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All companies in Singapore which employ foreign workers will have to pay local workers at least the Local Qualifying Salary (LQS) of S$1,400 per month.

This announcement was made by Minister for Finance Lawrence Wong in his Budget 2022 speech in Parliament on Feb. 18.

As part of plans to renew and strengthen Singapore's social compact, one of the pillars the Government is focusing on is the country's workfare.

Uplifting lower-wage workers

According to Wong, Budget 2022 will help to uplift lower-wage workers in Singapore.

The progressive wage model (PWM) will be extended to the retail, food services, and waste management sectors in the next two years.

The PWM will also extend to in-house cleaners, security officers, landscape workers, administrators, and drivers across all sectors.

All companies in Singapore that employ foreign workers will also be required to pay all their local employees at least S$1,400 per month.

The Progressive Wage Mark (PW Mark) will also be launched to accredit companies that pay Progressive Wages and the LQS.

The Government will require all eligible suppliers to be accredited with the PW Mark from March 2023.

Introduction of Progressive Wage Credit Scheme

To allow firms to adjust to the changes and to provide support to them, the Government will introduce a Progressive Wage Credit Scheme (PWCS) with a S$2 billion injection this year.

Under PWCS, the Government will co-fund the wage increases of lower-wage workers between 2022 and 2026.

For workers earning up to S$2,500, the PWCS co-funding will be 50 per cent in the first two years, 30 per cent in the next two years, before tapering to 15 per cent in 2026.

The Government will also provide some support for workers earning above S$2,500 and up to S$3,000, at a lower co-funding ratio.

Workfare Income Supplement to be enhanced

To complement the progressive wage moves, the Government will enhance the Workfare Income Supplement.

From Jan. 1, 2023, the qualifying income cap will be increased from S$2,300 to S$2,500 per month.

A new minimum income criterion of S$500 per month will also be introduced to encourage part-timers and casual workers to work regularly or full-time.

Wong announced that the Workfare Income Supplement scheme would also be extended to younger workers aged 30 to 34.

They will receive a maximum annual payout of S$2,100.

Those aged 35 and above will also receive increased payouts.

Increased workfare payouts

Those aged 35 to 44 will receive a maximum annual payout of S$3,000.

Those aged 45 to 59 will receive a maximum annual payout of S$3,600.

And those aged 60 and above will receive the highest maximum payout tier of S$4,200 annually.

The Government will also extend this same maximum payout tier to all persons with disabilities (PwDs), regardless of their age.

S$9 billion in total

According to Wong, the Government will spend an average of S$1.8 billion per year in the next five years, or S$9 billion in total, for the PWCS and the enhanced Workfare.

The moves on Progressive Wages will cover around 94 per cent of Singapore's full-time lower-wage workers. At the same time, the enhanced Workfare is expected to benefit more than half a million workers in Singapore, Wong added.

Other moves

Retirement

Wong also announced that the Government will continue to increase the employer and employee CPF contribution rates for workers aged 55 to 70.

The CPF Basic Retirement Sum (BRS) will also be raised by 3.5 per cent for the next five cohorts turning 55 from 2023 to 2027.

Supporting PwDs

The Government will also continue to support PwDs by launching the Enabling Masterplan 2030.

This plan will support PwDs in areas like employment, lifelong learning, and respite care.

Boosting charity sector

The Government will also provide more support for the charity sector in Singapore by topping up S$100 million and extending its support for Tote Board's Enhanced Fund-Raising Programme for three years until the end FY2024.

In addition, a top-up of S$26 million will be given to the Charities Capability Fund for five years.

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