In a bid to address the inadequacies of the CPF system for retirement, Manpower Minister Lim Swee Say delayed the official Retirement Age further to 67 years old from 65. Effective 1 July 2017, companies which re-employ elderly workers will only get a 3% wage subsidies for workers aged 67 and above, under the revised Special Employment Credit scheme.
The new law will save the Singapore government an estimated few millions in spending. Employers will also be more likely to retrench elderly workers. MP Jessica Tan questioned Minister Lim Swee Say why is the Retirement Age not abolished but the Minister responded saying this could actually be worse for workers as it means that companies can terminate their employees’ services earlier. However Minister Lim Swee Say did not explain further how he arrived to his reversed-logic conclusion.
Over S$22 million were paid to more than 49,000 employers who employed about 110,000 older Singaporeans aged 65 years and above, for work done in the first half of 2015. Most Singaporean retirees are still working despite their ailing health due to their low income. The typical Singaporean elderly earns about S$1,000 a month working 44 hours a week, and the most common employment are manual work like cleaning and security guard. Those who are unemployable would often collect cardboard to feed themselves.
With this new move, the CPF Life payout age will also likely increase from 65 to 67 years old as the CPF board follows the Manpower Ministry’s Retirement Age.