Committee of Supply debate

Older workers: Re-employment age ceiling to rise

The Education and Manpower ministries yesterday outlined a range of new measures to prepare students and workers for a more challenging economic landscape. We look at the key changes.

Elderly men at Raffles Place.
Elderly men at Raffles Place.PHOTO: ST FILE

The Government has spoken of plans to raise the re-employment age ceiling from the current 65 to 67, and has finally set a date to do so.

It will happen on July 1 next year.

Companies will have to offer re-employment to eligible workers up to the age of 67 from that date.

These workers can also be re- employed with a different company if they agree to it.

But until the new law sets in, the Government will continue to support companies that voluntarily re-employ workers older than 65, by giving them a wage subsidy of 3 per cent.

In another measure aimed at helping older workers, a legal provision allowing wage cuts when employees turn 60 will also be removed.

The majority of companies here no longer practise these cuts.

Ms Jessica Tan (East Coast GRC) asked why the Manpower Ministry did not remove the retirement age altogether.

Manpower Minister Lim Swee Say replied that this could actually be worse for workers as it means that companies can terminate their employees' services earlier.

Labour MP Heng Chee How (Jalan Besar GRC) suggested that help be offered to companies which want to raise the retirement age internally beyond what is legally required.

Mr Lim agreed and suggested that the Tripartite Alliance for Fair and Progressive Employment Practices champions efforts.

Olivia Ho

A version of this article appeared in the print edition of The Straits Times on April 09, 2016, with the headline 'Older workers: Re-employment age ceiling to rise'. Print Edition | Subscribe