TL;DR – The Workfare Income Supplement (WIS) has been around since 2007. It’s time we get to know it better.
In the past weeks, much has been said and argued over on the topics of minimum wage and redundancy insurance. Most netizens merely focus on this: Other countries have this, but not Singapore. And what follows in most online discussions are angsty comments from opposition supporters about how uncaring the government of the day is.
Let’s the example of the discussion on minimum wage.
Dr Jamus Lim from the Workers’ Party did well to spark discussion about this since one of the key proposals in their laundry list of over 90 ideas was to implement a national minimum wage of $1.300.
SMU Lecturer asks Workers’ Party’s Jamus Lim about Redundancy Insurance and Minimum Wage
The trouble is many Singaporeans just stop at comparing Workers’ Party’s $1,300 minimum wage proposal with the Progressive Wage Model (PWM) and conclude that the former is better.
I personally don’t see how the minimum wage of $1,300 is a superior scheme since it’s only the first rung whilst the PWM is a ladder of skills and wages that help our lowest-income workers move up.
Since the first implementation of PWM for the cleaning sector in 2015, we’ve seen real wage growth in the three sectors with PWM.
Between 2014 and 2019:
- Income grew by 26 percent for 40,000 cleaners
- Income grew by 36 percent for 36,000 security guards
- Income grew by 30 percent for 3,000 landscape maintenance workers
Moreover, what many naysaying netizens have failed to see is that we should not be comparing just minimum wage vis-a-vis PWM.
We ought to also take into account other support schemes for the lower-income Singaporeans, such as Workfare Income Supplement and also the Silver Support Scheme for the elderly poor.
What is Workfare Income Supplement (WIS) scheme?
Not familiar with the Workfare Income Supplement (WIS)? Here’s a quick view of the scheme
Yeps, it’s been around for over a decade, but still, not enough Singaporeans know about it. I suppose if I look at things more positively, it probably means they earn above the qualifying income and hence, are not within the bottom 20 percentile.
WIS qualifiers are being reviewed every three years. The last reviews were in 2016 and then in 2019.
The latest review saw the qualifying income being adjusted from $2.000 to $2.300 per month.
Exceptions are if you own a property with an annual value (AV) of over $13,000, if you own two or more properties, or if your spouse’s annual income exceeds $70,000.
Curious how much the WIS payouts are?
So tell me, how is minimum wage a superior scheme when the PWM, coupled with WIS, is already more than $1,300 in most cases?
PWM is minimum wage by sector and more, since it provides skills upgrading and progression opportunities for those who have the ambition and aptitude.
And precisely because it’s by sector, tweaks and solutioning can be more targeted and can also help solve issues peculiar to the sector.
For instance for the cleaning sector, the labour movement has been fighting for proper rest areas, employers to support workers with non-chronic outpatient treatment costs, etc.
Low-wage Singaporeans to receive first half of $3,000 Workfare Special Payment
We’re now in the midst of a global pandemic. Lives and livelihoods are at stake. The Singapore government has released four Budgets amounting to nearly S$100 billion to safeguard livelihoods and support Singaporean families.
Here’s a snapshot of the support for Singaporean households.
It’s the July month now. Noticed that there’s a Workfare Special Payment (1st payment)?
And there’s a Workfare Special Payment (2nd payment) in the month of October too.
The WSP is a grand total of $3,000 in cash.
This will be paid over two equal payments of $1,500 each, in July and October 2020.
All Singaporean employees and self-employed persons who received Workfare Income Supplement (WIS) payments in 2019 will also receive a Workfare Special Payment (WSP) in 2020. This is to provide additional support for low-wage workers aged 35.
About 400,000 lower-income Singaporeans would already have received this SMS yesterday (July 25).
Yeps, this special payment was announced by DPM Heng Swee Keat under the Care and Support Package at the Resilience Budget on 26 March 2020 to provide more support to Singaporeans who need more help during this period of economic uncertainty.
Join the discussion 2 Comments
Dear Ms. Teo,
Not criticizing you personally, just sharing from some data digging I did.
You posted the WIS snapshot of the Maximum Annual WIS that will be paid. I wonder if you have used the WIS calculator https://www.workfare.gov.sg/Pages/Calculator.aspx
I’m seeing ridiculously low numbers of WIS payouts and the numbers decrease below a certain income level all the way down to $10
(Extracted from the calculator footnotes:”The minimum cash payment is $10 per payment. The minimum CPF payment is $10 per month.”)
I believe WIS is paid only if the person’s income is somehow captured by the authorities e.g. IRAs or by some licensing authority. Some of the low income e.g. tissue sellers, cardboard collectors, etc consider themselves to be working but not being on the official radar of the authorities, they do not receive any WIS nor the special WIS2020.
The problems of poverty are intertwined with the issues of minimum wage, PWM (which only covers 3 industries). COMCARE and Silver Support comes into the picture as well. If you work out the cash payouts which the poor need to survive on a day-to-day basis (as opposed to waiting for months to get some monies), you may be surprised that the system needs a fair bit of tweaking if not a major revamp.
You may also be surprised that there is very minimal cash payouts to the Pioneer and Merdeka Generation. Most of the benefits are medical-related subsidies and as I have heard from talking to some of the uncles, “subsidies do not fill tummies”.
(from the Merdeka Generation)
Thanks for your comment, Kin Poh. Appreciate the sharing.
Actually yes, we’re aware that some of the WIS payout can be too low. In fact, the younger these lower-wage workers are, the lower their payout. We too hope that something can be done quickly to uplift the lives of essential workers, especially the lower wage ones and even more for the elderly poor in essential services.
Mr Zainal Bin Sapari from NTUC had previously advocated for a review of the WIS and he made two important points:
“… However, a fundamental review of WIS can happen only if the basic assumptions are questioned. While WIS can supplement a person’s income, it may not be necessary for the payout quantum to be differentiated based on age to incentivise older workers to work. In other words, I posit that older low-wage workers will work regardless of the WIS quantum.
I am not advocating for any reduction in the WIS payout to older workers, but for the payout to be the same across the different age groups based on their income.
While the current qualifying income and age criteria should remain, removing the age differentiation would mean that the 35 and 65-year-old worker, earning the same salary, will receive the same payout quantum.”
“… But if the WIS is intended to be an income supplement to reduce income inequality, then the payout quantum should be differentiated based on income only.
Another area of enhancement is the WIS cash-CPF ratio. Currently, cash constitutes 40 per cent of the payout quantum. Since WIS is to supplement income, it should therefore translate to higher disposable income for the workers to address their immediate needs.
I would therefore call for the cash component to increase to 80 per cent, with 20 per cent channeled to CPF – similar to the 20 per cent employee CPF contribution rate.”
We think he has a good point here, that we should review/remove the age differentiation in WIS payouts. After all, the intent of WIS is to supplement the income of lower wage singaporeans, why then should there be lower supplement for younger workers? the low pay hurts them just the same as the older workers, if not more if they’ve to support a family. We’ve interviewed a Singaporean landscape technician in the past and he shared that he only received less than $50 in WIS cash payout every month.
And we also think the cash component of 40% is too low.
But this would be a problem with the quantum, and not with the PWM model itself. So we maintain our stand that a national level minimum wage is too blunt an instrument, and it also brings along a whole host of other problems. However, we do think the PWM should be applied to more sectors quickly, and also there should be stricter enforcement since there are still errant employers exploiting workers, even if just a small fraction.