The Case for Disproportionately Raising Income Thresholds for Workfare

Chairman, I beg to move, “That the total sum to be allocated for the Ministry of Manpower be reduced by $1.”

The income thresholds for GST vouchers and Workfare have moved in tandem

In 2025, this assessable income threshold for GST vouchers was revised upward, from $34,000 to $39,000. This was not the first time; it was set at $24,000 in 2012, before being consistently revised every few years. These historical revisions were due to a combination of rising costs of living, as well as the GST hike. This represents an increase, since 2012, of around 1.6 times.

In contrast, the income thresholds for the Workfare Income Supplement (WIS) has gone from $1,700 pre-2013, to $1,900 in 2013, to $2,500 in 2023, to $3,000 from 2025. The equivalent increase is around 1.75 times.

But the loss of purchasing power hit the poor the most

While this may seem comparable, the truth is that the recent bout of inflation hit the poorest the most. This is because the categories where prices rose the most—notably food, transport, and rent—consume a disproportionate share of the incomes of those on the lower end of the distribution. It is a conclusion backed my ample research, both in Singapore, and in the rest of the world.

It is true that this may be partially offset by nominal wage gains that bolster purchasing power, but it is unclear that this is the case. After all, while real incomes for the lowest percentile showed significant progress in 2024, this comes on the heels of many years of falling behind median real income growth.

I believe it is time to disproportionately raise the income threshold for WIS to $3,500, to better support those who are working hard to make ends meet, but struggling under the burden of high costs.

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