Model ID: 4fd52c6b-6ec5-491e-af4e-6424dfff603d
Sitecore Context Id: 4fd52c6b-6ec5-491e-af4e-6424dfff603d;
Introduction
Mr Speaker, the Bill before us today seeks to amend the Central Provident Fund Act with the key objectives of: (a) making it easier for members to receive retirement payouts; (b) making it easier for members to build up their retirement nest egg; and (c) to streamline the CPF system.
These are all laudable objectives, consistent with the overarching mission of the CPF, which is “to enable Singaporeans to have a secure retirement, through lifelong income, healthcare financing and home financing.”
While I am fully supportive of the amendments, I have the following questions from an employment perspective for the Minister.
Queries / Clarifications regarding the CAYE Scheme
The “Contribute-As-You-Earn” Scheme (the “CAYE Scheme”) helps self-employed persons (“SEPs”) contribute to their MediSave as they earn. Under the CAYE scheme, government agencies will deduct and transmit a portion of payment due to SEPs into their respective MediSave accounts, for convenience. At present, the CAYE Scheme is only applicable to public sector contracts.
Expansion of CAYE scheme to private sector
First, I understand that take-up of the CAYE in the public sector is very encouraging. In view of that, would the CAYE scheme be expanded to include the private sector? If so, does MOM foresee any resistance from the private sector? How else may the CAYE scheme be expanded to help freelancers?
If expanded, it would help more freelancers (particularly those who render services to companies in the private sector) keep up with their Medisave contributions and provide greater financial protection against health issues.
Possible exemptions under the CAYE scheme
Second, under the CAYE scheme for government projects, the Government essentially deducts a portion of monies due to the SEPs and transmits it to the SEPs’ Medisave Accounts.
As this House would know, the COVID-19 pandemic has had a decimating effect on the lives and livelihoods of SEPs. With the circuit breaker measures that were implemented last year, together with the existing restrictions on social gatherings, the events and performing arts sector has almost come to a standstill. Their current earnings are a far cry from their earnings prior to the pandemic.
In view of the above, would there be possible circumstances in which SEPs can opt-out from the CAYE Scheme, as they may need the monies to tide through this rough patch? If so, what are some examples of such circumstances?
Additional CPF contributions from the service buyers (similar to employer’s CPF contributions)
Third, in the context of employment relationships, both the employers and employees make CPF contributions. Even as the distinction between SEPs and employees is increasingly blurred, with some countries recognising SEPs as “workers”, perhaps service buyers could be required to make CPF contributions for SEPs too?
To be clear, the existing CAYE scheme (applicable in the public sector only), requires the Government to take a portion of the fees belonging to the SEP, to be credited to the SEP’s Medisave account. What I am proposing is one step further – that the service buyers (from both the public sector and private sector) make additional contributions to the SEP’s CPF account; which mirrors the employer’s CPF contributions under normal employment relationships.
If accepted, this would mean that practically, service buyers would be making CPF contributions consisting of both the SEP’s portion (under the existing CAYE scheme), as well as additional sums being the service buyer’s contributions too.
Conclusion
Sir, notwithstanding my clarifications and suggestions, I stand in support of the Bill.
