Basis of SkillsFuture Jobseeker Support Scheme and Considerations for Applications

Mr Kwek Hian Chuan Henry asked the Minister for Manpower whether recipients under the SkillsFuture Jobseeker Support scheme will benefit from other forms of short-term financial assistance from the Ministry of Social and Family Development or that provided at the constituency level.

Members have filed these Parliamentary Questions (PQs) relating to the SkillsFuture Jobseeker Support scheme. I will respond to these five questions together so that I can give and provide a more holistic reply.

Mr Liang Eng Hwa asked about the bases and the considerations in the design of the scheme. The Prime Minister and I have shared the Government’s considerations in designing the Jobseeker Support scheme. Let me reiterate the key points.

First, we wanted to create a better alternative to unemployment insurance. We have seen from other countries how unemployment insurance can make it more attractive for individuals to stay unemployed. We have also heard feedback from employers about rising business costs and we do not want employers to offset the costs of an insurance scheme by cutting wages or by stopping the practice of retrenchment benefit.

That is why we searched for a better alternative to minimise the negative outcomes that we have seen elsewhere. Our objective is to support involuntarily unemployed individuals to rebound into jobs that better match and fit their skills and experience, instead of rushing into ill-fitting jobs due to financial pressures.

But at the same time, from the Forward Singapore exercise, we have heard Singaporeans share that personal responsibility should remain a cornerstone in our social compact. Hence, the scheme should minimise the potential moral hazard by supporting jobseekers to regain employment and not continued unemployment. Jobseekers will need to play their part, to take responsibility for their actions and make an effort to bounce back into work. On the Government’s part, we will continue to strongly support jobseekers through employment facilitation and training programmes.

I will next answer questions on who will qualify for the Jobseeker Support scheme. To Ms Hazel Poa’s question, we have targeted the scheme at the lower- to-middle-income worker earning up to $5,000 per month before becoming involuntarily unemployed. This is slightly above the median monthly income of resident workers and it is the group that is more likely to face some financial pressures. With this income criterion, more than six in 10 residents who are involuntarily unemployed can benefit from the scheme.

Mr Yip Hon Weng asked how the condition “residing in a property with an annual value of $25,000” was determined. Annual value is used as a proxy to determine households’ wealth for various Government support schemes that provide higher benefits to individuals or households with lower means. The threshold of $25,000 for the Jobseeker Support scheme is aligned with other schemes, such as the Goods and Services Tax (GST) Voucher scheme. This covers about 75% of residential properties, including all Housing and Development Board (HDB) flats.

Mr Liang Eng Hwa asked how applicants’ eligibility will be assessed. All Jobseeker Support applications will be assessed via a system that comprises automated checks using available Government data and further verification checks done by a dedicated Workforce Singapore (WSG) team. For individuals who do not meet the eligibility criteria, appeals will be assessed on a case-by-case basis.

Ms Hazel Poa also asked why Permanent Residents (PRs) are eligible for the scheme alongside Singapore Citizens (SCs). This is no different from other employment facilitation programmes. For example, SCs and PRs receive the same support under WSG programmes, such as career matching services and Career Conversion Programmes.

I want to stress that Singaporeans will always be at the heart of Government policies, even while we welcome those who can commit and contribute to Singapore. Our citizens receive the most support and benefit in several areas, including housing, healthcare, education and parenthood. But PRs have expressed their commitment to Singapore and contribute to our strengths as a society and economy. So, likewise, we should also support our PRs who fall onto hard times to get into good jobs so that they can support themselves and contribute to our economy.

I will now move on to questions about the payouts. The payout quantum of up to $6,000 over six months is provided to eligible applicants who have demonstrated active job search efforts. Ms Hazel Poa asked why the payments are stepped down with time. We have designed the payout schedule to provide a higher payout in the earlier months to provide greater upfront assurance to jobseekers. These payouts are gradually reduced from the second month onwards to incentivise jobseekers to start work earlier if they find and land on a good-fitting job. We do not want them to delay their return into the workforce as it will diminish their employability. In addition, as the scheme is designed to encourage individuals to find a job with good fit and be retained in the job, those who have received payouts will not be able to make another application within three years of their last payout.

I must emphasise that the total payout of up to $6,000 should not be viewed in isolation. It actually complements the Government’s broader ecosystem of support.

Mr Henry Kwek had asked about whether beneficiaries of the scheme can also benefit from other financial assistance schemes. The answer is yes. While the Jobseeker Support scheme is not designed as a form of social assistance for households with greater financial needs, beneficiaries are still entitled to receive support from the Government’s social assistance schemes where eligible, such as ComCare Short-to-Medium Term Assistance and the GST Voucher scheme.

Similarly to Mr Gan Thiam Poh's question, beneficiaries of the Jobseeker Support scheme can concurrently qualify for the SkillsFuture Level-Up Programme that supports mid-career individuals to pursue substantive upskilling and reskilling, as long as they meet the eligibility criteria for all of these respective schemes. So, we encourage jobseekers to actively explore ways to upskill, to reskill themselves to bounce back into better jobs.

To conclude, Mr Speaker, Sir, the Jobseeker Support scheme marks a paradigm shift for the Government and it reflects our commitment that we will always help and provide resources for those who step up and want to do more for themselves. The Prime Minister had said that a major reset is needed as we chart Singapore's way forward.

This is a reset in the Government's policies and, just as importantly, a reset of Singaporeans' views and attitudes. We will regularly review the scheme to ensure that we provide necessary support to the involuntarily unemployed.

Mr Speaker, there are two supplementary questions for the Minister. Sir, for many years, the People's Action Party (PAP) Members of Parliament (MPs) and the Labour Movement have asked for support assistance for the jobseekers. I remember even during my first term as an MP in this House, this was also raised. So, I am glad that the Government has finally made the move. Can I ask the Minister, why now?

The second question is: under this scheme, the criteria have been tightly structured, such as with the salary cap of $5,000, the annual value of not more than $25,000, the financial relief is also for a maximum of six months. So, can I ask the Minister how the Ministry determines the sufficiency of this scheme to help jobseekers and whether it will achieve the outcomes that we have set out to achieve?

I thank Mr Liang Eng Hwa for his two supplementary questions. Why is the scheme being introduced now? We started looking at it a number of years ago and, as a result of our Forward Singapore conversations, we have also sought feedback from many of our fellow Singaporeans on the design of the scheme. We have also learnt from many other countries, in terms of their own unemployment benefits for their respective citizens. And we eventually sized up the Jobseeker Support scheme, which is really about also renewing and refreshing the social compact. If we look ahead, the pace of change and disruptions will only accelerate. We may see a higher incidence of job displacements due to factors beyond an individual's control and even as they build their career health.

So, because of the multiple dialogues we have had, we have heard calls from Singaporeans for greater assurance in dealing with involuntary job loss. So, the reset, as I have mentioned, is now. The scheme marks a paradigm shift for the Government. We have taken the time to study the scheme carefully to ensure that we avoid the pitfalls seen in unemployment insurance schemes overseas where it can lull individuals into a false sense of security by making it more attractive for them to stay unemployed. We took in the different feedback from our tripartite partners, businesses and the public in the eventual design of the scheme. And having said that, our assurance is that we will continue to review the parameters of the scheme. In our sizing of this scheme itself, we have targeted the scheme at the lower- to middle-income worker earning up to $5,000 per month. Our median monthly wage is about $4,500-plus.

So, we have sized it for the lower- to middle-income worker earning up to $5,000 per month before becoming involuntarily unemployed. So, this is sized at just above the median monthly income of resident workers, as this is the group that is more likely to face some financial pressure.

We also used the annual value of residential property as a proxy to determine households' wealth because this is, again, similar to other Government support schemes that provide higher benefits to individuals or households with lower means. This threshold of $25,000 for the Jobseeker Support scheme is aligned with other schemes, such as the GST Voucher scheme, and it covers about 75% of residential properties, including all HDB flats. And as I have said, for the six-month duration of payouts, we think it provides sufficient assurance for jobseekers to find good fitting jobs and at the same time, it encourages them to re-enter the workforce in a timely manner.

So, this is the first step. I want to reiterate that we will regularly review the scheme to ensure that we provide the necessary and needed support for the involuntarily unemployed residents.

Mr Speaker, I thank the Minister for his response. I appreciate the design of the SkillsFuture Jobseeker Support scheme as our people need not pay an insurance premium to benefit from it. I also note that many Singaporeans have family members who are PRs and they will benefit.

I would like to ask a supplementary question. Notwithstanding the fact that we have to tightly control the criteria as we roll this landmark programme out, can the Government consider appeals for Singaporeans in private estates, with deserving circumstances, such as those living in households with a low per capita income – large households, I mean – those with limited housing equity and those who do not own the private housing that they live in?

I thank Mr Henry Kwek for his supplementary questions. I want to reassure the Member that we will consider individuals who do not meet the eligibility criteria on a case-by-case basis. The first part on eligibility checks, as I have shared earlier on, based on whatever Government data we have, will be automatic. But for those who want to appeal, we will consider them on a case-by-case basis.

I thank the Minister for answering my PQ. I have a couple of follow-up questions. The Minister has said that in this case, they have decided to extend the same benefits to PRs and SCs and quoted a few examples where it is also same benefits for both groups. But at the same time, we do have schemes that differentiate between these two groups. So, how does the Government decide which scheme will give the same benefits for SCs and PRs and which will be differentiated?

Secondly, it is about the requirement that the applicant must not have received this assistance in the past three years. In certain industries, where the pace of change and disruption is more frequent, the workers in those industries may experience retrenchment more frequently than those in other industries. So, would the Minister also consider this on a case-by-case basis?

I thank Ms Hazel Poa for her supplementary questions. For her first point on PRs receiving similar treatment and quantum of benefits as SCs, I hope that the Member appreciates the fact that this is a Jobseeker Support scheme. It is to incentivise the jobseeker to actively go for interviews, update their resumes and go for courses to upgrade themselves to get employed back into the workforce. So, in such circumstance, PRs can receive the same treatment and quantum of benefits because such schemes, if we support them, it will enable them to stay employable and continue to contribute to Singapore economically. And it also encourages the individuals to take responsibility for their own retirement adequacy and their own income security and, with them gainfully employed, ultimately, we hope that they will also not burden the rest of us as a society.

For the three-year window, this is to nudge and encourage our jobseekers to use this Jobseeker Support scheme to find better fitting jobs, and not rush into an ill-fitting job so as to get retrenched, displaced or unemployed within a short period of time. But having said that, exactly to Ms Poa's point, the pace of disruptions and change, indeed, they are both accelerating. For those who are involuntarily unemployed as a result of circumstances beyond their control, we are prepared to look at it on a case-by-case basis. I hope that addresses the Member's concerns.

Mr Speaker, I thank the Minister for his response. In instances where recipients of the SkillsFuture Jobseeker Support scheme may face immediate financial difficulties, why did the Ministry decide not to streamline short-term financial support with the scheme? Also, will the Ministry of Manpower (MOM) work with the Ministry of Social and Family Development (MSF) and the SSOs to process the Jobseeker Support scheme together with other financial assistance schemes?

I thank Mr Yip Hon Weng for his supplementary question. As I have alluded to, the Jobseeker Support scheme is not a social assistance scheme. It is meant to nudge our residents towards a positive behaviour of ensuring that they continue not to be disenfranchised, but to actively seek out a job. And this sits on top of other social assistance schemes that are administered by MSF and a host of other agencies that the Government has.

On top of that, for residents who are mature workers aged 40 and above, who are already on the SkillsFuture Level-Up Programme, this sits on top of it. Perhaps I can use this as an illustration. For a mature worker who is now undergoing the SkillsFuture Level-Up course, the training allowance cap is up to $3,000 per month. If he is drawing a salary of $5,000 and he is on this SkillsFuture Level-Up course, he draws an allowance of $2,500 a month.

If he gets involuntarily unemployed, the Jobseeker Support scheme will be eligible for him. So, over that six-month horizon, he could, on top of getting up to $6,000 from the Jobseeker Support scheme, he could add on another $2,500 times six months, which is about $15,000 of the SkillsFuture Level-Up training allowance. And that comes up to an amount of up to, potentially, $21,000 over the six-month period. I wanted to give that archetype to illustrate to Mr Yip the potential amounts that an actively engaged mature jobseeker who is also upgrading himself will be able to access via these grants from the Government.

Sir, I would like to thank the Prime Minister and the Minister, as well as the MOM officers for coming up with this scheme on hearing the National Trades Union Congress and Labour Movement's call to introduce some form of unemployment support for our workers. Just two supplementary questions. Firstly, if Members could look at the last couple of years of labour market reports, particularly the last five years, I think more and more of those affected by retrenchments and involuntary unemployment are professionals, managers and executives (PMEs). So, therefore, my point is, now that we have set the $5,000 and the annual value of $25,000, how can MOM ensure that these PMEs, if they are really financially strapped, are not left out and will be able to bounce back and go into the next job.

The second supplementary question is with regard to the JobSeeker Support Scheme, whether MOM will have some form of monitoring and enforcement to make sure that employers who already currently provide retrenchment benefits in severance packages in their employment contracts or even in their collective agreements, do not exploit this scheme and, therefore, cut back or reduce those other payments?

I thank Mr Patrick Tay for the supplementary question. We acknowledge many Members in the House for putting up the scheme. I was looking back at all the notes, I think it went back to as early as 2014, about a decade ago. So, thank you to many of our labour MPs and Members of this House, some of whom are not here. There was a Mr Azmoon Ahmad, from before, who also proposed the scheme. And I want to thank them for proposing this.

Indeed, when we sized up the scheme, we wanted to try to reach out to the lower- and middle-income group. We acknowledged the fact that the scheme does not cover everyone. But for starters, when we sized this to go up to just slightly above median, that means up to the $5,000 mark, it would reach and it would benefit about six in 10 workers who are involuntarily unemployed.

We will continue to refine the scheme. Our starting point is to try to support the lower- and middle-income workers, who may face more financial pressures. While we acknowledge that some PMETs at the higher level could also face pressures as well, given their runway, given the buffer that they have, for a start, I think that they have a slightly better buffer compared to this group of lower- and middle-income workers.

So, we want to make sure that the scheme gets off to a good footing. This will already cost us about $200 million a year to continue to run this. Like I said, we will continue to review it and to see how we can be even more sensitive to the needs of more workers.

With regard to the Member's second point about how we ensure that employers do not then roll back or dial back on the retrenchment benefit, we have to work very closely with the Labour Movement and with our tripartite partners to make sure that this is not against the spirit of wanting to help our workers to bounce back. The good momentum that we have achieved thus far, in ensuring that there is a fair treatment for all workers, will continue to be honoured and followed through. I hope that addresses the Member's question.

Thank you, Mr Speaker. Sir, I understand the SkillsFuture JobSeeker Support Scheme is expected to cost $200 million yearly. How will this be funded? For example, will any tax increases be needed for this? Did the Government consider making this an unemployment insurance scheme so that it is more fiscally sustainable over the long term? That is what the Workers' Party (WP) proposed in our version of the redundancy insurance scheme.

I want to reiterate that this is not an unemployment insurance scheme. So, it is very different from what the WP has suggested. We have undergone numerous dialogues. We have engaged businesses. We have engaged employers. We have also taken feedback from our workers.

The feedback that we have obtained is that there are cost pressures that are experienced by businesses and workers wanting to be able to have more take-home earnings. So, when we looked at the entire landscape and we also studied other countries' experiences, for a start, we felt that this is the most nuanced way forward – with the Government taking the burden of providing these jobseekers, who actively want to look for jobs, with the assistance to tide them over this particular period.

The way the scheme has been sized up, 60% of the involuntarily unemployed workers will benefit. Today, about close to 60% of workers get back into a job within six months of being involuntarily unemployed. With the scheme, we believe that an even higher proportion of workers will be able to benefit and get back into a good job faster.

How is this going to be funded? It will be funded through the Government operating budget. Depending on how the scheme continues to evolve, we will continue to review the parameters to make sure that it supports and it is sensitive to the needs of residents who are involuntarily unemployed.