SINGAPORE — Workers who get retrenched may soon receive financial aid to tide them over while they look for better-fitting jobs or undergo training, with details of this scheme being announced later this year. 

Deputy Prime Minister Lawrence Wong, in delivering his Budget speech on Friday (Feb 16), said that the parameters of this temporary financial support scheme — which he had alluded to multiple times since last year — are now being ironed out.

This support scheme for retrenched individuals will be part of the existing SkillsFuture programme, he said, soon after announcing several enhancements to the programme, which includes a S$4,000 top-up in training credits. 

Mr Wong, who is also Finance Minister, added that the details of the upcoming scheme such as the amount of support and conditions that come with the funding must be designed "carefully”.

“This is to avoid the pitfalls other countries experienced when they introduced unemployment benefits.” 

His announcement came on the back of a recent spate of layoffs, including in technology companies such as e-commerce firm Lazada, and after overall retrenchments here more than doubled in 2023 from the year before.

Mr Wong said on Friday that technological changes will bring about “more churn in the economy”.

"Even when the economy as a whole is doing well, some businesses or even some industries may be suffering. In fact, it is not possible to have an economy that is dynamic and growing without failure and losses."

In some sectors, firms will have to let go of people, while in other sectors, new and better jobs will be created. 

“We have to accept this reality, but it doesn’t mean we should be indifferent to the suffering caused when firms lay off workers.” 

NOT EASY FOR SOME WORKERS TO UPGRADE SKILLS

Losing a job is a major setback for workers and their families, Mr Wong said.

"Those who become involuntarily employed naturally feel the pressure to rush into the first available job they find. But the new job may not always be a good fit."

This group of workers should ideally consider ways to upgrade their skills and find a job that fits their aptitude and talent.

However, some workers may not have the time to do this, especially when they are straining to make ends meet and that is why a temporary financial support scheme is needed. 

Mr Wong said that Singapore’s economy must be one that provides opportunities for all and one that benefits the many, rather than the few.

His announcement on Friday is in line with what is seen to be the Government’s gradual softening towards unemployment support in recent times.

For years, the Government has upheld a strong aversion towards giving direct financial support to the unemployed, saying that it could risk disincentivising people from seeking re-employment.

In January last year, Mr Wong acknowledged that retrenched workers may end up taking the first job available due to pressures to put food on the table. He said then that the skills and training eco-system should be reviewed to provide “re-employment support” without eroding incentive to work.

Experts who spoke to TODAY at the time said that the shift in stance might be due to more volatility in the labour market following widely reported layoffs of young professionals in promising industries, which warrants a relook at how to better support retrenched workers.

Last September, Mr Wong said that the Government is mulling an “appropriately sized” support as part of a revamp and expansion of the existing SkillsFuture programme, to help workers “bounce back stronger” after retrenchments.