Reward Low-Wage Workers for Work

Workfare Bonus

4.11 Second, I will give a one-off Workfare Bonus to older, lower-income workers.

4.12 As recommended by the Low Wage Workers Committee, the Workfare Bonus will target the lowest 20% of income earners aged 40 and above. But to be fair to those who earn slightly more, the Government has decided to give the Bonus also to those up to the 30^th income percentile, or a monthly income of up to $1,500, provided they live in properties with Annual Value (AV) of not more than $10,000. This will cover most older low-wage workers living in HDB flats. Between 300,000 and 400,000 Singaporeans will benefit from the Workfare Bonus.

4.13 The Bonus quantum will depend on an individual’s income. The Committee had recommended a one month bonus for those earning up to $900 and half a month bonus for those earning more than $900 up to $1,200. I have decided to be a bit more generous. Nearly all full-time workers earn more than $400. Those earning more than $400 and up to $900 will therefore receive $1,200. Those earning more than $900 to $1,200 will get a bonus of $800, while those earning more than $1,200 to $1,500 will get $400. There may be a few regular workers who earn $400 or less a month. These exceptional cases will receive a bonus of three months of their income. To help workers save for their longer-term healthcare needs, 10% of the Workfare Bonus will be set aside and credited into the Medisave account.

4.14 The Workfare Bonus is a reward for regular and productive work. The Bonus will be split into two portions. Eligible workers who have worked continuously for at least six months in 2005 will receive the first portion of the Bonus on 1 May 2006. If they continue to work for at least six consecutive months in 2006, they will be paid the second portion of the bonus on 1 May 2007. The bonus for each year will depend on their average monthly income for the period they had worked in that year. The Government will set aside $400 million for the Workfare Bonus.