By by Dark Matter, filed under Letters To TOC
When low-wage workers received their first ever Workfare Bonus in 2006, 10% of the Bonus went into their CPF Medisave account as stated by MOM:
Why must 10% of the bonus be credited into my Medisave Account?
“10% will be credited into your Medisave Accounts to help low wage workers build up their savings to take care of their healthcare needs. However, 90% of the bonus will be in cash to help participants meet their immediate needs.”
On Dec 23rd, a report Allocate more Workfare for Medisave, unionists wanted a bigger portion of the Workfare Bonus for low-wage workers to go into Medisave account instead of giving out to low-wage workers in cash.
Is the Medisave Account top-up appropriate
The Workfare Bonus is a good way to help low-wage workers to meet their immediate needs. However, raising the Medisave portion will hurt this objective as less cash will be in their hands to meet their immediate needs. On the other hand, whatever amount of Medisave top-up from the Workfare Bonus is likely to be too little to do any good in meeting workers’ long term healthcare needs and payment. The Medifund should be the primary source to help low-income families to pay for their medical bills.
It would benefit the low-wage workers more if the full amount of the Bonus is in cash for their immediate needs so long as they can depend on Medifund to address their Medisave shortfall.
Is healthcare insurance a good idea
There is a suggestion that workers can use the Workfare Bonus credited to Medisave Account to buy health insurance. This is an interesting idea that’s worth further consideration. If this suggestion is sound, the NTUC should push for a government sponsored health insurance scheme that extends the benefit from individual workers to all low-income families. The scheme could also address questions like:
1. Identifying the right health insurance policy.
2. Issue of premium rate hike and affordability as workers age.
3. Issue of workers unable to service the policy due to unemployment.
Can workers decide how to use their Workfare Bonus
When the government gave out Workfare Bonus in 2006, it acknowledged 4 income groups ranging from $400 and below to Above $1,200 to $1,500. Each income group received different amount of Workfare Bonus. This highlights the government’s understanding that different income groups have different immediate cash need. The workers know better what their needs are. The government should empower them and give them the option to decide how to use the full amount of the Bonus.