The Worker’s Party (WP) in its recent proposal, presented its Redundancy Insurance (RI) scheme to the public which is said to ease the financial pressure on workers who are made redundant, aiming to provide them with a longer runway to find suitable re-employment and to minimise the toll of unemployment on the health and well-being of their families.
It said that contrary to popular belief, unemployment insurance (UI) and unemployment benefits (UB) are not confined to Western countries. Around the world, UI and UB schemes can be either taxpayer funded or based on an employee-employer funded insurance model.
WP wrote that a sub-set of those who are unemployed are those who have become unemployed not through resignation but termination, redundancy or retrenchment. This is the normal constituency addressed by UI or UB schemes globally.
The RI proposal aims to generate risk pooling to reduce the financial pressure on workers who are made redundant, so as to provide them with a longer runway to become re-employed and thus to minimise the harmful effects of a spell of unemployment. It also seeks to reduce insecurity and worry among the vast majority of employed Singaporeans.
In the event of involuntary unemployment, the worker will receive a payout of 40% of his or her last drawn salary (up to a monthly cap of 40% of the prevailing median wage) for up to six months.
The RI scheme will also provide top-ups to workers who earn less than $1,000 a month. Workers who earned less than $500 a month before they were made redundant will receive RI payouts equivalent to their previous monthly salary (e.g. a worker who previously earned $250 a month will receive $250 a month for up to six months under the RI scheme, instead of $100). Workers who earned between $500 and $1,000 a month before they were made redundant will receive a top-up of $200 to their original RI payout (e.g. a worker who previously earned $750 a month will receive $500 in monthly RI payouts instead of $300).
Click here for the full proposal
However, citizens split on two sides on this proposed scheme. Some agreed with what the Party proposed. While some do not.
Here are what those who agreed said:
- Loo Liat Lang wrote, “It’s a good suggestion. There are many families that live by the monthly pay cheque. But I feel that there is a lot more to just retrenchments. Pte Ltd coys would transfer funds out of the company somehow and wind down the coy leaving the workers stranded without pay. I believe there needs to be one more component to review pte ltd coy liabilities to workers which include forced liquidating an amount of the assets of owners to pay the workers or even units the coy owe if possible. Because its a chain reaction. Just my opinion.”
- Huiwen Leong wrote, “It’s actually a decent proposal. I did a simple math calculation based on some of their statistics (e.g unemployment rate, redundant rate etc) which I give them the benefit of the doubt and the result was more or less accurate. They also took the administration costs in consideration. They also highlighted well the downsides of this proposal and pointed out that the numbers they used were more conservative (0.1% is on the low side) for the sake of a start. Taking this concession into consideration, the proposal seems sustainable for at least the near future. A proposal is not a plan for implementation. It need not be perfect, just to proof feasibility. The proposal can always be improved if a flaw is found. And this one is pretty decent.”
- Allan Tan wrote, “Interesting proposal. It should be carefully examined and debated on its viability. Hopefully the government will not simply sweep it aside.”
- Isaac Tan wrote, “Good idea, but can be risky if many people gets retrenched at the same time. Can be pool of money sustain it? Is the risk of many people getting retrenched higher than many people claiming for health-related insurance?”
- Joseph Tan wrote, “If the Government can collect GST ERP COE etc why not another of this. After all it is being used in good faith, and we know where these monies go to unlike those unknown. Good suggestion.”
- Jhonny Wee Lain Seng wrote, “A honest Workers’ Party proposal. Parliament should consider and accept Workers’ Party healthy constructive proposal, for the benefit for workers in Singapore.”
- JF Gary Tom wrote, “This is a first proposal which provides one who has lost his job with monetary help, which is also a physical help that is needed, directly and immediately help those who’ve lost their jobs.”
- Jimmy Tng wrote, “A responsible government should approach this problem at the upstream. That is to provide support for the business’s to help them remain competitive and sustainable. That way we keep retrenchment figures down.
Addressing this downstream is just not going to be effective and frankly much more expensive. Addressing the consequences of retrenchment is never going to better than preventing it in the first place.”
- Terence Koh wrote, “A good proposal for the well-being of our people. Sad to see some people run it down very fast though. Perhaps, this proposal should only apply to low to middle income bracket, with the low income getting a bit more. The high earners should not qualify. A good constructive proposal but need to relook who we should give & who should not (ie high earners).”
While, those who disagree wrote:
- Sing Kieng Ong wrote, “Most companies have retrenchment benefits, to go ahead with this idea will generate a lot of messy works which will achieve nothing in the end!”
- Jason Tan wrote, “I wonder is this some form of tax that WP is proposing? What happened to those who are not being retrench, they also need to pay? What about companies because of bad economic situation that have to be shut down and need to retrench a big group of employees, who will make the payout? I also wonder with the “premium” so low, would any insurance company underwrite this? It would be good to have something like this in place, but as typical WP proposal, they usually lack detail.”
- David Lee wrote, “The first thought is how sustainable is this policy.. Can it last over time? And then next is feasibility. Assuming that the logistical nightmarish details are settled, then what if it is a recession when there are many workers retrenched. What if there is not enough money in the fund? How to pay? Who fork up the remainder?”
- Jason Chua Chin Seng, admin of Fabrication of PAP wrote, “Give you 6 month free salary. No need to work for 6 months. No need to look for a job for SIX months. So good right? But who pays? Eventually taxes will have to be raised. It is the taxpayers who will foot the bill. Typical of WP to take advantages of current economic situation to prey on the people’s fear to propose such populist policy at this time.”
- Des Soo wrote, “This is one policy I’d disagree (regardless if raised by opposition or PAP).
It’s a welfare similar to France/Europe. It’s not viable in the long run and another generation will have to pay the consequence. Companies ain’t paying for and neither am I. There are more efficient and cost-effective way to help them find jobs”
- Tan Hong Kwang wrote, “Who to monitor they are actively seeking employment? They can send out application letters but never turn up for interviews or reject the offers cos do not meet expectations then how. There would sure be people : let take monies and enjoy 6 months first. Next, who to foot to bills. Do not mind if from your pocket, since you always love to give carrots but never quote sources. There are already Social Service Office to render assistance and e2i and other employment agencies to assist so really do not understand why you want do duplicate work. We should help and encourage them quickly get a job or change mindset to seek employment at new area but not give carrots without telling how to monitor it and do double job and waste resources.”
- Linus Ng wrote, “Idea to explore but not wise to implement. There is already have a standard scheme or guide to follow. Some people may get more that what Mr Low proposed. But if state law, those people could get more will not be getting what they should. “People that get more, may be low income too” I think just keep this consideration by individual bosses.”
- David Tay wrote, “Rather than 6 months payout for nothing why not 3-6 months mandatory notice period so that the person who is going to be retrenched have some lead time to look for job or make adjustments.”
- Jamie Tan wrote, “So my Question to WP is with all these Singapore workers become less competitive versus the region and less MNC comes to Singapore to hire. WHAT will happen next? More get laid off and the benefits escalates? So how is this going to help Singapore and Singaporeans in the long run? Other then being the popular thing to say where raid the coffers and pay people money sound so nice. What is the long term sustainable plan?”
- Vince Ng wrote, “No one should need retrenchment insurance if they have good financial planning. If the situation is that they do not have financial planning then make the insurance benefit mandatory contribution like CPF.”
