Rationale to Link Workfare Special Payment to Medisave Contributions

Parliamentary Question by Ms Carrie Tan:

To ask the Deputy Prime Minister and Minister for Finance in respect of the Workfare Special Payment (a) what is the rationale behind having up-to-date MediSave contributions as a qualifying criteria for the payment; (b) how many low-wage workers who are otherwise eligible for this payment have been prevented from receiving this due to arrears in their MediSave contributions; (c) how many of those who are not eligible for this payment have contribution arrears amounting to more than $3,000; and (d) whether the Ministry will consider removing such contributions as an eligibility criteria especially in this difficult time when liquidity and cashflow is needed by individuals to survive day to day.

Parliamentary Reply by Second Minister for Finance, Mr Lawrence Wong:
   
The Workfare Special Payment is a one-off Workfare payment, to provide additional support for lower-wage workers receiving the Workfare Income Supplement for Work Years 2019 or 2020. 

The need to contribute CPF to benefit from Workfare is not new. The CPF is a key pillar of Singapore’s social security system, which enables all working Singaporeans to save towards their own retirement.  

While CPF contributions for employees are made on a monthly basis by their employers, Self-Employed Persons (SEPs) only need to make MediSave contributions at the end of the Work Year after declaring their incomes. This is the cause of MediSave arrears.

SEPs have until March 2021 to declare their income for 2019 and make their required MediSave contributions, to be assessed for Workfare. As at May 2020, 49,900 SEPs have declared their income for 2019 and are eligible for Workfare. Amongst them, about 44% have made their MediSave contributions, and the rest have until March next year to do so. Letters will be sent to these SEPs to remind them of their MediSave obligations. 

There are about 600 Workfare-eligible SEPs who have MediSave contribution arrears of more than $3,000, accumulated over the last two Work Years. 

We recognise this is a difficult period for many. But it is important for SEPs to continue saving for their healthcare needs through MediSave, while they also get support from the Government through Workfare. The CPF Board has helped SEPs who faced difficulties, by working out alternative arrangements for them to meet their MediSave obligations. Many lower-income SEPs would also have received support under various government schemes. Those facing difficult circumstances can also visit the MSF Social Service Offices if they need further help.