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This is superior to automatic benefits that will bump up the jobless rate, Finance Minister Tharman Shanmugaratnam said yesterday.
He was responding to MPs who had called for fresh unemployment benefits.
Non-Constituency MP Sylvia Lim suggested temporary financial relief for workers who lose their jobs. The Workers' Party chairman said the means-tested allowance could be up to $500 a month.
Mr Sin Boon Ann (Tampines GRC) and Nominated MP Siew Kum Hong proposed permanent unemployment insurance.
Disagreeing with the trio's approach, Mr Tharman said: 'We must be careful not to move towards a system of broad-based unemployment benefits. The weight of evidence clearly shows such schemes ultimately lead to a rise in the number of unemployed and to the unemployed staying out of a job for longer.'
He cited a study by the Organisation for Economic Cooperation and Development. It found that a 10 per cent rise in unemployment benefits leads to a 7 per cent drop in the number of jobless people returning to work.
He returned to an oft-cited reason: Benefits are an 'entitlement' that quell the incentive to find a job.
He told the story of Mr Tay, a worker who lost his job, to show that discretionary aid works. The sole breadwinner of a family of five turned to a community development council. From last September to November, he received $510 a month in cash and utilities vouchers.
Being a person of 'strong will', Mr Tay found work again as a cleaner. This entitles him to a Workfare Income Supplement payout of $2,200. If he had not landed a job, he would have received training.
There are also family benefits. He gets childcare subsidies of $200 a month for his youngest child. Household benefits, including GST credits, are worth $2,100.
Total aid for him: $8,230.
'We provide real support where it is needed, help individuals and families get back on their feet, and help us stay a society with self-reliance at its core,'' emphasised Mr Tharman.
'We should therefore continue with our approach and keep on improving it.'
Replying in detail to Ms Lim, he noted that the jobless often receive 'far more assistance' than what she had proposed.
The four limbs of the State's approach involves: first, matching people with jobs; and second, training. Third, the Work Support Scheme gives 2,400 people comprehensive help - from cash grants to education to medical care. Dr Vivian Balakrishnan, Minister for Community Development, Youth and Sports, will soon flag the enhancements. Fourth, the jobless can restructure their HDB loans.
Ms Lim later rose to say her proposal was targeted at the jobless worker, but was not meant to replace such schemes to lift up the family as a whole.
Summing up, Mr Tharman said: 'For any individual who is willing to adapt, to be flexible and to do what it takes to get a new job, we will help you.'
