Silver Support Scheme is first step to a minimum pension guarantee

IN the 2015 Budget, the government introduced a major policy to address retirement adequacy: the Silver Support Scheme, a permanent programme that will provide payments of up to S$750 per quarter to needy seniors throughout their retirement. In recent years, several major measures - such as the WIS Scheme, CPF Life, and the GST Voucher scheme - have steadily provided greater support for low-income Singaporeans at different stages of life. The Silver Support Scheme further enhances social protection for low-income Singaporeans by sharing the burden of retirement with the rest of society.

While many Singaporeans welcome these measures, others may be concerned at the apparent weakening of the principle of personal responsibility. Can Singapore avoid the worst excesses of the "welfare state", characterised by high taxes and a low incentive for work? Although there are real trade-offs between social protection and personal incentives, greater provision of social welfare does not contradict personal responsibility. Rather, social welfare systems can be designed to strengthen society by protecting individuals against risks that are difficult to address using market systems alone.

Adhering strictly to an ethos of personal responsibility leaves individuals poorly equipped to protect themselves against many basic risks of life. For example, we can, and should, aim to save adequately for our retirement. But most Singaporeans would not have enough for their retirement if they lived much longer than expected, or if standards (and costs) of living were to rise significantly after their retirement. Likewise, we can lead a healthy lifestyle, but the healthiest person can still be a victim of a catastrophic accident, or be diagnosed with a serious disease.