Over 8,000 platform workers opt in for higher CPF contributions
More than 8,000 platform workers have opted in for higher Central Provident Fund (CPF) contributions under the Platform Workers Act, which will take full effect from Jan 1, 2025.
The Ministry of Manpower (MOM) gave this update on Dec 17 – 1½ months after cabbies, private-hire drivers and freelance delivery workers born before Jan 1, 1995, could begin opting in for the higher contribution rates via the CPF website from Nov 1.
Under the Platform Workers Act, which was passed by Parliament in September, it will be mandatory for younger platform workers born on, or after, Jan 1, 1995, to contribute more to their CPF accounts.
Platform companies will be required to contribute their share.
Older platform workers will be able to opt in to boost their CPF savings as well.
Over the next five years, the contribution rates for these platform workers will increase by up to 2.5 percentage points per year, while the rates for platform operators will rise by up to 3.5 percentage points per year.
This will enable them to eventually be aligned to what employees and employers pay today. The current CPF contribution rates for employees aged 55 and below are 20 per cent of wages for employees and 17 per cent for employers.
MOM said the higher rates are mandatory for younger platform workers as they have a greater need for CPF savings to pay for housing, and they can benefit more from the compounding interest.
For older workers, the ministry said on Dec 17 that it has been working closely with the National Trades Union Congress to encourage early opt-ins so they also have a longer runway to benefit from compound interest.
According to early labour statistics released by MOM in late November, about 67,600 regular platform workers were residing in Singapore in 2024. Of them, 5.4 per cent were below the age of 30.
Based on a back-of-the-napkin estimate, this puts the number of platform workers who have the option to go for higher CPF rates at about 64,000; and the proportion of those who have already opted in at about one in eight.
ComfortDelGro cabby Woo Keng Chung, 44, is among those who have already opted in. He said it was a straightforward decision, even if it means taking home less.
“At the end of the day, it is still my money. It’s just which pocket it is in,” he said.
“At least I have the assurance that I will have an amount for retirement in the future. It might not be much, but at least I feel secure,” he added.
While there is no deadline for older workers to opt in for the higher CPF rates, the decision to opt in, once made, cannot be reversed.
MOM previously said this is because platform operators would otherwise need to monitor the opt-in status of workers and track their different contribution rates, which is impractical and may lead to significant business costs.
To assuage concerns about a reduction in take-home pay as a result of the higher CPF rates, MOM noted that lower-income platform workers who opt in will get monthly cash payments to offset the year-on-year increase in contributions.
This will start at 100 per cent of the increase in 2025, before dropping to 75 per cent of the increase in 2026, 50 per cent in 2027 and then 25 per cent in 2028.
Older platform workers who do not opt in for the higher CPF rates will be required to continue making contributions to their MediSave accounts and will not get any contributions from platform operators, MOM said.
Platform operators will be required to deduct the CPF contributions from platform workers’ earnings and transmit them to the CPF Board every month. This includes the MediSave contributions for those who do not opt in.
MOM also reminded companies on Dec 17 of their responsibility to assess whether they are considered a platform operator under the Platform Workers Act and to notify the ministry if they fall under the legal definition.
A list of the platform operators in Singapore will be made available on the ministry’s website after January 2025.
A platform operator that makes a wrong self-assessment will be required to pay any outstanding CPF contributions or work injury compensation owed.
Platform operators may also face penalties for not making CPF contributions or not providing work injury compensation in a timely manner, and for failing to notify MOM that they are platform operators.
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