Personal responsibility is 'cornerstone' of social compact even with unemployment benefits, says Tan See Leng

SINGAPORE: Singaporeans believe that personal responsibility should continue to be a cornerstone in the country's social compact, even after unemployment benefits are set to be introduced for the first time, Manpower Minister Tan See Leng said on Monday (Sep 9).

Under the new SkillsFuture Jobseeker Support scheme, Singapore will hand out up to S$6,000 (US$4,600) over six months to those who are involuntarily unemployed, such as through retrenchment.

The scheme starts in April 2025 for eligible Singaporeans, and in the first quarter of 2026 for eligible permanent residents.

The scheme was announced by Prime Minister Lawrence Wong at his first National Day Rally in August. Dr Tan described the move as a "paradigm shift" when he responded to questions on the scheme in parliament on Monday.

"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," said the minister.

"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 benefits."

Dr Tan said this was why the government searched for "a better alternative, to minimise the negative outcomes that we have seen elsewhere".

"Our objective is to support involuntarily unemployed individuals 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," he said, adding that the government will also support them through employment facilitation and training programmes.

DECIDING WHO QUALIFIES

Members of Parliament asked about the rationale behind the scheme, in particularly how the eligibility criteria was designed.

Only those aged 21 and above who previously earned up to S$5,000 a month on average will qualify for jobseeker support. The recipient must also live in a property with an annual value of S$25,000 or less.

He or she must have become unemployed due to involuntary reasons like retrenchment, cessation of business, dismissals or termination due to an illness, injury or accident.

The person must have been employed for at least six months in the past 12 months before applying for the scheme, and must not have received a payout under the scheme in the past three years.

Those receiving payouts also have to engage in job search and related activities that will help secure employment, with more details of this still to be released.

Up to S$6,000 in payouts will be given in a tiered system, starting at a maximum of S$1,500 in the first month and declining subsequently.

This is to provide greater upfront assurance to jobseekers, and incentivise them to start work earlier if they find a job with a good fit, said Dr Tan.

Dr Tan said the scheme targeted lower- to middle-income workers who are more likely to face some financial pressure, and that the income level of S$5,000 was slightly above the median monthly income of resident workers.

With this income criterion, the scheme will benefit more than 60 per cent of Singapore residents who are involuntarily unemployed.

The annual property value threshold of S$25,000 is also aligned with other schemes such as the GST Voucher scheme and covers about 75 per cent of residences, including all public housing, he said.

Applications will undergo automated checks using available government data and further verification by a dedicated team in Workforce Singapore. Appeals will be assessed on a case-by-case basis.

Non-Constituency Member of Parliament Hazel Poa, of the Progress Singapore Party, asked why permanent residents were also eligible for the jobseeker support.

Dr Tan said this approach was no different from other employment facilitation programmes, such as career matching services and career conversion programmes by Workforce Singapore.

"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," said Dr Tan.

"But permanent residents 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."

Dr Tan said that the Jobseeker Support scheme "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 government policies, and just as importantly, a reset of Singaporeans' views and attitudes."

WHY NOW?

Noting that MPs have raised the idea of jobseeker assistance for many years, Mr Liang Eng Hwa (PAP-Bukit Panjang) asked why Singapore decided to introduce it now.

Dr Tan said the government spent a number of years studying and seeking feedback on the issue.

"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," he said.

"So, because of the multiple dialogues we've had, we've heard calls from Singaporeans for greater assurance in dealing with involuntary job loss."

Labour MP Patrick Tay (PAP-Pioneer) noted that professionals, managers, executives and technicians (PMETs) are increasingly affected by retrenchments.

Out of 14,590 employees retrenched in Singapore last year, 11,030 were PMETs.

Mr Tay, who is assistant secretary-general in the National Trades Union Congress, asked how the government would ensure that financially strapped PMETs are not left out of support, given the S$5,000 income threshold.

The minister reiterated that the starting point for the scheme was to support lower- to middle-income workers likely to face more financial pressures.

He said some PMETs who earn more may still face financial pressures, but they have a longer runway and "slightly better buffer" compared to other workers.

He added that the Jobseeker Support scheme will cost over S$200 million a year, funded through the "government operating budget", and that the ministry will continue to review its parameters.

Mr Tay also asked how the government planned to ensure that employers do not take advantage of the new support scheme to roll back their existing retrenchment benefits.

Dr Tan said the tripartite partners would have to work closely to make sure that employers' actions do not go against "the spirit of wanting to help our workers to bounce back", and to ensure fair treatment for all workers.