Review of wage top-up scheme for low-income workers

The latest review comes amid a continuing focus on supporting low-wage workers as Singapore moves to tackle inequality.
The latest review comes amid a continuing focus on supporting low-wage workers as Singapore moves to tackle inequality.PHOTO: ST FILE

A scheme that tops up the income of low-wage workers is undergoing a review.

This comes as fewer people qualified for the payouts last year compared with 2015, after more than 10 per cent of recipients saw their salaries rising above the income ceiling for the Workfare Income Supplement (WIS) scheme.

Announcing the review in a Facebook post yesterday, Minister of State for Manpower Zaqy Mohamad pledged to ensure that more than 20 per cent of Singaporean employees continue to benefit from the scheme, even as their wages improve.

Under WIS, Singaporeans earning a gross monthly income of not more than $2,000 can receive wage supplements of up to $3,600 a year. These are made in the form of cash and Central Provident Fund top-ups.

Last year, 366,000 workers received the top-ups, a decline from the 389,000 workers in 2015.

Commenting on this, Mr Zaqy said it was because 42,000 recipients saw their wages increase above the scheme's income ceiling in 2016 and 2017.

"In other words, they 'graduated' out of WIS because they are now earning more. This is not a bad development at all," he added.

"Yet, our aim remains the same - WIS will continue to be a key pillar of support for our low-wage workers."

The results of the review, which Mr Zaqy is leading, will be out next year. More details will be announced during next week's Parliament sitting.

In the last review in 2016, the income cap for the scheme was raised from $1,900 a month to not more than $2,000. The maximum payouts were also increased from $3,500 a year to $3,600, depending on a worker's age and income, with the money being paid to recipients monthly instead of quarterly.

These payouts, said Mr Zaqy, can amount up to 30 per cent of a worker's annual income, and is a "significant top-up to their salaries".

The latest review comes amid a continuing focus on supporting low-wage workers as Singapore moves to tackle inequality.

Mr Zaqy said wages of low-wage workers "have increased faster than inflation", and also grew faster than the wages of higher earners in the past five years.

A version of this article appeared in the print edition of The Straits Times on July 07, 2018, with the headline 'Review of wage top-up scheme for low-income workers'. Print Edition | Subscribe