0.7-month bonus for civil servants

SINGAPORE - Civil servants will get a year-end variable bonus of 0.7 months this year, with those on lower salaries receiving a minimum payout of $1,000.

This is the first time the Government is setting a minimum dollar amount for its Annual Variable Component (AVC).

The move benefits civil servants who earn less than $1,430 a month and is part of an ongoing push by the Government and unions to raise wages at the bottom.

This year's AVC is the lowest since 2009, when none was given.

Besides the 0.7 months AVC announced last Thursday, Singapore's 77,000 civil servants were paid a mid-year bonus of 0.3 months.

Together with the traditional 13th month bonus they will get next month, their total bonus this year is two months.

This is a drop from last year's 2.25 months plus $250.

It is also less than the 2010 bonus of 2.5 months plus $300.

The slightly lower AVC this year is due, the Public Service Division (PSD) said, to a "more subdued global economic outlook".

The economy is expected to grow by just 1.5 per cent this year.

But the $1,000 minimum gives the 2,000 lowest-paid civil servants more than what they would have received otherwise.

For example, a 0.7 month AVC for an officer earning $1,200 would have been $840, without the minimum, said the PSD. "This signals the Government's continued commitment to help low- wage workers," it added.

The latest move follows a mid-year pay rise it gave 9,500 lower-wage civil servants in divisions III and IV.

The officers received increments of between $30 and $60, on top of their usual annual increments.

Last Thursday's announcement was cheered by National Trades Union Congress (NTUC) assistant secretary-general Cham Hui Fong.

She said in a statement that the labour movement was happy the Government had supported its proposal "to have a higher dollar quantum to help the low-wage workers".

She later told The Straits Times the NTUC will ask private sector companies to "calibrate part of (the AVC) in a dollar quantum" for low-wage workers.

But that is for those companies that are doing well, she added. "It's still very much subject to affordability."

The Amalgamated Union of Public Employees finds the AVC "fair given the slowing growth in Singapore's economy", said its general secretary Ma Wei Cheng.

The $1,000 minimum would help low-wage workers cope with living expenses, he added.

The president of the Amalgamated Union of Public Daily Rated Workers, Mr Subari Samuri, agreed and added: "Once again, we remind our members to set aside some of the payment and save for a rainy day."

Pest controller Krishan R. welcomed the minimum sum but the 57-year-old added: "Our pay itself needs to be higher."

The father of two schoolgoing children earns $900 a month.

The civil service year-end bonus often serves as a guide to the private sector and there are signs companies may go beyond the benchmark.

Managing consultant Peter Lee said surveys by his firm RDS Remuneration Data Specialists suggest the private sector may pay a total variable bonus of 1.6 to two months.

With the 13th month payment, the total bonus will be 2.6 to three months.