Tan Kin Lian - Perspectives Unemployment support
Deputy prime minister Lawrence Wong wants to provide "appropriate size unemployment support" under the SkillsFuture scheme. I wish him all the best in navigating through this scheme and in looking for a way to prevent the support from being abused. 

I wish to offer him another avenue, which will have a lower risk of abuse.  

1. Allow the retrenched workers, as certified by their previous employer, to apply for a monthly sum to be withdrawn from their CPF savings. This monthly sum could be 70% of the previous monthly salary, subject to a cap (say $3,000).

2. If the worker does not have any savings in the CPF to meet the monthly withdrawal, the CPF balance will become negative and will attract negative interest.  The negative balance is subject to a cap of say, $50,000. If there is a negative balance, it will have to be repaid from CPF contributions in the future. 

The unemployed member is taking out money from his own CPF account (or taking out a loan from the CPF), so he or she is not enjoying any unemployment benefit (at the expense of the taxpayer). There is less need to worry about abuse of the benefits. 

There is a risk that the worker may not have sufficient savings for retirement. This is a separate problem that has to be addressed separately. In this case, the worker (with insufficient savings) should be allowed to do light work, for up to 4 hours a day, and earn an adequate hour rate, say $12 an hour, for their sustenance. Maybe, the government can work on a better scheme that the scheme that I had proposed. 

The government will still face the risk that the workers with negative CPF balance will not be able to repay the balance during their lifetime. In this case, the amount can be written off on their death. It will be a small sum anyway.

Tan Kin Lian 
 

 

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