Pay rises not always cause for celebration

It is heartening to read that household incomes are up, with the bottom 10 per cent of households seeing the biggest jump of 10.7 per cent ("Household income up, with biggest rise for poorer families"; last Saturday).

The wage increase is good for families in the lowest percentile for combined household incomes.

But it may also inadvertently move some of them out of the aid schemes they currently enjoy.

For instance, I have patients with chronic conditions who were previously on the Community Health Assist Scheme (CHAS).

Because of pay increase, higher performance bonus or over-time pay, their CHAS cards were not renewed. However, the little increase in pay does not compensate for the amount lost from the subsidies.

Many of their bonuses were also one-off payments which are not likely to be repeated.

Some families have more than one elderly or disabled member or children with special needs, who require a lot more assistance than the pay increment can cover.

Similarly challenging are those who are single, or single-parent households and the elderly living alone with meagre incomes.

Often, the otherwise welcome pay increase may add more woes and misery instead.

One suggestion is to have a regular review of the criteria for entry into these subsidy schemes.

For example, for CHAS, it would be good to review the scheme every two years, since the card is renewable every two years.

Alternatively, the scheme can automatically adjust its entry criteria every year when data such as inflation is announced. A factor relative to inflation rates and wage rise may then be added in.

This will make administering the scheme easier. It will also relieve the poor of the worry of whether they still qualify for their subsidies.

Families with members who are disabled and have special needs should come under a new scheme.

The amount of money spent on looking after their loved ones can be very expensive and can deplete their income and savings.

However, many of these families earn amounts higher than the criteria for subsidies.

I know of families who decided to change from being a double-income family to a single-income one just to qualify for the various schemes.

This defeats the purpose of advocating self-help and may erode the dignity of the poor.

A lot more is needed to help the poor. Keeping them within the various aid schemes is a good start.

Leong Choon Kit (Dr)

A version of this article appeared in the print edition of The Straits Times on March 04, 2016, with the headline 'Pay rises not always cause for celebration'. Print Edition | Subscribe