Debated in Parliament on 16 Sep 2013.
Ms Lee Li Lian asked the Deputy Prime Minister and Minister for Finance with regard to the cash component of the GST Voucher (a) why is the Assessable Income (AI) of $24,000 used as a threshold for eligibility; (b) whether the Ministry plans to review this threshold in light of inflation and, if so, when; and (c) whether basic annual salary instead of AI can be used to determine eligibility.
Mdm Speaker, the GST Voucher helps lower- and middle-income Singaporeans with their costs of living. It comprises three components: cash, MediSave and U-Save.
Of these three components, the GST Voucher – Cash is targeted at those who are less well-off and who require the most help in meeting immediate needs. We have used, as an eligibility criterion, an Assessable Income threshold
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of $24,000 as this covers the bottom 40% of Singaporean workers. It also covers those who do not earn an income, such as housewives and retirees.
It is appropriate for a nation-wide scheme like the GST Voucher that we use Assessable Income instead of basic annual salary as a measure of how well-off a person is. Assessable Income includes other forms of income from employment, such as allowances, bonuses and commissions, which can be significant sources of earnings in certain jobs. It also includes other income, such as rental income. It is fair and transparent that these sources of income are counted in. If instead we use basic annual salary, as Ms Lee Li Lian suggests, those who are well-off because they earn large commissions or bonuses will also benefit from the GST Voucher – Cash.
We, therefore, use Assessable Income as the criterion. The Assessable Income threshold is reviewed every year, and our reviews will take into account changes in incomes, to ensure that we continue to target those who need the most help.
Mdm Speaker, I thank the Senior Minister of State for the reply. I have one supplementary question: whether the Ministry can consider, as I have mentioned earlier in my PQ, using basic salary instead of Assessable Income, with the provision that the Assessable Income is not more than a certain number of times of the basic salary, since allowances make up a substantial portion of low-income workers' pay. As such, they may inadvertently be left out of the scheme. For the Ministry's consideration, please.
Mdm Speaker, I thought I should perhaps point out that of the three components of the GST Voucher, only the GST Voucher – Cash uses Assessable Income as a criterion. GSTV – U-Save and GSTV – Medisave, in fact, do not use Assessable Income.
Also, in addition to the GST Voucher, there were other types of assistance in this year's Budget. For example, HDB households were eligible to receive Service and Conservancy Charges rebates. Individuals could also receive Medisave top-ups or benefit from enhancements to the Workfare Income Supplement. And Singaporeans who need additional assistance could also turn to the Community Development Councils to tap on other schemes available.
Nonetheless, I would like to thank Ms Lee for her suggestion and it is something that we will look at when we review the Assessable Income
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threshold.
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