Not all in bottom 10 per cent are poor, says MOF

Not all in bottom 10 per cent are poor, says MOF

THE Ministry of Finance (MOF) has come out to explain why many households in the bottom 10 per cent by work income are not all that poor.

It did so in the light of a new study on households' income and expenditure patterns by an academic.

Resident households in the bottom 10 per cent earned on average $1,711 a month from work last year. Those in the next 10 per cent earned $3,372, and the next 10 per cent, $4,993.

But 30 per cent of households in the bottom 10 per cent live in private homes or larger flats.

Some 9 per cent employ domestic helpers, and 15 per cent have cars.

They also receive more non-work income, such as rental income, investment returns and dividends, than households earning more from work.

The main reason for this is that an increasing share of households in the bottom 10 per cent comprise retirees who have assets and savings.

Among these households, those with at least one person aged 65 and over rose to 67 per cent last year, up from 57 per cent a decade ago.

In his speech rounding up the Budget debate last week, Deputy Prime Minister Tharman Shanmugaratnam said he excluded the bottom 10 per cent from a chart that showed government transfers to the less well-off because "a fair number of them are in fact not poor".

On Tuesday, MOF said that in studying whether households can afford their expenditures, researchers must consider that those who are poor are "co-mingled within the lower income deciles with retirees with savings and other assets".

It said: "Higher expenditures than incomes are in part shaped by this reality, as in other societies as they age."

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