9 September 2024
Senior Minister of State for Manpower Dr Koh Poh Koon announced details on measures to strengthen protections for Platform Workers on 9 September 2024, including CPF-related changes to improve their housing and retirement adequacy. These protections will be implemented from 1 January 2025.
Here is a summary of the changes:
1. CPF contribution rates for Platform Workers and Platform Operators will be gradually increased to match that for employees and employers.
With the CPF contributions from Platform Operators, Platform Workers will see an overall increase in their CPF savings. These CPF contributions will go to Platform Workers’ Ordinary, Special and MediSave Accounts on a monthly basis, and will help Platform Workers to achieve the same level of housing and retirement adequacy as employees who earn the same amount. The CPF contribution rates for Platform Workers and Platform Operators will be gradually increased over five years, by up to 2.5%-pt per year and up to 3.5%-pt per year respectively.
2. Increased CPF contributions will be mandatory for Platform Workers born on or after 1 January 1995. Older workers can choose to opt in.
- Younger Platform Workers have a greater need for CPF contributions because of housing needs and can benefit more from the compounding interest given their longer runway for accumulation.
- Older Platform Workers born before 1 January 1995 can choose to opt in to the increased CPF contributions, as they may have existing plans to finance their housing and retirement needs. Platform Workers who wish to opt in can do so via the CPF website from November 2024 and the decision cannot be reversed. Platform Workers are encouraged to opt in early for a longer runway to benefit from the power of compounding and boost CPF savings. These savings can be used for housing and retirement needs.
- Older Platform Workers who do not opt in will continue to be required to make CPF MediSave contributions, and will not receive the Platform Operators’ share of CPF contributions.
3. Enhanced Platform Workers CPF Transition Support
- The Platform Workers CPF Transition Support (PCTS) was first announced in 2023 to ease the impact on lower-income Platform Workers’ take-home pay during the increase in CPF contribution rates from 2025 to 2028. PCTS provides monthly cash support to lower-income Platform Workers to offset part of the additional contributions they make to their CPF Ordinary and Special Accounts. Platform Workers need not apply for PCTS as their eligibility will be assessed automatically.
- The PCTS will be enhanced as follows:
- Increased offset rate – The enhanced PCTS will offset 100% of the eligible Platform Worker’s share of increase in CPF Ordinary and Special Account contributions in 2025, up from the 75% offset earlier announced. This means the Government will pay fully for the increase in eligible Platform Workers’ CPF contributions in 2025. The offset for 2026 will also be increased to 75%, from the 50% offset earlier announced.
- Raised qualifying monthly income cap from $2,500 to $3,000 (after deduction of expenses, including both platform work and other employment income sources). This means more lower-income Platform Workers can benefit from the scheme.
4. Enhanced Workfare Income Supplement
- Platform Workers eligible for Workfare Income Supplement (WIS) payments will receive the payments monthly instead of annually from March 2025. Platform Workers need not apply for WIS as their eligibility will be assessed automatically.
- With effect from 2029, for eligible Platform Workers whose CPF contribution rates are aligned to that of employees, their WIS payments will be increased to the same payment amounts and cash-to-CPF ratio as for employees.
5. Application of Fixed Expense Deduction Amount in the computation of CPF contributions
- A Fixed Expense Deduction Amount (FEDA) will be applied to all Platform Workers’ gross earnings to derive Platform Workers’ net earnings (i.e. gross earnings minus the FEDA). The FEDA depends on Platform Workers’ mode of transport, and reflects expenses for the majority of Platform Workers. The use of FEDA will remove administrative hassle for Platform Workers and Platform Operators to manually track Platform Workers’ monthly expenses.
- The Platform Operator’s and Platform Worker’s CPF contributions will be computed based on the Platform Worker’s net earnings from each platform each month, subject to an annual earnings ceiling of $102,000 which also applies to employees.
6. Collection of CPF contributions
- Like employers, Platform Operators will contribute both the Platform Operator’s and Platform Worker’s share of contributions to CPF Board monthly. Platform Operators will deduct the Platform Worker’s share of CPF contribution from Platform Workers’ earnings as and when they earn.
- This will also apply for Platform Workers who do not opt in to the increased CPF contributions. Their MediSave contributions will similarly be deducted by Platform Operators.
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CPF contributions for Platform Workers