Reducing Foreign Domestic Worker Levy

Er Dr Lee Bee Wah asked the Acting Minister for Manpower (a) whether the Ministry will consider reducing the foreign domestic worker levy to help families cope with the higher cost of hiring these helpers; and (b) which countries are the Government exploring for additional supply of domestic helpers to work in Singapore.

Mdm Speaker, recognising that foreign domestic workers (FDWs) play an important role in meeting the domestic needs of families, we introduced, in 2004, an FDW concessionary levy of $250 per month to help families with elderly members or young children who hire foreign domestic workers. This concessionary levy rate was subsequently reduced in 2005 and again in 2007, and the concessionary levy was also extended in 2007 to families with disabled persons. The current FDW concessionary levy rate is $170 per month which is significantly less than the regular rate of $265. To provide more support to families who need to care for frail elderly or persons with disability, MSF has also given a $120 FDW Caregiver Grant per month to households with a per capita monthly income of up to $2,200. This is over and above the FDW levy concession for households with elderly. Foreign domestic worker employers who qualify for the levy concession and the FDW Caregiver Grant would effectively be paying $50 levy.

Today, close to two thirds of the families that employ FDWs already enjoy the concessionary levy rate. We are considering more support for families who hire FDWs for their caregiving needs.

For the second part of the question, there are currently over 10 approved sources for FDWs, including Indonesia, Philippines, India, Sri Lanka and Thailand. We will be conducting a pilot to study the suitability of Cambodia as a source country for FDWs. This pilot arose from MOM's periodic review of the adequacy of existing sources and the options of suitable alternatives based on market demand and feedback from employment agencies.

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Mdm Speaker, I would like to thank the Member for the supplementary question. We do agree that the challenges can be quite acute for low-income families, especially when they do have frail elderly to look after. That is why MSF has included a new grant. Eventually, for those fulfilling the various criteria, they are essentially paying $50 in levy. One of the challenges we have in managing this space is we recognise that there are needs in terms of helping families look after young children as well as, increasingly, the elderly. I think a lot of our elderly are healthy but at some point, sometimes, they may become frail and we need to extend our support.

What we also need to manage with the levy system is to manage the demand. There may also be other families who may not necessarily need the FDWs, but if you excessively reduce the levies, that would have an impact. It is a balance. That is why we established certain criteria to support those families in need. We will continue to review this. If there are specific concerns, those families can surface their issues to their respective Advisors and we can take these up accordingly.

Mdm Speaker, my supplementary question is whether the Ministry can look at the qualification or the eligibility of the FDW Levy Concession for Persons with Disabilities (PWDs) Scheme. It is currently based on three of the five Activities for Daily Living (ADLs). Can the Ministry look at reducing the number of ADLs? Not being able to do just one of the ADLs is already tough for financially-challenged families to cope with care-giving. So, I hope the Ministry can look into it.

Mdm Speaker, these policies are not static. Clearly, we will review these from time to time. If the Members have specific concerns with regard to which of the ADLs, we could specifically look at that again and to assess the situation. We will be happy to review it on a needs basis. We understand that ultimately, there will need to be some definitive criteria to manage this space, but we will continue to take on feedback and, if need be, we

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will revise them accordingly.

I wish to ask the Minister a supplementary question. What the Minister mentioned that the caregiver grant is only useful when the family is able to afford in hiring a domestic maid. For those families which are from the low-income bracket, the family member may have to give up the job to look after the elderly sick. So, I would like to ask the Minister to consider a caregiver's allowance to help such families.

Mdm Speaker, we will be quite happy to follow up with the Member in terms of the specifics of his suggestions. We will take a look at that accordingly.