Higher Medisave contributions: SMEs may need more help

Higher Medisave contributions: SMEs may need more help

SINGAPORE - The civil service should be applauded for increasing its contributions to its employees' Medisave accounts, over and above the 1 per cent extra employer Medisave contribution announced in this year's Budget ("Civil servants, unions cheer extra Medisave contribution"; last Saturday).

The report quoted the Singapore Business Federation as saying there was "already an outcry" from small and medium-sized enterprises (SMEs) following the Budget announcement, and that not all segments of employers can afford to further increase their contributions.

While we cannot expect all employers to offer the same benefits, Singaporeans working in such firms could potentially experience depressed wages in view of the extra 1 per cent Medisave contribution that their employers need to fork out.

Perhaps more can be done.

For instance, it has so far been unclear if the extra 1 per cent employer Medisave contribution announced in the Budget will be given to those not affected by the increases in MediShield Life premiums, such as foreigners working here.

If it was initially meant for all Central Provident Fund members, perhaps the policy could be tweaked so that only those affected by the MediShield Life premium increases are given the extra 1 per cent, allowing more funds to be channelled to Singaporeans in the private sector and SMEs.

At the same time, SMEs should be given more help in meeting increased Medisave contributions, so that Singaporeans working in such firms are not unfairly penalised.

Christopher Chong


This article was first published on July 8, 2014.
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