Singapore aims to strengthen social welfare for the elderly

Global Business

Singapore 2015 budget will focus on building the nation’s future according to governmental officials. The budget aims to strengthen social welfare, especially for the elderly.
CCTV’s Miro Lu filed this report from Singapore.

Singapore aims to strengthen social welfare for the elderly

Singapore aims to strengthen social welfare for the elderly

Singapore 2015 budget will focus on building the nation's future according to governmental officials. The budget aims to strengthen social welfare, especially for the elderly. CCTV's Miro Lu filed this report from Singapore.

Uncle Pang Thim Fatt is 64 years old. He has lost his job in the shipping industry and then as an electrician to foreign and younger workers over the years. Now he cleans dishes in a Japanese restaurant. He works 10 hours a day and six days a week. He makes 2100 Singapore dollars, or $1,500, per month. He says he is considered poor in Southeast Asia’s wealthiest country.

“Actually it (my income) is below the average income of Singaporean, 2000 dollars. The average is 3000 something,” said Pang Thim Fatt.

The budget Singapore government announced earlier this week aims to help elderly workers like Uncle Pang. Key measures include increasing contribution and paying more interest to old workers’ pension savings, locally known as CPF. But Uncle Pang says although the benefits are appreciated, they are not enough for him to stop working.

Singapore’s employment rate for people above 60 is among the highest of all OECD nations. The government has made it mandatory for companies to offer three more years of work to those turning the official retirement age of 62. The push to hire older workers follows an attempt to increase the population through immigration, a policy that caused a public backlash as the arrival of migrants pushed up property prices and strained public transport.

“We have scarce resources in terms of housing, medical, transportation and so forth. So if you keep on having this inflow of so called low cost foreign labor, it’s not sustainable. So there has to be a shift towards actually looking at how we can leverage more on older workers,” said Faizal Bin Yahya, Research Fellow at the Institute of Policy Studies.

Even working past the age of 65 has now become commonplace in Singapore. In 2013, 40 percent of Singapore’s elderly population aged 65 to 69 was in the labor force, compared to less than half of that figure a decade ago. As Singaporeans live longer, more and more of them expect shortfalls in their retirement savings.

“Our government wants the older people to be financially independent. That is why you can’t withdraw your CPF in one go. Nowadays people live longer. If you withdraw all your life savings at 55 years old and spend them all, who is going to look after you when you are old said 67-year-old Tan Chiw Eyeng.

In the latest budget, Singapore government says it will raise income tax for the top earners and give cash payouts to the poorest seniors. As Singapore deals with a rapidly-ageing population, the city-state is trying to strike a balance between a western-style welfare system and a Hong Kong-like low interest rate competitive economic model.