6 things workers need to know from the Singapore Budget 2022 and how it will affect you

By February 21, 2022Current
Budget 2022 Workers

TL;DR – This Budget means more training and upskilling for workers.

Last Friday (18 February) saw Minister for Finance Lawrence Wong delivering his Budget 2022 statement in Parliament.

In his close-to-two-hours Budget Statement, the finance minister announced a slew of measures to support workers as Singapore continues to build a strong Singaporean core workforce.

Here, in this article, we have summarised 6 key announcements from the Budget 2022 speech that you, as a worker, need to know.

1. Changes to the foreign worker policies

To help ensure that Singapore brings in foreign workers who are of the right quality, the framework for both the Employment Pass (EP) and Special (S) holders will be updated from September this year.

The minimum qualifying salary for new EP applicants will increase from $4,500 to $5,000, while the minimum salaries for EP applicants in the financial services sector will be increased from the current $5,000 to $5,500.

For S Pass applicants, the minimum qualifying salary will be raised from the current $2,500 to $3,000. New S Pass applicants in the financial services sector, on the other hand, the qualifying salary will increase to $3,500.

The finance minister also added that the Tier-1 levy for S-Pass applicants will be progressively increased from the current $330 to $650 by 2025.

With the higher salary thresholds for the EP and S Pass holders, hopefully, more companies will be encouraged to hire local workers!

2. More support for mid-career workers

Exceptional help will be provided for mid-career workers, especially those in their 40s to 50s, said Minister for Finance Lawrence Wong in his Budget statement.

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In particular, the Government will be making the SGUnited Mid-Career Pathways Programme – Company Attachment a permanent feature.

This highly subsidised attach-and-train programme will offer mid-career jobseekers with full-time attachment opportunities of between four and six months to help them widen their professional networks and gain industry-relevant experience. Trainees will also receive an allowance of up to $3,800 a month during the attachment.

Besides the SGUnited Mid-Career Pathways Programme, it is also announced that the Government will be launching a new training programme, the SkillsFuture Career Transition Programme, that will start from April.

This new train-and-place scheme puts jobseekers through industry-oriented courses lasting between three and 12 months and includes elements of industry experience, such as work attachments or industry projects.

3. Extension of the Progressive Wage Model to more sectors to uplift the low-wage workers

Working on the recommendations of the Tripartite Workgroup on Lower-Wage Workers (TWG-LWW), the Government has also announced that the Progressive Wage Model (PWM) will be extended to the retail, food services, and waste management sectors over the next two years.

First mooted by the National Trades Union Congress (NTUC) in 2012, the scheme will be extended to in-house cleaners, security officers, landscape workers, administrators, and drivers across all sectors.

To further support local lower-wage workers, companies employing foreign workers will be required to pay all their local employees at least the Local Qualifying Salary (LQS) of at least $1,400 per month.

Additionally, a Progressive Wage Mark will be launched to accredit firms that pay progressive wages and local qualifying salary as well. The government will also require all its eligible suppliers to be accredited with the Progressive Wage Mark when they tender for government contracts from March 2023 onwards.

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4. Enhancement of the Workfare Income Supplement scheme

The Workfare Income Supplement (WIS) will also be enhanced to give lower-wage workers a further boost. From 1 January 2023, the qualifying income cap for the WIS scheme will be raised from $2,300 to $2,500 per month.

A $500 minimum income criterion will also be introduced to encourage part-timers and casual workers to take up full-time positions.

This WIS enhancement is expected to benefit more than half a million workers, allowing them to start planning for their housing and retirement at an earlier age.

5. Supporting our senior workers

Older workers aged 55 to 70 will continue to get an increased employer and employee CPF contribution rate. The government will provide the employers with a one-year CPF Transition Offset equivalent to half of the increase in employer CPF contributions.

With the first increase implemented earlier this year, older workers will see a total increase of three to four percentage points in their CPF contribution rates over these two years.

The Government will also raise the Basic Retirement Sum payouts by 3.5% a year for Singaporeans turning 55 between 2023 and 2027 to help older workers with their retirement adequacy.

6. More support to help workers train and businesses transform

A sum of $100 million has been set aside to support NTUC in its efforts to upscale workers’ training and businesses’ transformation through the Company Training Committees (CTCs), announced Finance Minister Lawrence Wong.

A portion of the total sum will go towards a new grant that will be administered by NTUC to support companies that have already set up CTCs to implement their business transformation plans.

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In case you are not aware, the CTC is an initiative by the Labour Movement that brings together the union and employees to develop concrete firm-level transformation plans, which help both companies and workers to be ready for the future.

To date, more than 800 CTCs with companies of various sizes have been formed since the initiative was first launched in April 2019.

In a Facebook post, NTUC Secretary-General Ng Chee Meng said that he is encouraged that the Government has taken in NTUC’s feedback to put together a targeted budget that includes a range of measures to protect workers, uplift them through training and enable them to cope with the cost of living.

 

The labour chief adds that the Labour Members of Parliament will continue to champion for the workers while ensuring that workers are supported as Singapore continue to build capabilities for the future.

 

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Joey Wee

Author Joey Wee

I am nice, most of the time!

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