What is workfare and how it is helping our low-wage earners now

Workfare is Singapore’s way of helping older, lower-waged Singaporeans. It supplements their incomes and retirement savings and provides funding support for training. It is one of the four pillars of social security in Singapore. It encourages people to get back to work, support the economy for others and the impact: real incomes (at the bottom) grew by 40%.

Workfare has helped Singaporeans (especially at the bottom) stay employed and have a chance to upgrade to better skilled jobs with higher pay and altogether this gives them an edge over foreign workers.

It comes in two components:

  1. The Income Supplement: This is the cash and CPF payouts given by the government to persons who are employed.
  2. The Training Support: This is the training component, given to help workers learn and upgrade.

It has worked for Singapore through times of peace…and through economic shocks, such as the 2008 global financial crisis. Now, during the Covid-19 crisis, it is again used as the tool to help lower waged workers.

The government announced a massive $48b injection, almost the equivalent of a full year’s national expense to help Singapore fight this war against Covid-19.

Lower-wage workers, including self-employed ones, will get a $3,000 cash payout under the Workfare Income Supplement scheme, Deputy Prime Minister Heng Swee Keat said yesterday.

This is an enhancement of the one-off special cash payment amounting to 20 per cent of their payout last year, with a minimum payout of $100, which he announced during his Budget speech last month.

Workfare is targeted at Singaporean workers whose earnings are in the bottom 20 per cent with some support for those slightly above, through Central Provident Fund top-ups and cash payouts. To qualify for the scheme, citizens must be 35 and older and earn a gross monthly income of not more than $2,300, among other criteria.

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