About 6000 freelancers who provide their services to the Government and public sector agencies will be required to contribute a small portion of their income to their MediSave accounts regularly, under a new “contribute as you earn” (CAYE) scheme which starts in 2020 January.
Manpower Minister Josephine Teo said the new pilot scheme will help to overcome the difficulty some self-employed people face, in making an annual contribution to their Medisave account.
Currently, self-employed workers make MediSave contributions annually based on their earnings from the previous year. According to MP Teo, about 60% or 130,000 people don’t make their contributions in full in a lump sum in a given year. The root cause may be due to their irregular income.
Under the pilot, these freelancers will be able to make “smaller and regular contributions” to their MediSave accounts each time they are paid for their work.
There are no plans to extend the CAYE scheme to the private sector (eg. insurance and real estate agents) yet. However, this possibility isn’t ruled out. The Government will study how well the pilot works before deciding whether to expand it further.
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