Unemployment Insurance For Singapore: Yay or Nay?

So the Workers’ Party has released a consultation paper to propose an Unemployment insurance…once again…(they never give up, don’t they…)

Anyway, the 17-page consultation paper which was released on Monday, 12 Dec, lists how the scheme would see employers and employees each contribute about S$1.90 every month, based on the average wage of S$3,782 in 2014.

The total premiums collected would be about $100.9 million a year and the estimated payout would be a maximum of $63 million, based on the average resident redundancies of 7,950 between 2013 and 2015, and the 2014 average wage.

The WP first called for an unemployment insurance scheme at the Committee of Supply debate in April 2016.

But come to think of it, do we really need such a scheme at this moment?

Don’t we already have many other support systems that help workers in a more holistic way?

And in the current situation where the economic is on a slowdown, is the unemployment insurance even practical? Isn’t it an added cost for businesses and individuals?

Additionally, if the unemployment insurance scheme is to help workers who are displaced because of whatever reason, then there is a couple of worker-related programmes/schemes to support the transition.

Prime Minister Lee Hsien Loong said in his May Day Rally speech that Singapore has “something even better” than a retrenchment insurance scheme.

“Ours is different, The scheme is not paid by the workers or employers. It’s paid by the Government. And the scheme is used not to help you stay unemployed, but to help you get employed. Get a job, upgrade yourself, make yourself more valuable….” – Pm lee hsien loong

Adapt and Grow, Professional Conversion Programme, Career Support Programme and WorkFare are just some of these programmes and assistance to help workers transit through a possible retrenchment.

And for those who really need the financial assistance, there is ComCare which is targeted at those most in need.

And a troubling question about unemployment insurance, is: won’t it allow for companies to retrench employees more easily knowing that there is the insurance scheme as a safety net?

And, won’t companies feel that they would need to exercise the option to retrench employees since they have already been paying premiums for the insurance scheme?

Labour MP Patrick Tay

NTUC Assistant Secretary General Patrick Tay spoke on a radio show in July about Unemployment Insurance  and said he was not against it and said that the Government should do a detailed study on it.

But he did put up three questions that he asked himself as well:

  1. Who’s going to pay the premium?
  2. How long should we give this scheme support?
  3. How much of the pay-out should it be?

 

Indeed, if we are going to go the route of an insurance scheme for retrenchment, then maybe we all need to sit back and think if its good enough for us.

 

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Arthur Lee

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1 Comment

  • The call for the setting up of a ‘retrenchment insurance’ continues more so during an economic downturn or when the number of retrenchment cases has increased sending the jitters.

    The Govt is intransigent on the use of CPF savings other than as the people’s retirement nest egg.

    It will be so as long as the fear of giving in to the promotion of welfarism remains.

    What should be done for non-NTUC members, especially the middle-income group when they lose their job?

    I hope CPF can use S$1 each per month from the CPF contribution to set up a “CPF retrenchment fund”, which should have terms and conditions on how this fund will be allowed to be paid to ‘retrenched Singaporeans’ as ‘a form of loan’ to them.

    They have to return the amount disbursed to the ‘CPF retrenchment fund’ when they find employment.

    Sharing more on what I wrote:

    https://tankoktim.wordpress.com/2011/02/10/185/

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