Central Provident Fund to be Made Mandatory for Delivery Riders in Singapore: A Commentary
A recent survey by the Institute of Policy Studies (IPS) recently revealed that 84% of platform workers are concerned about retirement savings. It is also discovered that the two major issues the workers are mostly concerned about are their current and future needs, especially saving for retirement and the lack of avenue for them to raise their concerns.
In an effort to address the issues, the government has come up with the idea to make it mandatory for these platform workers to pay Central Provident Fund (CPF), which is a shared fund that is contributed to by Singaporeans. It also provides payouts, such as medical, retirements and other benefits. Although more than 50% of platform workers believe that mandatory CPF contributions would help them in their retirement and housing needs, a great percentage of the platform workers, such as those employed by FoodPanda or Grab, are still against the idea. As noted by an article, the main reason that these delivery workers are not too keen on the idea of mandatory CPF contribution is that they don’t have a fixed monthly income, thus they are not able to have as much savings and there will be a notable reduction in their income.
Society can be illustrated as a contract, with that being said, you will have to give to society in order to receive from society. By not contributing to CPF, the delivery riders will actually miss out on potential benefits as mentioned above. By not contributing and not having sufficient coverage, this actually impacts the welfare system in Singapore, should the delivery rider fall critically ill or meet with an accident that stops them from working, as the Ministry of Social and Family Development (MSF) will then get involved. Although it should be noted that the riders who responded have their own insurance as well as accident insurance covered by the delivery platforms, the accident insurance may not be sufficient to cover long term chronic ailments that may stop the person from working. CPF can also be utilised for purchasing hospitalisation and other premiums in order to increase the coverage on the individual’s insurance.
While it can be noted that an individual’s salary might vary—similar to other self-employed individuals—CPF contributions are also not fixed since it is based on the percentage of salary. As for self employed individuals, they are expected to contribute a rate of between 4% to 10.5% maximum to their Medisave. This would also mean that they would not have sufficient CPF funds for retirement. This then results in a significant cost to the society and/or a reduced standard of care for people in these categories.
All in all, we believe that the current condition where CPF is still made voluntary would not be beneficial for delivery workers in the long run as such gig economy tends to be not sustainable. Therefore, government’s intervention is needed in making CPF contribution mandatory since in reality, delivery workers make irregular earnings. This condition makes it tough for the drivers to save up for their long term needs. This factor, combined with insufficient CPF contribution will surely threaten their future. By making the CPF contribution mandatory, not only that the drivers would be less worried about whether they will have enough for retirement, it will also allow them to plan for their future aspirations.