75 low-income families get unconditional cash in trial

Exhausted and hopeless was how Ms Irawati began 2022 as the then jobless mother struggled to put food on the table.

Her husband’s income as a delivery rider was unstable, and she was often disappointed in herself for being unable to provide the best for her five children, who are between two and 16 now.

But things got better when she began receiving $550 each month for a year-and-a-half, money which gave her the confidence, motivation and breathing room to find full-time work, said the 37-year-old who goes by one name. She is now working as an office cleaner.

Her household was one of 75 low-income families who received between $300 and $550 a month between May 2022 and November 2023 through social service agency Awwa’s Family Empowerment Programme.

The cash assistance came without any strings attached, meaning that they did not need to secure employment or meet other conditions to receive the funds.

The programme was run as a randomised control trial – the first on such unconditional cash transfers in Singapore.

Similar programmes have been conducted overseas, including cash transfers to low-income New Yorkers during the Covid-19 pandemic.

Awwa’s project found that the cash improved participants’ mental health and job security, compared with a control group of 95 households.

The organisation announced these results at an event held on July 17 at Awwa Home and Day Activity Centre in Pasir Ris, with President Tharman Shanmugaratnam attending as guest of honour, accompanied by his spouse, Ms Jane Ittogi.

To qualify for the cash assistance, households must have had a monthly income equal to or less than $1,000 per person, or a total income equal to or less than $3,600 before Central Provident Fund deductions.

They must also have at least one Singapore citizen or permanent resident in the household, and at least one adult capable of work aged between 16 and 65, and must have been known to Awwa’s Family Service Centre or transitional shelters for at least a year.

By the end of the programme, 60 per cent of participants who received the cash were classified “well” in terms of their level of psychological distress, compared with 36 per cent of those in the control group.

When the project concluded, 27 per cent of those receiving the cash also reported better job security than before, higher than 15 per cent of those in the control group who said the same. This meant landing more secure contracts, from part-time to full-time work, for example.

More of those who received the cash – 57 per cent compared with 51 per cent for the control group – also reported that they had better training and advancement opportunities in their current jobs than before the programme began.

Awwa started the project as part of its efforts to better serve disadvantaged families earlier, said Ms Huixia See Toh, its director of family services.

Awwa wanted a solution which empowered families to make their own decisions, she said in a presentation at the event.

She said: “Research has shown that individuals in chronic poverty are stuck in a cycle of addressing their own needs and urgent need which affects their cognitive functioning...

“This lack of mental bandwidth and financial resources really reduces their ability to plan and invest for the future.”

Awwa worked with Tri-Sector Associates, a social impact firm, to structure the programme which received its first round of funding of $750,000 from Standard Chartered Bank.

If specific outcomes – focused on education, skills upgrading and employment – were met, Temasek Trust would come in to fund a second round of the project with another $750,000.

As these requirements were met, Temasek Trust will fund a second leg of the project, Awwa said.

There was initially pushback against the idea of unconditional cash transfers, said Tri-Sector’s chief executive Kevin Tan at a panel discussion towards the end of the event.

There were concerns that people would not be incentivised to work, or would waste the money, he said.

But the trial found that positive effects of lifting the mental strain of financial stress far outweighed any of these effects, he added.

Such cash transfers are powerful because of their flexibility and, because more than resources, they also grant their recipients autonomy, said Dr Ng Kok Hoe, senior research fellow at the National University of Singapore’s Lee Kuan Yew School of Public Policy.

Dr Ng, who was also speaking at the panel discussion, added that such assistance gives recipients a sense of dignity because it indicates respect and trust in their capacity to make decisions.

Ms Irawati found that receiving the cash gave her a new outlook on life. While she had received other forms of support in the past, receiving it in the form of cash gave her a sense of hope and empowerment, she said.

She used it to buy healthier food and textbooks for her children, and also to get a motorcycle licence, allowing her to work as a food delivery rider for some time.

She said: “I was able to tell my kids, ‘Yes we can go out to eat; Yes mummy can buy you this’, and that gave me the motivation to work and be successful, and to go out and help others.”