By MP for Hougang SMC, Png Eng Huat
[Delivered in Parliament on 4 Mar 2015]
Madam Speaker, I welcome the initiatives outlined in Budget 2015 to support and invest in the development of Singaporeans, young and old, and to help working class Singaporeans save more for retirement.
It is also fundamental that the government has recognized that beyond the safety net offered by the Public Assistance Scheme for the neediest in our society, there lies at the fringe a group of older Singaporeans who need help to make ends meet in retirement amidst rising costs of living.
Silver Support Scheme
The proposed Silver Support Scheme highlighted in the Budget is supposed to help address the issue of retirement adequacy for older Singaporeans who are asset-rich and cash-poor in retirement. The scheme as we were told will become a permanent feature in our social security system.
The Minister has said the scheme aims to support the “bottom 20 per cent of Singaporeans aged 65 and above with a smaller degree of support extended to cover up to 30 per cent of seniors.” Although these people will fall outside the Public Assistance Scheme, the criteria to qualify for the Silver Support Scheme are no less stringent as the assistance offered under the scheme is meant to go to those with lesser means to subsist especially for those who have retired with little or no savings and family support.
The three factors for older Singaporeans to qualify for the Silver Support Scheme are – their lifetime wages, the level of household support they have today, and the type of housing they live in. So anyone who has undergone the thorough assessment and qualifies for the scheme will be deserving of assistance. The payout will be done quarterly similar to the Workfare Scheme
Madam, a worker receiving quarterly Workfare payout can still subsist monthly as long as he stays employed. Furthermore, Workfare payout is contingent on a minimum period the worker must remain employed. So a quarterly payout in this instance may not affect the worker adversely.
The proposed Silver Support Scheme has put in place clearly defined criteria which will point to only one conclusion if an elderly Singaporean qualifies for the scheme – and that is the person is truly in need of help. A monthly payout in this instance would be more appropriate.
While the Government has stated that the aim of the Silver Support Scheme is to “supplement incomes in a modest but meaningful way” and not to substitute other sources of income, the fact of the matter is any elderly Singaporean who fulfils the three criteria under the scheme would probably be living hand to mouth every month with very little margin for life’s unexpected turns and surprises.
A monthly supplement income will certainly go some way to help these elderly Singaporeans pay their bills and lessen their money woes. I urge the Government to make the Silver Support payout monthly rather than quarterly.
CPF
Next, I would like to talk about the CPF changes.
With longer life expectancy, life no longer begins at 40. Some say life begins at 50 now. Although older unemployed workers are finding it increasingly difficult to get back into work at the same pay and position, our CPF policy should not lend weight to the stigma that older workers are supposed to be cheaper workers.
Tweaking the CPF Contribution rate to make older workers cheaper to hire does not help prevent discrimination against these workers in their mid-40s and 50s. In fact, it does the opposite. It ingrains the notion older workers are a liability rather than an asset to hire so there must be some tradeoff. This is certainly not aiding the effort to eliminate ageism in hiring especially in an aging society like ours.
The restoration of the CPF contribution rate for workers aged 50 to 55 is therefore a step in the right direction to restore the dignity of our mature workforce. While it may be a reality that older workers will get lesser salaries due to a change of job scope, they should not be saving anything lesser in their CPF for retirement.
For that, I support the extra one per cent interest on the first $30,000 of CPF balances for workers aged 55 and above.
Madam, the ownership of our CPF savings is never in doubt. The monies in the CPF belong to each and every one of us but this ownership assurance is cold comfort to people who cannot access their life savings due to moving targets caused by inflation, life expectancy, and the intended pegging of the Draw Down Age to Retirement Age.
There is certainly a need to provide an option for members to start their CPF draw down earlier. The Labour Force participation rate starts to come down from 80 per cent for age group 50 to 54 to about 40 per cent for age group 65 to 69 when the Draw Down Age for most CPF Life members will kick in. So, not all members will retire at age 62 or continue to work till age 65.
If a worker finds his re-employment terms after the statutory minimum retirement age not satisfactory, he will be in a fix because he will have no access to his CPF savings until 3 years later.
I am of the opinion that the Draw Down Age for CPF Life must move in either direction of the statutory minimum retirement age to cater for the uncertainties of life. We should let members decide whether the payout at a particular Draw Down Age of their choice is meaningful because no one can foretell how these member will live their lives at that point in time.
SkillsFuture
Finally, I am heartened to know the SkillsFuture Credit can be used for courses offered by our Institutes of Higher Learning.
Moving forward, I urge the Ministry of Education to institutionalize a ‘Continuing Education’ programme for all our universities and polytechnics.
Such a programme should offer students of all ages an opportunity to upskill and engage in lifelong learning under the support of these established educational institutions with the course fees payable by the SkillsFuture Credit.
Continuing education is a well-established feature of many universities and colleges in the United States and I believe we can learn a lot from their experience in this area. The classes are conducted online and on campus in the evening. An adult, regardless of age, can simply learn about any subjects of interest or even earn college credits leading to a degree or professional certification over time.
Lifelong learning keeps the options open for our mature workers to find part-time work and other employment opportunities after their retirement. More importantly, it keeps the minds active.
In conclusion, Madam, there is no escaping the fact that we are an ageing society. Our budgets over the years reflect that phenomenon as well. All the initiatives put forth by the Government to help older Singaporeans find good jobs will come to naught if we do not tackle that ‘quiet, unstated discrimination’, as what the Finance Minister has coined, against older workers in their mid-40s and 50s. We should as a society strive to change mindset and tackle ageism in hiring going forward.