Fund contributions - has risen from $1,500 in 2012 to $1,733 last year.

The higher salaries are due to policies that kept the labour market tight, put a lid on cheap foreign workers, and introduced compulsory wage ladders in the cleaning, security and landscape sectors that employ large numbers of low-wage workers.

In short, low-wage workers are earning more and relying less on Workfare. This is an encouraging sign.

While having Workfare is good, what is more important is for the scheme to complement other government policies that raise the salaries of low-wage workers permanently.


Correction note: An earlier version of this story had the wrong information on what workers will get. This has been corrected.

A version of this article appeared in the print edition of The Straits Times on March 25, 2016, with the headline 'Earning more, relying less on Workfare'. Print Edition | Subscribe