Workfare Income Supplement (WIS) Scheme
Central Provident Fund Board

The Problem

In the last 47 years since independence, Singapore has enjoyed prosperity and economic growth. It has grown from a US$500 per capita economy to that of US$30,000.

Being a small country without any natural resources, Singapore must continue to keep our economy open and competitive. However, globalisation has intensified competition resulting in a widening wage gap. Countries like China, India, Russia and Eastern Europe had doubled the global workforce, putting downward pressure on wages everywhere. At the same time, technological advent increased the demand for workers with high skills and knowledge, and made low-skilled workers redundant as it was easy for their jobs to be exported abroad to where wages were lower. Older low-wage workers (LWWs) who found it harder to learn new skills and upgrade themselves, and to get re-employed should they lose their jobs faced wage stagnation and structural unemployment. Among all types of workers, they were the most vulnerable to the challenges of globalisation. In fact, the lowest 20% of households had seen their incomes per capita declined in real terms between Year 2000 and 2005.

There was a pressing need to find creative ways to promote equity and help low-wage and vulnerable Singaporeans to progress together with the rest of the society. In 2007, the Government responded to the problem by introducing the Workfare Income Supplement (WIS) Scheme. The WIS aims to encourage regular and productive work by supplementing the income and retirement savings of older LWWs.

Instead of the common notion of welfare transfers, the WIS was an alternative concept that emphasised “helping citizens help themselves” and thus offered a new redistributive solution for Singapore in tackling the widening income problem. It achieved a redistributive effect while encouraging workers to work and upgrade themselves to meet the demands of a globalised economy.

Since its introduction in 2007, the WIS scheme had been responsive to public needs. In 2008 and 2009, a Workfare Special Payment was given on top of the regular WIS, to enable LWWs to cope with the economic recession. In 2010, the WIS scheme was enhanced to enable more workers to benefit through higher payments. In addition, a new component of Workfare was introduced to encourage LWWs to train and upgrade their skills so that they can earn more. In 2011, a Workfare Special Bonus was given on top of the regular WIS to enable LWWs to share in the fruits of the country’s economic growth. In 2012, the WIS was extended to cover other vulnerable groups like workers with permanent disabilities who are aged below 35 years. The frequency of WIS payments was also increased from twice a year to 4 times a year to help LWWs cope with daily expenses.

Solution and Key Benefits

 What is the initiative about? (the solution)
The WIS scheme was introduced in 2007 to help maintain Singapore’s social compact by supplementing the incomes of older and lower-wage Singaporeans, who are vulnerable to wage stagnation. It also has the objectives of encouraging them to find and stay in work and building up their retirement savings. To qualify for WIS, one must be a Singapore citizen, aged 35 or above, earn an average gross monthly salary of up to $1,700, work at least 2 months in any 3-month period and live in a property with an Annual Value not exceeding $13,000, which covers all public housing.

The principal target group of the scheme are older full-time workers aged 45 and above, who are in the bottom 20% of income earners. To smoothen out the transition, WIS benefits are also extended at lower rates to those aged 35 and above, as well as to those who earn slightly higher than the 20th-percentile income. The amount of WIS varies according to age and income, and eligible workers could expect to receive up to $2,800 in WIS each year. Employees whose employers make monthly contributions to the Central Provident Fund (CPF) on their behalf would receive their WIS on a quarterly basis, while self-employed persons (SEPs) who declare their income and contribute to CPF annually would receive their WIS once a year. The amount receivable by a SEP is two-third that of an employee of the same age and earning the same income. CPF is Singapore’s national social security savings plan to help working Singaporeans save for their retirement, healthcare and housing needs through regular contributions.

The impact of the WIS is notable - The WIS was successful in supplementing the incomes of LWWs, with around 440,000 LWWs expected to receive more than $450 million in WIS for work done in 2012. WIS and other Government taxes and transfers have also contributed to a reduction in income equality, as evident in the reduction in Singapore’s Gini coefficient which decreased from 0.469 in 2007 to 0.452 in 2011.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
The Ministry of Manpower (MOM) conceived the WIS scheme, setting out the scheme’s eligibility criteria to target LWWs who are aged above 35 years. They are means-tested and the WIS amounts are differentiated to ensure that the lower-income and older groups would receive more.

The CPF Board implemented the WIS scheme. CPF Board obtained data from different agencies including the Ministry of Home Affairs (MHA)/Immigration & Checkpoint Authority (ICA), the Inland Revenue Authority of Singapore (IRAS) and the Housing Development Board (HDB), tested the integrity of the data and accuracy of the allotment. The management of the data had to be done under strict privacy conditions. CPF Board then had to ensure that all eligible recipients received their WIS in their bank accounts or through cheques according to published service standards. Thus far, some S$2.1 billion has been accurately disbursed to LWWs.

LWWs who attended training at courses approved by the Singapore Workforce Development Agency (WDA) would be eligible to receive additional cash. CPF Board received training information from 50 training providers through WDA to allot eligible recipients with additional cash. Thus far, some S$17 million has been accurately disbursed to LWWs.

In terms of outreach, stakeholders include the community grassroots leaders, unions and VWOs and government agencies that CPF Board worked with the reach out to LWWs.

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The CPF Board adopted a three-pronged strategy of value creation in service delivery, particularly in (1) Transforming Administration (2) Public Accountability (3) Publicity and Outreach, in the successful implementation of the WIS Scheme

(1) Transforming administration - Increasing efficiency
The citizen-government transaction was transformed to increase the reach of the scheme to the populace. In the past, income redistribution schemes with cash disbursements to the populace involved massive sign-up exercises. To achieve a quantum leap in service delivery, sign-up requirements were removed for the WIS scheme so that eligible citizens would automatically receive WIS in their personal bank accounts/ CPF accounts if they meet eligibility criteria. This could be achieved because of a high degree of inter-agency collaboration in the Singapore’s public service.

CPF Board obtained data from 7 different government agencies to build up a database of workers’ profiles to determine the eligible cohort. To further identify LWWs, CPF Board obtained wage data for two main groups; employees and self-employed persons (SEPs). For employees, wage information was derived from the CPF contributions made by employers to CPF Board. For the SEPs, the information was obtained from the Inland Revenue Authority of Singapore. This efficient network of inter-agency link-ups effectively eliminated the need for sign-ups. LWWs who meet eligibility criteria would then automatically receive WIS payments in their personal bank accounts/ cheques and CPF accounts.

After each round of payments, individual notifications were sent to update recipients of the payment details which served to promote transparency in the administration of WIS. CPF Board had also simplified the notifications and introduced cartoon illustrations to help LWWs better understand their WIS benefits.

(2) Public accountability - Improving access and promoting equity
There has been widespread publicity on the features of the WIS. Information and FAQs were published in the mass media, website and printed in easy to read brochures placed at Community Centres (CCs), Community Development Councils (CDCs), Continuing Education Training Centres (CETs) and Singapore Post (SingPost) branches nationwide.

To ensure fairness in treatment and clear public accountability, the government devised and documented detailed appeal guidelines covering a comprehensive set of scenarios. Replies to FAQs and service standards for government replies were posted on the website to provide transparency and accountability. Service Centers across the nations were established to handle on-the-spot cases.

(3) Publicity and outreach to vulnerable groups – Promoting partnerships
CPF Board also devised targeted outreach programmes so that no Singaporean would miss out on the scheme. To extend its reach to LWWs, it worked with a network of partner agencies that have extensive interface with LWWs. They included the National Trades Union Congress – Unit for Casual and Contract Workers, Voluntary Welfare Organisations (Chinese Development Assistance Council and Mendaki), CCs and CDCs.

Singaporeans were very impressed with the administration, delivery and accountability of the WIS scheme. For its collaboration with unions and VWOs, CPF Board won the National Trade Union Congress partnership award in 2011.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
The key implementation dates are as follows:
- Feb 2007: Announcement of the WIS scheme in Singapore Budget 2007.
- Aug 2007: Letters sent to 170,000 low-wage SEPs reminding them to declare their income and contribute to Medisave so they could qualify for WIS. CPF Board also implemented link-up with SingPost to offer SEPs a one-stop income declaration and Medisave contribution service and advisory at any of its 62 branches located nationwide.
- 1 Jan 2008: First WIS payment to LWWs who had worked in 2007.
- Jan-Apr 2008: Intensive outreach activities (road shows) carried out at around 20 community centres to encourage SEPs to declare their income and contribute to Medisave to qualify for WIS.
- Feb 2009: Announcement of the one-off Workfare Special Payment (WSP) to WIS recipients to provide additional help during the economic downturn. WSP was paid in 2009 and 2010.
- Feb 2010: Announcement of the outcome of the first comprehensive WIS review. Changes were made to the WIS payment quantum (maximum amount increased from $2,400 to $2,800) and qualifying monthly income ceiling (from $1,500 to $1,700). The Workfare Training Support (WTS) scheme was also introduced to encourage LWWs to upgrade their skills and graduate from low-wage employment. One of the 3 components of the WTS scheme, the Training Commitment Award (TCA), would be given to WIS recipients to encourage them to undergo and complete training.
- Feb 2011: Announcement of the one-off Workfare Special Bonus (WSB) to WIS recipients to recognize their contributions to Singapore’s economic growth. WSB would be paid in 2011, 2012 and 2013.
- Feb 2012: Announcement of the increase in WIS payment frequency from twice-yearly to quarterly for employees.
- Jun 2012: First quarterly WIS payment made to eligible employees who had worked in Jan-Mar 2012.
- Sep 2012: First WIS payment to persons with disabilities.

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
Despite widely publishing the WIS scheme in the mass media, website, individualized letters and printed brochures, there were segments of the population (e.g. less educated , non IT savvy, elderly) who remained unaware of the scheme. A survey conducted by the Institute of Policy Studies in 2010 found that less than half of those with household income of less than $1,999 felt the positive impact from Government’s initiatives such as WIS.

To reach out to the LWWs, CPF Board partnered community groups to conduct targeted outreach activities which involved face to face interactions to explain WIS. Yearly, CPF Board conducted over 30 roadshows / door-to-door visit exercises reaching out to 10,000 LWWs. In communicating features of the scheme, CPF Board simplified the messages, using vernacular languages, cartoons and graphics in printed letters/collaterals to aid understanding. CPF Board also improved the way it deliver WIS messages and created a skit to convey WIS messages through the lighthearted and humorous banter between the skit characters. The 10-minute skit, which was performed in vernacular languages and dialects, raised real life issues that LWWs could relate to. The skit was performed by CPF Board staff at community events held in the heartlands, thereby allowing CPF Board to more effectively reach out to its target group of older LWWs.

The success of the outreach activities was overwhelming. The innovative outreach efforts, especially the skit performances in communities, received positive feedback from both the public and media. There was also extensive media coverage in the form of 20 newspaper articles and 15 TV/radio broadcasts. The media praised the CPF Board for its innovative communication efforts. Singaporeans who were interviewed by the media commented that the skit presentation was entertaining, appropriate and communicated the key WIS messages clearly. Please refer to the following for an extract of a media report and public feedback on the effectiveness of the skit:

- Lianhe Zaobao, 16 August 2010:
With their humorous skit explaining the Workfare Income Supplement (WIS) scheme, the CPF Board’s “Banana Sisters” made their debut on the getai stage last night to a warm reception by the audience. The older audience members were absorbed in the skit, trying to understand how the characters received WIS payouts from the Government.

The skit’s message was simple: elderly Singaporeans earning less than $1,700 a month will receive Government payouts so long as they have a job and contribute regularly to their CPF account. Mr Xiao Lianglin, aged 60, pointed out that only through such methods will older Singaporeans understand the WIS. Mr Li Xiujin, aged 70, said he had received flyers from the CPF Board explaining the WIS, but he did not really understand them. He said the skit is clearer and less complicated.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
Payment System & Facilities: A robust IT system was developed to accurately determine the WIS amount for each Singaporean. Data which were received from the different government agencies were received by a single agency, tested and checked to ensure the integrity of the data and accuracy of the allotment. Thus far S$2.1 billion has been accurately disbursed to citizens. In all, a core and lean team of 47 officers see to the disbursement of more than $450 million in WIS to around 440,000 LWWs each year.

Excellent and Accessible Service: CPF Board provided service to the public through its 5 Service Centres and single, dedicated hotline. The team of 20 Customers Service Executives successfully handled an average of 19,000 walk-in customers and 53,000 calls a year. WIS advisory services are provided at 62 SingPost branch offices located nationwide, serving a total of 20,000 LWWs annually.

Handling of enquiries and appeals within service standards: On average, 1,800 e-mails and written enquiries were each replied to within published service standards of 2 working days, while 3,200 appeals were each handled within 10 working days each year.

All in all, the administration of the WIS scheme is highly efficient and sustainable. The administrative cost per WIS recipient is S$22.50 – merely 2% of the total WIS amount disbursed.

Key benefits:
Targeted Benefits. WIS was well targeted, supplementing 10% of the incomes of around 440,000 Singaporeans every year. About $450m of WIS is disbursed each year which works out to be an average of $1,090 per worker. 80% of recipients are aged 45 and above with a mean monthly income is $1,059. About three-quarters of recipients are cleaners, labourers, service/sales workers or plant/machine operators. Two-thirds have primary education or less. Government transfers also had a redistributive effect on household income. WIS had also contributed to a reduction in income equality, as evident in the reduction in Singapore’s Gini coefficient which decreased from 0.469 in 2007 to 0.452 in 2011.

Encouraging Work. A study was conducted in 2009 showed that there was a positive impact on employment levels. The changes raised employment levels on average by about 15,000 among workers aged 35-65, which was approximately 1.2% of the workforce aged 35-65 in 2007. The positive employment effect was larger for older workers. The study also showed that the changes encouraged workers to work more. The period worked increased on average by about 1 man-day per worker, corresponding to about 700,000 additional man-days or a 0.2% increase per year in the working population that are aged 35-65.

Promoting Equity and Social Inclusion. The collaborative outreach efforts resulted in 76,000 informal workers coming into the CPF net, of which 14,000 qualified for WIS. CPF Board's collaboration with partners in the social sector paid off – with about 5,000 prisoners and workers with disabilities qualifying for WIS yearly. For SEPs, the number receiving WIS increased sharply from 74,000 when the scheme was introduced in 2007 to the current figure of 88,000.

Sustainability and Transferability

  Is the initiative sustainable and transferable?
Many other developed countries have addressed the problems of the low-income group often through extensive social welfare programmes. But welfare has drained fiscal resources and, more damagingly, eroded the work ethic and encouraged an entitlement mentality. WIS has been specially designed to incentivise LWWs to work. It seeks to supplement the incomes of LWWs on the principle that the best way to help people is to help them find work and stay in work. In so doing, it achieved a redistributive effect while encouraging workers to work and upgrade themselves to meet the demands of a globalised economy.

It took several months of collaboration across the various agencies to integrate the different types of data and processes, to build and maintain the database of LWWs. The most important criteria during the planning process were efficiency, equity and accuracy, and complying with data-confidentiality rules. This tight inter-agency collaboration eliminated the need for Singaporeans to sign up for the scheme, and transformed the way the Government typically transacts with the citizens for national payouts initiatives. The WIS system has become a model to follow for other redistributive schemes targeted at LWWs.

The administration of the WIS scheme is also highly efficient and sustainable. The administrative cost per WIS recipient is S$22.50 – merely 2% of the total WIS amount disbursed. The system is cost effective, robust and highly scalable – evident by the regular improvements made to the scheme over the years. Agencies like the Ministry of Finance (MOF) and Singapore Workforce Development Agency (WDA) have also tapped on the WIS infrastructure and collaborative network to roll out related schemes like the Workfare Special Bonus and Workfare Training Support schemes that are targeted at LWWs.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
First, in making payouts on a national scale, there is the need to minimise the need for individuals to sign up. For WIS, CPF Board had in fact eliminated the need for sign-ups as it could pull data from various government agencies and also tapped on CPF Board’s existing collection and income declaration infrastructure to automatically assess and make WIS payment to LWWs. This had revolutionized the way the Government typically transacts with citizens for national payouts, reduced potential wastage, generated public sector efficiencies and established closer inter-agency collaboration platforms.

Second, that WIS, which is premised on the principle that the best way to help people is to help them find work and stay in work, may be the more sustainable measure to address the problems of the low-income group, as compared to the social welfare approach adopted by many developed countries. Although the concept of wage supplements was new to Singapore, it had been tried with some success in other countries like the US and UK with their Earned Income Tax Credit and Working Tax Credit schemes respectively that act like negative income tax which would add to the earned income of LWWs. Although these schemes had helped to reduce poverty and encourage work, they were not cheap and might potentially weaken the incentive for LWWs to upgrade themselves and earn more. Hence, CPF Board and MOM considered the design of the WIS scheme very carefully and came up with a unique version of redistributing benefits that is financially sustainable, and which would not erode the work ethic.

Third, targeted outreach programmes are crucial to reach out to LWWs. Traditional modes of public education may not be sufficient to reach out to large segments of LWWs who are illiterate and not IT savvy. So reaching out to them would require close collaboration with community partners like grassroots organisations, trade unions and VWOs with more interactions with LWWs, which was key to increasing the number of WIS recipients. The Government should engage these organisations at an early stage in the system design to encourage buy-in and provide sufficient time for the organisation of outreach activities.

Fourth, the way the Government communicates policies and schemes has to be simple and easy to understand. Instead of just relying on conventional media platforms and printed communications, the Government could explore unconventional ways such as acting and the use of cartoons and colloquial dialogues to communicate key messages. It can even tap on cultural norms and vernacular languages to aid public understanding of government schemes. The success of CPF Board's WIS communication innovations have shown how effective this is in reaching out to vulnerable groups like the LWWs.

Contact Information

Institution Name:   Central Provident Fund Board
Institution Type:   Government Agency  
Contact Person:   Maple, Suet Yeng Chang
Title:   Self-Employed & Workfare  
Telephone/ Fax:  
Institution's / Project's Website:  
Address:   79 Robinson Road #10-05, CPF Building
Postal Code:   068897
City:   Singapore
Country:   Singapore

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