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     FrontPage Edition: Thu 12 Jan 2006

Proposed Workfare Bonus Scheme to help low-wage workers



Multi-ministry Committee recommends wide-ranging assistance to help low wage Singaporean workers and households
The Ministerial Committee on Low Wage Workers has recommended a package of Workfare measures costing up to $1 billion to help low wage workers.
The proposed measures will incentivise work and encourage low wage workers to take on jobs, upgrade their skills and stay employed.
It also focuses on children of low wage workers to ensure that the next generation has the skills and know-how to create hope for a better future.
A holistic approach to helping low wage workers
To ensure that low wage workers continue to benefit from our economic progress, the Committee recommends a holistic package of sustainable strategies, based on ¡°Workfare¡±.
The desired outcome is for all who can work to find meaningful jobs and earn adequate wages to support themselves and their children. They should be able to own their homes, educate their children, and put aside enough for their medical and retirement needs.
The Committee¡¯s recommendations are clustered under six broad spokes within the Workfare framework. These are:

(i) Rewarding Work

(ii) Social Support to Enable Work

(iii) Higher Skills for Better Jobs

(iv) Expand Job Opportunities

(v) Creating Hope for the Future

(vi) Sharing in the Nation¡¯s Progress

Rewarding Work
Two key proposals to reward work are the new Workfare Bonus Scheme and the CPF Housing Grant Scheme that will help 300,000 Singaporeans who satisfy work requirements meet daily expenses and own homes.
Workfare Bonus Scheme
To incentivise work, the Committee recommended that the Government reward older, low income workers with a Workfare Bonus if there are budget surpluses. In line with the objective of Workfare, these low wage workers must satisfy a minimum period of work to qualify for the Workfare Bonus.
The scheme primarily targets those within the lowest 20% of income earners who earn $1,200 per month or less.
There are potentially 300,000 beneficiaries and about 200,000 of them would have fulfilled the minimum work period within the last six months.
The Committee recommends that those in the lowest 10% should be given more help. If surpluses allow, we recommend for this group earning $900 or less a month, a Workfare bonus capped at the equivalent of one month¡¯s salary.
Correspondingly, those earning more than $900 to $1200 (lowest 20% of income earners) per month could receive a bonus capped at half a month¡¯s salary.
To help low wage workers build up their savings to take care of their longer-term needs, the Committee also recommended that 10% of the bonus be credited into the workers¡¯ Medisave Account for their healthcare needs.
Housing Grants for First Time Buyers
To help low wage workers own homes as a tangible reward for their efforts, the Committee recommended that the Government assist low income families with a new CPF housing grant to help purchase their first HDB flat. In line with the objective of Workfare, this grant is contingent on a period of employment.

Source: Press Release 12 Jan 2006

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