Platform or gig workers aged below 30 years will be required to make increased CPF contributions when the changes are implemented. The changes are expected to take place from the second half of 2024 at the earliest. The move is optional for older gig workers.
This will enable younger gig workers to be better equipped to purchase homes and make their retirement plans in the long term, says Finance Minister Lawrence Wong during his Budget 2023 speech.
The government will align their CPF contribution rates with those of regular employers and employees over a period of five years, Wong adds.
Regular employees aged 55 years and below are required to contribute 20% of their salary to their CPF accounts while employers will contribute 17% towards their employees’ CPF accounts.
Meanwhile, gig workers are required to contribute up to 10.5% of their income to their CPF Medisave accounts. However, they, along with the platform companies, are not obliged to contribute to their CPF Ordinary or Special accounts.
In the short-term, Wong notes that the increased contributions will reduce the workers’ take-home pay. As such, additional support will be given to help lower-income platform workers who earn $2,500 or less a month. This will come in the form of the CPF Transition Support, which will offset part of the increased CPF contributions.
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More details will come following the Ministry of Manpower’s Committee of Supply debate.
CPF adjustments for older workers
CPF adjustments will also be made for older workers, announced Wong.
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Moving forward, the government will increase the CPF monthly payout for seniors on the retirement sum scheme to $350 from $250 previously.
The government will also be raising the CPF monthly salary ceiling to $8,000 in 2026 from $6,000, to keep pace with rising salaries. The move will help middle-income Singaporeans save more for their retirement, says Wong. The CPF salary ceiling was last raised in 2016, he notes.
The increase in 2026 will phase in increases over four years starting from 2023 to allow employees and employers to adjust to the changes.
