MOF's Statement in response to Lee Kuan Yew School of Public Policy's report on minimum income standards for households in Singapore (2021)

1. Anyone reading the LKYSPP report should bear in mind the limitations of the approach used. The conclusions may not be an accurate reflection of basic needs largely due to assumptions used.

i. The methodology used to arrive at the Minimum Income Standard is highly dependant on group dynamics and the profile of the participants. With most participants having post-secondary education and 15% living in private properties, the findings expressed may not be reflective of the circumstances of the lower-income families. Some issues include: 

• Discretionary expenditure items such as private enrichment classes, jewellery, perfumes, and overseas holidays were included in the estimates. The study also did not take into account alternatives, such as MOE student care centres and the various self-help groups, which provide enrichment classes for those who need them at low cost.

• Researchers considered mortgage payments for flats as an expenditure item, but downplayed the fact that the non-interest components of such payments are more akin to savings that help households build up valuable housing equity.

• The report concluded that in order to meet basic needs, the MIS budget required is around $1,600 per month per capita for both single and partnered households. This $1600 is in fact closer to what an average household spends per member, based on the Household Expenditure Survey 2017/18 (DOS Occasional Paperattached for reference). This means that it is in excess of basic needs for an average household.

ii. There are errors in certain assumptions which under-state the amount of Government subsidies and financial support received by low-income families. The amounts reflected in the report are what median earner receives, not low-income families. For example, a low-income household can receive up to $80K under the Enhanced Housing Grant for a new flat, more than the $15K received by a household with two median-income earners. 

2. At the same time, the report offers an additional data point on the expectations and aspirations of Singaporeans, which will continue to evolve over time. The Government is sensitive to these shifts and regularly reviews our scope and coverage of assistance to ensure it is relevant and adequate. For example, 

i. Over the last decade, we have almost doubled our social spending from $17 billion in Financial Year (FY) 2010, to $31 billion in FY2019. 

ii. At the recent NDR, we have recently announced major moves to uplift low-wage workers.

iii. Over the last few years, we have also:

• enhanced our preschool subsidies, the MOE Financial Assistance Scheme for primary, secondary and pre-university students, and bursaries for students in our institutes of higher education.

• enhanced healthcare subsidies (e.g. CHAS extended to cover all Singaporeans with chronic conditions), Pioneer Generation/Merdeka Generation seniors enjoy special healthcare subsidies and introduced schemes such as MediShield Life and CareShield Life

3. The Government will continue support those in need through a combination of building their capacity for self-resilience, strengthening their family support, and partnering with the community for further support.