Surprise cut in maid levies

The following article was published in the Straits Times on 19 Feb 2005.

Surprise cut in maid levies
Saturday Special Report
Straits Times, 19 February 2005

Employers will save $600 a year from April 1 with incentive, which will cost Govt $90m

PLENTY of family friendly benefits were doled out, with one of the most surprising measures tailor-made for the home helper.

Foreign maid levies will be chopped by $50 a month to $295 from April 1, saving employers $600 a year. And families with kids under 12 or parents over 65 who are already paying the reduced levy of $250 will now fork out only $200.

The measure, which will cost the Government $90 million, is aimed at helping employers cope with the higher wages for the 'better maids' that Singapore is attracting.

All new foreign maids must now be at least 23 years old and have at least eight years of formal schooling, compared to before, when the only criterion was that they be at least 18.

The Budget also addressed the cost of bringing up babies, with more leeway for parents to enjoy the co-savings scheme launched in August as part of a $300 million pro-family package.

Parents were told then that for their second to fourth child, the Government would match, dollar-for-dollar, the amounts they contributed to a bank account set up for the child until the age of six. The cap was set at $1,000 a year for the second child and $2,000 a year each for the third and fourth child.

But parents had complained that they were sometimes unable to save up to the maximum limits each year. Prime Minister Lee Hsien Loong said yesterday: 'They wanted flexibility to save more in years when they can afford to and to use the co-savings in more ways for their child's educational and developmental needs.'

Under changes outlined yesterday, parents can choose to save however much they want in each year, subject to the total limit for six years, which is $6,000 for the second child, and $12,000 each for the third and fourth child.

And instead of the money being restricted for for child and infant care and kindergarten, parents can now put it towards health insurance and early-intervention programmes for special-needs children. More details will be announced during the Committee of Supply.

Young people will also benefit from a one-time $100 addition to the Edusave accounts of every eligible primary and secondary school student, which comes on top of the Government's yearly Edusave handout. The fund can be used by children for enrichment activities such as camps. It will cost the Government $50 million.

The Budget's family measures have pleasantly surprised human resources executive Samantha Sng. The 37-year-old mum of two girls, with a third daughter expected in June, relies on her mother, who is in her 60s, and two maids to care for her children.

She said: 'It's good that families like mine are getting extra help. The greater leeway in use of co-savings will give parents the room to use the funds to best suit their childrens' needs.'

Ernst & Young tax director Jacinta Loi cited the reduction in maid levy as having the greatest impact for the Sngs. 'With two maids, the family will save $1,200 a year.'

Said Mr Arthur Ling, executive director of Fei Yue Community Services: 'The measures are definitely helpful to families, and also give them an element of choice in how they want to use the co-savings.'

Mr Tom Kalwani, 52, pointed to the Edusave top-up as a way to ensure that his daughter, Ekta, who is in Secondary 1, gets an all-rounded education. 'She's interested in modern dance and also wants to go on study tours. I'm sure the extra money will come in handy for such activities,' he said.

Support for families

Changes at a glance:

Reduction in maid levy of $50 a month for all employers. Also applicable to those with children below 12 or old folks over 65 years who are already paying lower levy.

More flexibility in co-savings scheme for the second to fourth child.

A one-time $100 Edusave fund top-up for all eligible primary and secondary school children.

Case study: Human resource executive Samantha Sng and her husband Craig, both 37, have two daughters aged six and two, with a third girl due in June. They live with Mrs Sng's mother, who is in her 60s, and two maids.

The effect of the changes on the Sngs:

Monthly levy for both maids now: $500 altogether

Monthly levy for both maids from 1 April: $400 altogether

Savings: $1,200 a year.

Co-savings scheme for third daughter: Can save as much as she wants each year and will get dollar-for-dollar contribution from the Government, up to a total cap of $12,000 for six years. Can use for health insurance and early-intervention programmes if needed.

For other families with children in school:

Edusave contributions: Children in primary school get $170 a year; those in secondary school get $200 a year.

Now: All eligible children get a $100 one-time addition. Edusave for primary school children is $270 this year and $300 for secondary school children.

The trouble with Singapore's foreign maid supply

The following article was published in The New Paper on 8 Feb 2005.

The trouble with Singapore's foreign maid supply
The New Paper, 08 February 2005

FINDING maids for Singapore has become troublesome, said Indonesian suppliers.

Those who are the right age may not have enough education. And those who have enough schooling may not be old enough.

According to the Manpower Ministry's entry requirements, all new maids must be 23 or above and have at least eight years of formal education.

Mr Johanes Tanagan, of the Asosiasi Perusahaan Jasa Tenaga Kerja Indonesia (Apjati), said: 'When most Indonesians come to Singapore to work, they are 18 or 19, not 23.'

From April, all new maids will also have to take a multiple-choice test in English when they arrive.

The MOM introduced these measures to improve the quality of maids here.

After the requirements came into effect on Jan 1, some agencies claimed they have 50 to 70 per cent fewer Indonesian maids to offer employers.

Mr Johanes estimated that recruitment of maids for Singapore had fallen about 80 per cent.

Mr Natal Paung, an Apjati member who has been in the business for eight years, used to send 80 to 100 maids to Singapore each month. This was down to under 20 last month.

'Village women don't usually come to Jakarta with their education certificates, which means we have to send them back to collect or we have to go to their school to apply for them,' he said.

'It's troublesome'.

Other markets are less restrictive and offer better wages and profits, he said. The current top choice is Taiwan, followed by Hong Kong and Malaysia.

'In Taiwan - higher profits for us, higher salary for the maid, ' said another supplier, who declined to be named.

He said that for each domestic worker placed in Taiwan, a supplier can pocket NT37,000 ($1,911) - about twice of what they get for one worker here.

He added that the workers themselves want to head to Taiwan for higher wages and better employers.

A domestic worker can earn the equivalent of about $800 a month in Taiwan, said suppliers. This is more than three times what they earn here.

TESTING PROBLEM

'Applicants still want to come to Singapore. The problem is the test, ' said Mr Januarius Iljas Purwawto, vice-secretary of Apjati's Singapore division.

And there's the question of who will pay for the repatriation if a maid fails the entry test.

'Who wants to pay for that or take the risk? We'd rather ask those who want to come to Singapore to go elsewhere,' he said.