I have a confession to make. Before I became a parent, I did not pay much attention to the announcement of the annual Singapore Budget. Yes, I skimmed through it via the newspapers but I didn't really delve into the details.
And then the monkies came along. Perhaps it is the yearly anticipation of the goodies that the Budget dishes out that made me be more aware. After all, we parents could all do with some extra help (cash would be good) when it comes to raising our children in Singapore!
This year's Budget expectantly focused on the Pioneer Generation, which this batch of founding Singaporean thoroughly deserves. In fact, both my parents will benefit from the many initiatives that will be rolled out and I know that they are rather pleased with it.
But the two things that caught my attention from this year's Budget are the call for an increase in productivity in various sectors of the economy, as well as the increase in CPF contribution rates for older workers come 1 January 2015. The productivity issue is not a new one, and the NTUC has been a strong advocate of this for a long while, integrating it to a wage model unique to Singapore called the progressive wage model. I think workers in Singapore will definitely benefit from easier, smarter and safer ways of working.
On CPF changes, workers aged 50-55 will see the largest increase: 1% increase from Employers with a further 0.5% increase in contribution from themselves. Workers aged between 56 and 65 will enjoy a 0.5% increase in Employer's contribution. The increase in employer contribution rates will be allocated to the Special Account. The increase in employee contribution rates will be allocated to the Ordinary Account.
But that is not all. These increases are on top of the 1% increase in our Medisave contribution rates. That's right - every employee will see an increase of 1% to their Medisave Account from 1 January 2015, courtesy of their employer. So effectively, a worker aged between 50 and 55 will see a 2% rise in contribution to their CPF from his/her employer!
Personally, the increase in the Medisave contribution could not have been more timely. You see, back in 2008 my Dad had to undergo an emergency triple heart bypass. And I still vividly remember that moment when he was being wheeled into the operating theatre. It was probably the first time in my life that I saw fear in his eyes. I could sense he was genuinely afraid that he wouldn't be able to see us again. And as he faded out of sight, I could have sworn that those fears have slowly turned to tears.
Those fears could also have easily turned into tears for me too, especially when I saw the bill when he was finally discharged. Luckily though, I could utilise a fair chunk of both his and my Medisave account to foot the hospitalisation bill.
So it got me thinking - as our parents age, it is inevitable that they will have to visit the doctor at some point in time. And as their children who were lovingly brought up by them, it is only natural that we help them out financially when it comes to settling the hefty medical bills. But as a parent with young children, it can be pretty taxing financially too. So with the increase in Medisave contributions all around, we can do with whatever help that we can get. Not to mention that it will allow the older folks to be more independent in taking care of their medical fees too!
With Singaporeans entering the workforce, getting married and having children at a later age, the financial commitments of workers in their 50s today are akin to those of workers in their 40s in the past. Just think: a 35-year-old who has his/her first child will only see this child enter the university about 20 years later, when the parent is 55 years old. So it is all the more important that workers aged 50 and above are continued to be valued and not forgotten in our society. At the end of the day, all of us will reach that magical number 50 one day, no?
I have to admit though, that when I first read from the newspapers that NTUC’s Deputy Secretary-General, Mr. Heng Chee How had raised the issue of increasing the CPF contribution rates for older workers and some of the above points before the Budget, I did not think that it will happen so soon. But it did, and it shows that there is at least progression with regards to contribution for this age band.
With the increase in the contribution rates for workers aged between 50 and 55, there still remains a 2% difference between the rate for this cohort and those aged 50 and below. Which is still a rather large gap in my opinion. Of course, who would not argue with more? At least, I have read from newspaper reports that NTUC is still pushing more for full parity to be restored eventually. So hopefully in the years to come, this will happen. Because yes, I have a vested interest... considering I too will hit that magic number in 12 years time!