The Workfare Income Supplement Scheme (WIS) is one of several government initiatives designed to help older lower income workers.
Its sister scheme, Workforce Training Support Scheme (WTS), is aimed at reskilling older workers.
If you’ve never had to use these schemes, consider yourself lucky or at least young enough to not have to worry about wrinkles and backaches. And if you have or will be eligible to benefit from the WIS and WTS, it’s good to know what you’re entitled to.
In 2020, the WIS is going through some major changes.
Here’s what to expect.
Who is eligible for the Workfare Income Supplement Scheme?
To qualify for the Workfare Income Supplement Scheme, you have to fulfil ALL of the following criteria:
- Be a Singapore Citizen
- Be 35 years old or above on 31 December of the work year OR have a disability
- Earn a gross monthly income of not more than $2,300 for the month worked
However, if any one of the following applies to you, you will not qualify for the WIS:
- You live in a property with an annual value of more than $13,000 as of 31 December the year before
- You own two or more properties
- You are married and you own two or more properties together with your spouse
- You are married and your spouse’s income was more than $70,000 in the preceding year
The recent changes announced during Budget 2019 have made it easier to qualify for WIS by raising the minimum monthly income from $2,000 to $2,300. So, if you were not receiving WIS payouts before, you might now be eligible in 2020.
How much are WIS payouts?
Workfare Income Supplement Scheme enables eligible Singaporeans to receive payouts. Basically, you get money from the government to supplement your salary.
Payout amounts are calculated based on age and salary. The older you are and the lower your salary, the more money you will receive from WIS.
The recent changes have raised the minimum annual payout amounts by $200 to $400.
Here are the maximum WIS payouts you can receive per year from 2020 onwards if you fulfill the eligibility criteria listed above:
|35 to 44 years old or persons with disabilities under 35||$1,700 per year||$1,133 per year|
|45 to 54 years old||$2,500 per year||$1,667 per year|
|55 to 59 years old||$3,300 per year||$2,200 per year|
|60 and above||$4,000 per year||$2,667 per year|
|% in cash and CPF contributions||40% cash, 60% CPF contributions||10% cash, 90% Medisave account|
|When will you get the money?||Monthly||Annually|
|What should you do?||Nothing. Your WIS eligibility will be automatically assessed based on your employer’s CPS contributions.||Declare your income to IRAS, pay your income taxes and make the required MediSave contributions. You will then receive your WIS payout in the next year if you are eligible.|
As you can see, there are some differences between self-employed and employed individuals. One important difference is that self-employed individuals get most of their payments paid into the Medisave account. It seems to be aimed at buffering for medical needs in the future.
Presumably, employed individuals already have CPF contributions so their MediSave account would already have amounts stashed away for future medical expenditure.
How do you receive WIS payments?
The cash portion of your Workfare Income Supplement Scheme payouts will be transferred to your bank account. Remember to update your bank details with your SingPass. Receiving your money by bank deposit will enable you to get your hands on the cash up to two weeks earlier.
If you really don’t have a bank account, you’ll receive a cheque in the mail.
The CPF portion of your WIS payouts will be deposited directly into your CPF account(s).
Workfare Training Support Scheme
The Workforce Training Support Scheme (WTS) is WIS’ sister scheme that aims to help older low income workers upgrade their skills. It is hoped that this training will help to raise wages.
Here are some of the ways WTS can help:
- Subsidised course fees: You (or your employer if they are paying) can receive up to 95% off your course fees as well as a training allowance.
- Training commitment award: Receive up to $400 a year if you complete the required training modules.
Now, if you’re eligible for WIS, you’re probably also eligible for WTS. However, the aim of WTS is to help you to raise your wages by learning new skills.
The WIS payouts are viewed as a temporary solution until, thanks to the training received through WTS, you eventually earn higher wages and therefore no longer need to rely on WIS or WTS.
Singapore’s alternative to a minimum wage
The Workfare initiatives have been touted by critics as a more effective alternative to a minimum wage. Instead of forcing employers to pay more for workers no matter what their job scope, the schemes aim to selectively help those in low-paying jobs supplement their incomes and upskill in order to be able to command higher salaries.
That being said, Workfare is actually quite costly for the government. According to a recent report, $5.5 billion worth of WIS payouts have been paid out over the past ten years.
But Workfare is still less costly than implementing a minimum wage. Due to the lack of a minimum wage, businesses are still able on foreign workers, and the government earns more through foreign worker levies than their Workfare expenditure.
There are, of course, other questions such as the ethical conundrum regarding the use of foreign labour and keeping wages below the poverty line. However, from a monetary perspective, the Workfare system is still, it seems, a more efficient use of the government’s reserves.
Do you have any questions about the Workfare Income Supplement Scheme? Ask away in the comments!