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New Workfare Scheme Helps More Workers Now

Employment practices
  • The Straits Times (05 February 2008) : New Workfare Scheme Helps More Workers Now
  • The Straits Times (26 January 2008) : Bring Back Original Workfare Bonus Scheme
  • The Straits Times (25 January 2008) : Lack of Cash, Info - So Many Don't Sign Up For Workfare

New Workfare Scheme Helps More Workers Now
- The Straits Times, 05 February 2008

Please refer to the article "Lack of cash, info – so many don't sign up for Workfare" (ST, 25 Jan 08), and the forum letter "Bring back original Workfare Bonus Scheme" (ST, 26 Jan 08).

2. The Work Support Programme and other existing financial assistance schemes do provide cash assistance to needy low wage workers and their families. The Workfare Income Supplement (WIS) scheme serves a different purpose by helping low wage workers save more CPF through work. This is important as low wage workers and their families also need to draw from their CPF for medical, housing and retirement purposes. When the WIS was introduced, their contribution rates were also reduced, to increase their take home pay.

3. For the formally employed, about thirty cents of every dollar from the WIS will be paid in cash. But this is only fair because employees contribute up to 20% of their wages into their CPF. The self-employed person only needs to contribute up to 8.5% of their wages into their Medisave. In return he will receive WIS which is up to 16% of his wages, but paid fully in CPF.

4. MOM and the CPF Board are working together with the unions, employers and the grassroots organisations to help low wage workers receive WIS. CPF Board has also stepped up its enforcement efforts, which over the period from Jan – Aug 07, have resulted in employers starting to contribute CPF for more than 22,000 workers. More workers are therefore now able to benefit from the WIS. An additional 15,000 formal employees aged above 45 years old have received WIS so far, compared to the previous Workfare Bonus Scheme.


Bring Back Original Workfare Bonus Scheme
- The Straits Times, 26 January 2008

In 2006, the Workfare Bonus Scheme was well-received by low-wage workers. The extra income went a long way to help supplement their household incomes. However, their joy was short-lived: the Workfare Bonus Scheme was replaced by the Workfare Income Supplement (WIS) scheme last year. WIS is tied to the CPF system and requires the worker to make a CPF contribution before he is eligible for WIS. Self-employed and informal workers have to make a contribution to the Medisave Account and WIS is paid to this account.

We have disabled people working at our sheltered workshop who, rather than rely on public assistance, are prepared to work as far as they are functionally able to. On average, they receive a monthly allowance of $300 from the subcontract jobs that we help to secure for them. Under the current guidelines, they are likely to be classified as self-employed/informal workers and therefore would need to make a contribution to their Medisave in order to receive WIS. Many can hardly make ends meet. It will be difficult for them to find the extra funds to contribute to Medisave.

They face the same situation as the karung guni man highlighted in the article, 'Over 100,000 low-wage workers have not signed up for Workfare' (ST, Jan 23), who was quoted as saying, 'I don't even have enough for food, why should I put it in Medisave?' No wonder more than 100,000 low-wage workers have not signed up for WIS. Besides the lack of money for contribution to Medisave, many are probably illiterate and don't know how to go about filling up forms.

We hope the Government will view this group of workers more compassionately and reconsider the requirement of contribution to Medisave. Specific to our disabled workers, we hope the Government will consider bringing back the original Workfare Bonus Scheme.


Lack of Cash, Info - So Many Don't Sign Up For Workfare
- The Straits Times, 25 January 2008

Keen for her share of Workfare, part-time hawker assistant Ramlah Mahmood went to a CPF office to apply for it. But what she heard from an officer put her off. The 57-year-old was told she had to top up her Medisave to get on the Workfare Income Supplement scheme (WIS).

'They said I needed to put in around $80. I couldn't pay. I don't have that money,' said Madam Ramlah, who makes around $500 a month, and does not contribute to the Central Provident Fund (CPF). Like her, canteen stallholder Koh Chin Aik, 56, is also not on WIS. His reason is that he is not sure how it works or even if he qualifies for the scheme. The two casual workers' reactions to WIS demonstrate the two stumbling blocks MPs say are stopping about 100,000 casual or self-employed workers from getting on the scheme although they could qualify for it.

The large pool of low-wage workers falling through the cracks was disclosed in Parliament on Tuesday when Senior Parliamentary Secretary (Manpower) Hawazi Daipi disclosed that out of the 160,000 workers who collected the one-off Workfare Bonus, only 54,000 have signed up for the later WIS. WIS was announced in last year's Budget to replace the Workfare Bonus, which was given over two years to workers aged 40 and older and earning, at most, $1,500.

The new scheme is a permanent social safety net for those aged 35 and older, earning $1,500 or less. The difference between them is that the Bonus was a one-off cash payout while the new scheme is linked to CPF. But the CPF-linked payment differs between formal and casual workers. Formal workers get some cash, and the rest goes into their CPF. Casual workers and the self-employed have the entire WIS sum paid into their CPF Medisave accounts to take care of hospital stays and some chronic ailments.

The prospect of having to fork out cash for CPF, yet not get any cash back, is a big sticking point with many. Said Madam Maryanti Chaman, 35, a helper at a canteen stall: 'Many friends have told me about the scheme, even my boss. But my pay is already so low, so if I sign up, it will be cut some more?'

Convincing such casual workers to contribute to Medisave is a daunting task, said Nominated MP Cham Hui Fong, who heads NTUC's Unit for Contract and Casual Workers. Her unit, in its outreach efforts, has convinced about 6,000 to become CPF contributors. 'You can tell them the long-term benefits of Medisave, but it's hard because they don't see it in cash. Even the Medisave Contribution Draw is not attractive,' she said, referring to a Government lucky draw to encourage casual workers and the self-employed to contribute to CPF.

Despite the relatively poor numbers overall, Ms Cham and MPs are opposed to changing the policy to let these workers receive cash payouts. They argue that the scheme is meant to help workers save for the future, not lighten their present load. Instead, they see more education as the way forward. Said MP Ahmad Magad, chairman of the Government Parliamentary Committee for Manpower: 'I know it will take some convincing, and I think grassroots leaders can play a bigger role and MPs, when they do their walkabouts, can do their part too.'

His parliamentary colleagues, such as Ms Lee Bee Wah, agree. The MP actively tries to get her residents in Ang Mo Kio to sign up. 'My grassroots leaders are already going out to engage these workers. We got CPF officials to give a talk to the grassroots leaders and block representatives. And I wrote a message to the workers to urge them to join,' she said. Labour MP Josephine Teo put it this way: 'We have an uphill task but I don't think all is lost. Already 287,000 people have been helped,' she said, referring to the total number of workers who are on the WIS scheme.