We all know the importance of the Central Provident Fund (CPF)—it is a part of our retirement savings and also help to fund our healthcare and housing needs.
When we turn 55, the money from the ordinary account and special account will go towards the retirement sum.
In Singapore, it is mandatory for regular employees to contribute 20 per cent of their income to their CPF and their employers will contribute 17 per cent.
However, self-employed people— which includes cabbies, private-hire drivers, and freelance delivery workers do not have such benefits. These groups of people only need to contribute about 8 to 10.5 per cent of their income to their MediSave accounts.
That might change soon.
Proposal to Protect Gig Workers Like Food Delivery Riders Would Involve CPF
A committee will be releasing its recommendations for these groups of people next week, after over a year of consultations and considerations.
It will most likely take at least one year before specific measures are fully implemented.
The advisory committee has been suggesting that platform workers need more CPF contributions to ensure they have enough savings for housing and retirement.
“Our recommendation is that platform workers should also have access to CPF, which is Singapore’s proposition for retirement and housing adequacy… What we are recommending is to step up to the next level, which is the ordinary and special accounts,” said Ms Goh Swee Chen, the advisory committee chairperson.
However, a recent survey of 1,002 food delivery riders by the Institute of Policy Studies said that there is an equal amount of workers who do and do not support compulsory CPF contributions.
After all, 20 per cent is a lot of money.
Reasons for Taking a Long Time to Reach a Decision
The advisory committee reached out to over 20,000 platform workers and spoke to about 2,700 businesses and consumers who use these platforms.
This was the main reason why it took so long to release its report as they are focusing on the quality of the engagements.
“This is a very complex piece of work. The workers in this space are very diverse, from the very young to the very old, to those who work many hours to those who do it very casually,” said Dr Koh, an adviser to the Advisory Committee on Platform Workers.
Challenges of New Implementations
Dr Koh said that there will be some challenges as the details are slowly being ironed out. There may be a need to pass new laws or amend existing laws around CPF and work injury compensation, which needs to be approved by the Parliament.
Other concerns include the cost of the new recommendations and the timing of these proposals, especially when inflation is high.
“Consumers may have to pay a little bit more… But companies also do their part,” he said.
Ms Goh said the committee has put in a proposal to the Government to consider providing support during the transition period.
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Featured Image: Dr David Sing / Shutterstock.com
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