The Singapore Democratic Party has announced a new proposal which seeks to guarantee a basic income of $500 a month for Singapore citizens aged 65 and older who are in the bottom 80 percent of wage earners.
The proposal which is entitled “Retirement Income Scheme for the Elderly” or “RISE”, will have a proposed sum of $500 to replace the amount that workers contribute to their retired parents’ monthly income.
The COVID-19 pandemic has made more obvious the problems faced by elderly, retirees and the financial burden placed on the younger working generations in Singapore, said SDP and added that such of this is the consequence of the PAP depriving the Singaporean retirees of their Central Provident Funds (CPF) savings.
The CPF, originally intended as a pension savings scheme, have been allowed to be used, among other things, to service housing loans and to pay for Medisave.
This has resulted in insufficient funds for retirement, said the party.
In addition, the funds have been withheld when a member turns 55, a breach of the original promise under the CPF Act.
A qualitative study, led by Assistant Professor Ng Kok Hoe from the Lee Kuan Yew School of Public Policy and included Associate Professor Teo You Yenn, head of sociology at Nanyang Technological University, noted that a Singaporean retiree needs $1,379 a month to meet basic living standards.
As a result, children and relatives of the elderly have to provide financial support.
The 2019 Household Expenditure Survey found that the working children of retiree households contribute nearly $500 per month towards their income. This contrasts with the average CPF payout of only $280 a month.
SDP said that such a situation places extra burden on the retirees’ children who are already under great financial pressure to take care of their own families, noting that it is clear that poverty among retirees is the result not so much through profligate spending or the negligence in financial planning but rather through the state siphoning off these funds.
The party lists three main advantages of RISE:
- Income of Singaporean retirees is guaranteed and stable which will give the elderly a peace of mind. At the moment, financial packages like the Pioneer and Merdeka Generation Packages ad hoc and do not allow for planning for the duration of one’s retirement years.
- It is paid to all poorer retirees unlike the PG and MG packages which are given only to certain cohorts of Singaporeans. Also, RISE is paid in ready cash whereas MG and PG packages come in the form of mainly Medisave top-ups.
- RISE will relieve working Singaporeans of the pressure from having to financially support their elderly parents.
“In the aftermath of the Covid-19 pandemic, it is important that our elderly continue to live in security, not poverty. And as mentioned, working adults, the sandwiched generation, should not be further burdened by having to take care of their children as well as retired parents.” said the party.
RISE is part of SDP’s campaign message in the coming Singapore General Election, 4Y1N: Four ‘YES’ to suspension of GST, retrenchment benefits, retirement income, putting people first and one ‘NO’ to a 10 million population.
SDP is looking to contest at least two Group Representation Constituencies (GRCs) and three Single-Member Constituencies (SMCs) which consist of 11 parliamentary seats.