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Platform companies will be required to pay Central Provident Fund (CPF) contributions for Singaporean workers who are below 30 years old, Finance Minister and Deputy Prime Minister Lawrence Wong announced during his Budget 2023 statement on Feb. 14.
In addition, platform workers below 30 years old will also be required to make increased CPF contributions, he added.
The increase in CPF contribution will go into the CPF Ordinary and Special Accounts of the platform workers.
These changes are part of the recommendations that the government has accepted from the advisory committee on platform workers, one of which was to align the CPF contribution rates of such workers and companies with those of employees and employers over a period of five years.
The committee had been convened to look into strengthening protections for platform workers, including improving their housing and retirement adequacy.
Workers above 30 can opt in for the increased CPF contributions
With regard to older cohorts of platform workers, they can choose to opt in for the increased CPF contributions.
As for platform workers who are either above the age of 65 or earn S$50 to S$500 a month from platform work, they will not see an increase in their CPF contributions.
However, they will still be able to enjoy the CPF contributions of platform companies if they opt in.
For the cohort of workers in which the increased contributions are mandatory, along with those who opt in, these changes will boost their savings in their CPF Ordinary and Special Accounts (CPF-OSA), so that they have more for retirement and can finance their housing loans using CPF instead of cash, according to the Ministry of Finance (MOF).
Lower-income platform workers to receive additional support
Wong acknowledged that such a move will affect the take-home pay of platform workers in the short term.
Additional support for these workers will therefore be introduced in the form of the platform workers' CPF Transition Support (PCTS) for the first four years following the implementation of this measure.
According to MOF, the PCTS will offset part of the platform workers' share of the year-on-year increase in CPF-OSA contribution rates for these four years.
Singaporean platform workers who earn S$2,500 or less per month, including from platform work and other employment sources, will be eligible for this support measure if they are required to or opt in to make increased CPF contributions.
MOF added that more details about the PCTS will be announced at the Ministry of Manpower's Committee of Supply 2023.
Top collage's images via photo via Zye Hensem /Facebook, Petrina Ng/Facebook.