In 2015, then-Deputy Prime Minister Tharman Shanmugaratnam was asked by BBC Hardtalk presenter Stephen Sackur if Singapore believed in the concept of a “safety net” when Singaporeans fall upon hard times. He masterfully replied: “I believe in the notion of a trampoline.”

Since our independence in 1965, 'state welfare' has been viewed as a dirty word and even the generous grants given to lower-waged citizens since 2007 have been deftly referred to as 'workfare' rather than its more accurate definition, 'welfare'.

But last week, I read with great excitement DPM Lawrence Wong’s announcement of a forthcoming unemployment benefits scheme for workers who have been retrenched — a move that is long overdue.

Having helped countless retrenched individuals over the past 20 years, I have seen firsthand how traumatising losing one’s job can be for the individual as well as their family.

Today, this has been made worse in an inflationary environment where the cost of living has been steadily rising.

During Covid, the government broke this taboo by providing short-term C19 Recovery Grants of S$500-S$700 for retrenched individuals, which proved helpful for many affected by the pandemic-led job losses.

And given a volatile confluence of factors like the uncertain economic climate and the advent of artificial intelligence, retrenchments will continue to be an inescapable part of the employment landscape. As such, any form of support would be gratefully welcomed.

However, pundits will warn of a worst-case scenario where an improperly designed or administered benefits system could have deleterious long-term effects — for example, fostering a 'crutch mentality' where handouts become more attractive than hard-earned wages, leading to prolonged unemployment.

Nonetheless, if I were tasked to design an Unemployment Benefits Programme for Singapore, it would probably look something like this:

OBJECTIVES

The Programme would be designed as a temporary support that will get the individual back on their feet, not as a long-term welfare programme. It will focus on job-hunting, right-skilling (being trained in the right areas that boost employability) and emotional/mental resilience development. 

WHO, WHEN AND HOW LONG? 

Despite being termed an Unemployment Benefit Programme, this scheme would apply strictly to Singaporean Citizens who have been retrenched, not for those who leave their jobs voluntarily and end up unemployed.

The monetary support should commence one month after the individual’s last working day to give programme administrators some time to vet and process each application, and the support payments should last until the individual secures a full-time job, for a maximum length of six months.

HOW MUCH?

In the last Household Expenditure Study conducted in 2018, it was noted that the average Singaporean family spent S$4,906 per month to run their home.

Given the rate of inflation over the last five years, one could surmise this cost could be around S$5,800 per month today.

The amount provided should not be so little that it leaves essential bills unpaid, but not so much that it disincentivises job searching.

In my view, the Government should provide a monthly cash payment of 75 per cent of the retrenched individual’s last drawn salary up to a cap of S$3,600/month for six months or until they land a job, whichever is earlier.

This would be a fair number as the cap reflects about 70 per cent of median income of S$5,070/month in 2022.

This ceiling would represent 70 per cent of the estimated running cost of the home, which will give retrenched Singaporeans much-needed breathing space and peace of mind while they embark on their retraining and job search.

The funding will be tied to specific activities or programmes like skills upgrading and job hunting, both of which can be administered by Workforce Singapore which has a ready pool of experienced career coaches to provide assistance and guidance.  

To qualify for these payments, the individual would need to clock a minimum number of hours of training a week to sharpen their skills and develop career resilience to inoculate them against future shocks. 

AN INNOVATIVE FUNDING MODEL

But where will all this money come from?

I would like to offer a sacred cow for the slaughter – let’s use our own Central Provident Fund (CPF) monies as an interest-free “bridge loan” to fund 50 per cent of the total amount.

Simply put, of the S$3,600 monthly payouts, S$1,800 would come from the Government and the other $1,800 would be drawn from the individual’s CPF Special Account.

After all, our CPF was designed to support us for a rainy day — being retrenched fits that description.

The CPF portion of S$10,800 (S$1,800 over six months) will be treated as a loan, repayable over 24 months (S$450 per month) once the individual lands a job.

As an additional incentive to encourage workers to stay and thrive in their new roles, the government could write off the full loan (S$10,800) if the individual remains in the job for a minimum of 12 months.

Ultimately, this exercise can be seen as a ‘sharing of the cost’, removing the ‘welfare’ element from the equation and making it more palatable for the Government.

BUT CAN WE AFFORD IT?

Friends to whom I’ve floated this idea wonder if the Government can afford such a scheme.

In 2022, 6,440 individuals were retrenched. Using this number as an example, it would cost the government only S$70 million, a small portion of the S$8.4 billion set aside for workforce training and job placement programmes in FY2020-FY2021.

In other words, we probably do have the resources if the spirit is willing.     

Another pushback I encountered was whether the S$3,600 over six months is too generous.

While I do think it’s fair, I submit this consideration: Can we even put a price on peace of mind and skills upgrading at the time when it is needed most?

Now, the numbers presented here are purely theoretical, made without full access to government budgets and policies, so I am ready to stand corrected. This is a commentary, not a White Paper.

Will a few unscrupulous individuals seek to abuse such a system? Perhaps — but let’s not throw the baby out with the bathwater.

It’s been said that a nation’s greatness is measured by how it treats its weakest members. What about how it treats its members in their weakest moments?

Let’s work together to explore how we can make our society a more compassionate and resilient one.

Adrian Choo is the CEO and Founder of Career Agility International, a career strategy consulting firm. A published author, speaker and thought leader in Careers, he is a widely sought-after C-suite Career Mentor.