Low-wage workers do not contribute to CPF

Posted by Jasmine Yin under Labour Watch on 23 July 2007

FOR sweeping and mopping two storeys of a Raffles Place building four hours a day, 51-year-old Michael Chan pockets $380 a month —about half of his monthly expenses like food and transport.

When asked if he contributes to the Central Provident Fund (CPF), the cleaner expressed the predicament of many other low-wage workers: "I cannot give to CPF because my pay is not enough. If I give, I have only very little (left to take home)."

But by not contributing to the CPF, the bachelor does not benefit from the Workfare Income Supplement (WIS), even if he qualifies for it.

To look into the plight of low-wage workers like Mr Chan, the Ministry of Manpower has formed a tripartite committee, which is chaired by Manpower and Education Minister of State Gan Kim Yong.

On the agenda of the committee when it meets for the first time: To identify key sectors with high incidence of informal workers or self-employed persons who do not make CPF contributions, as well as the obstacles that prevent them from making such regular contributions.

Also, the committee will brainstorm and suggest measures to incentivise CPF and Medisave participation, boost the protection of low-wage worker employment benefits and to develop outreach efforts.

The move comes after the Government introduced the WIS earlier this year to boost the take-home pay of an estimated 438,000 low-wage Singaporeans.

The scheme — which is based on regular work and pays up to $1,200 annually — is applicable to those above 35 years old who earn $1,500 or less monthly. CPF contributions are required as proof of regular work.

Union leader and Member of Parliament Halimah Yacob felt that more could be done to get employers to send their low-wage contract workers for skills upgrading courses which, in turn, can help boost their incomes.

"Employers should look long term. Right now, contract workers are treated like the dispensable and disposable workforce," she said, adding that some workers even stay on contract beyond a year.

Noting the tight labour market, as well as an upward trend in contract hires, Madam Halimah argued that it was also in the firms' interest to push for such skills upgrading, as it could eventually boost the quality of contract workers in the market place at large.

The committee — which includes 16 representatives from unions, employers and Government bodies such as the CPF Board — will also help low-wage workers seek redress in areas where they are deprived of other work-related benefits. Committee to help low-wage workers missing out on benefits

Sources and Relevant Links:

Today Helping them contribute to CPF 19 June 2007

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