Mr Speaker: Mr Yip Hon Weng.
Mr Yip Hon Weng (Yio Chu Kang): 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?
Dr Tan See Leng: 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.
Mr Speaker: Mr Patrick Tay.
Mr Patrick Tay Teck Guan (Pioneer): 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?
Dr Tan See Leng: 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.
Mr Speaker: Mr Gerald Giam.
Mr Gerald Giam Yean Song (Aljunied): 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.
Dr Tan See Leng: 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.
