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Budget and Committee of Supply 2012

Building an inclusive society for a stronger Singapore

Employment practices Foreign manpower Workplace safety and health Skills, training and development

Committee of Supply Debates 2012

For a quick overview of MOM's Committee of Supply (COS) announcements made known on 5 March 2012, please view the list below or download our COS-in-brief:

Inclusive Growth

Helping Older Workers

  • Enhancement of the Special Employment Credit (SEC)
  • Increasing CPF contribution rates of older workers and self-employed persons
  • Refinements of CPF Life (see press release)
  • Transfer of Ordinary and Special Account Savings into the Retirement Account at Drawdown Age (DDA)
  • Extension of Advantage!

Uplifting Low-Wage Workers

  • Quarterly payments for Workfare Income Supplement Scheme (WIS)
  • Uplifting low-wage workers in the cleaning and security sectors
  • Raising awareness and stepping up enforcement efforts

Economic Restructuring for Sustainable Growth

Continuing Education and Training (CET)

  • Developing a Singaporean Core

Maintaining a Complementary and Sustainable Foreign Workforce

  • Reducing our reliance on foreign workers

Better Workplaces for All

  • Possible legal requirements for Work-At-Height (WAH)
  • Workplace Safety and Health Assist Programme
  • Ensuring effective enforcement and deterrence against contraventions of our work pass framework
  • Require weekly rest day for foreign domestic workers (FDWs) or compensation in-lieu (see press release)

Budget 2012

DPM Tharman highlighted the following MOM-related initiatives in his Budget Speech for 2012 on 17 February 2012.

Increase in CPF Contribution Rates for Older Workers

The Government will be helping older workers grow their retirement savings by raising their employer and employee CPF contribution rates from September 2012. The key changes are:

  1. For employees aged between 50 and 55, their contribution rates will go up by 2.5 percentage points – 2 percentage points from the employer and 0.5 percentage points from the employee – to bring their total CPF contributions up to 32.5% from 30%.
  2. For those between 55 and 60, their contribution rates will go up by 2 percentage points – 1.5 percentage points from the employer and 0.5 percentage points from the employee.
  3. For workers between 60 and 65, their employer contribution rate will increase by 0.5 percentage points, with no increase in their employee contribution rate.

The Government will also be enhancing the Special Employment Credit to provide more support to employers to hire older Singaporeans. The enhanced SEC will be given to employers of Singaporeans aged above 50 and earning up to $4,000 per month.

You can read more about this announcement in our press release.

Managing our Dependence on Foreign Workers

The Government will be introducing further measures to moderate the increasing dependence on foreign manpower which has grown by 7.5% per annum over the last two years.

The key changes are:

  1. DRC reductions:
    1. Services Sector Work Permit DRC will be reduced from 50% to 45%;
    2. Manufacturing Sector Work Permit DRC will be reduced from 65% to 60%; and
    3. S Pass Sub-DRC for all sectors will be reduced from 25% to 20%.
    To give companies time to adjust their strategies, they will have up to 30 June 2014 to comply with the new DRCs in relation to their existing foreign workers. However, from 1 July 2012, companies which hire new foreign workers will not be allowed to exceed the new DRCs.
  2. Construction Sector:
    1. Further reductions in the Man-Year-Entitlement (MYE) by an additional 5% for new projects awarded with effect from 1 Jul 2012. This will bring cumulative MYE cuts to 45% by July 2013;
    2. A higher Foreign Worker Levy (FWL) of $650 will be introduced for basic skilled Work Permit holders in the MYE-waiver category from 1 Jan 2013, and this will be raised to $750 in July 2013.

You can read more about this announcement in our press release. Businesses can access the foreign worker quota calculator on the MOM website to find out what the changes will mean for them.

Enhanced CET funding for Small & Medium Enterprises (SMEs)

The Government will enhance training support for Small and Medium Enterprises (SMEs) by further lowering their cost of training to encourage greater training participation.

This will be applicable for all courses certified by the Singapore Workforce Development Agency (WDA), and for academic Continuing Education and Training (CET) programmes at the polytechnics and the Institutes of Technical Education. Course fee subsidies will be enhanced to 90%, while the absentee payroll cap will be increased from $4.50 an hour to $7.50 an hour. This scheme will run for three years.

In addition, WDA will work with relevant economic agencies and appropriate associated organisations such as the Media Development Authority and the National Taxi Association, so that self-employed persons such as freelancers in the creative sector and taxi-drivers can benefit from the enhanced training support through targeted programmes.

The full Budget speech is available on the Singapore Budget 2012 website or you may view video snippets of the key announcements on our Budget and COS Highlights webpage.