‘Not overly generous’ jobseeker support will mainly help the lower-income: observers

WITH upcoming support for the involuntarily unemployed chiefly benefiting lower-income workers, more needs to be done for middle-income and mature workers, said observers.

They also hope for clarity on whether a worker can benefit from both the new scheme and the existing SkillsFuture Mid-Career Training Allowance at the same time.

In the National Day Rally on Sunday, Prime Minister Lawrence Wong gave some details of the long-awaited SkillsFuture Jobseeker Support scheme, saying that it focuses on helping lower and middle-income workers.

The scheme will provide temporary financial support of up to S$6,000 in total, over a period of up to six months. Recipients must go for training, career coaching and job-matching, said PM Wong.

Not overly generous

Observers noted that the dollar amount, while higher than past or existing schemes, is not particularly generous.

Associate Professor Walter Theseira, a labour economist from the Singapore University of Social Sciences, said: “The scheme by quantum is targeted more at lower-income workers, as the payout amounts are quite low by international standards for replacement income-type schemes for middle-income workers.”

He noted that the S$6,000 figure is “more generous” than the S$640 basic monthly payout for a one-person household under the ComCare Short-to-Medium-Term Assistance scheme – but the latter is for those with a per-capita household income of S$800 and below.

The new scheme “does not obviously scale with the worker’s circumstances”, said Prof Theseira. “It will not replace a reasonable share of a worker’s wages except for fairly lower-income workers.

“So while some basic necessities may be covered, middle-income workers will still have to rely on their own savings or other income to maintain their former standard of living.”

Maybank economist Chua Hak Bin noted that the S$6,000 total is “more generous” than the temporary Covid-19 Support Grant, which provided a cash grant of up to S$800 monthly, for three months.

The amount could also be raised in the future to account for higher costs of living, he said.

Aslam Sardar, chief executive officer of the Institute for Human Resource Professionals (IHRP), said: “While the amount may not be considered overly generous, it provides meaningful assistance to those who have lost their jobs, giving them financial breathing space while they upskill or seek new employment.”

Despite the low quantum, the scheme can benefit mid-career professionals transitioning between industries “who often require retraining to pivot effectively”, he added.

More help needed for some

However, mature workers or those in highly disrupted sectors may need additional support, such as specialised retraining or career coaching, said Sardar.

Irene Tay, an HR practitioner at Guardian Health and Beauty, agreed that senior workers who have lost their jobs would likely need more help, especially for upskilling.

If the new scheme can be claimed alongside the SkillsFuture Mid-Career Training Allowance – which offers up to S$3,000 a month – this would then make for a “generous” sum to support such individuals, she added.

As the scheme’s benefits seem “somewhat less significant” for middle-income workers, there is a need to “examine that group closely to see whether they fall into some gap”, said Prof Theseira. “What can be done for them if they find the benefits insufficient compared to their last-drawn income?”

As for the scheme’s maximum duration, Robert Walters Singapore director Kirsty Poltock said six months was a “sensible” length of time to find a job – though this is contingent on workers being “flexible and open to opportunities across different learning spheres”.

“But if they’re inflexible, this will be a very difficult period,” she added.

OCBC chief economist Selena Ling said that the purpose of the six-month duration cap is “to avoid the moral hazard of staying unemployed for longer”, with the scheme clearly not meant to replace employment income.

Prof Theseira noted that the period of six months is “more or less aligned” with the statistical standard for long-term unemployment.

Showing effort

To qualify for the scheme, jobseekers will likely have to participate in accredited programmes and show evidence of job-seeking, said observers.

The Workforce Singapore website says that eligible individuals “who demonstrate active job search to seek new employment” will receive monthly payouts.

Julian Tan, CEO of job portal FastJobs, expects a similar approach to that of the pandemic-era SGUnited Skills Programme, which required jobseekers to enrol in heavily subsidised accredited courses.

The new scheme could require “active engagement” with accredited agencies and programmes such as SkillsFuture courses, as well as career coaching with agencies like e2i, Workforce Singapore and SkillsFuture Singapore, he said.

IHRP’s Sardar expects a need to submit proof of enrolment and completion of relevant courses, as well as evidence of active job-search efforts, such as applications submitted or interviews attended.

“Enforcement could involve regular check-ins to ensure progress, and job-matching initiatives could further streamline this process,” he added.

Other big questions remain unanswered, said observers. PM Wong said on Sunday that Manpower Minister Tan See Leng will provide more details in due course.

OCBC’s Ling questioned whether jobseekers could tap the new scheme more than once, as well as whether it might prompt “cases of collusion between some employers and workers”.

She also wondered whether employers would be deterred from giving severance pay – as they are not legally obliged to do so – once the new scheme is in place.

Rahul Chawla, head of talent solutions for South-east Asia at Aon, said more details – such as the courses jobseekers must attend, and exact eligibility criteria – will be needed for a clearer understanding of how the government is positioning the scheme.

“I would like to see this being positioned more as an individual reskilling and personal investment relief, rather than something to tide over loss of employment and reliance of livelihood on it for six months,” he said.

“It is for people to reset.”