MOM: Lower-income platform workers’ salaries unaffected by CPF contributions in 2025

The Government announced on 22 August 2024 that it will fully pay for the CPF contributions of lower-income platform delivery workers and private hire drivers in 2025.

The scheme will benefit platform workers earning up to $3,000 a month.

The Ministry of Manpower’s (MOM) enhancement of the Platform Workers CPF Transition Support (PCTS) scheme aims to increase platform workers’ CPF contributions next year and ensure their earnings are unaffected by the contributions, said Senior Minister of State for Manpower Koh Poh Koon at a company visit to Foodpanda.

He added that the Government wants the platform economy to continue developing sustainably.

Dr Koh also said that workers who decide to join this line of work will also be covered adequately for their housing and medical needs in the longer term.

“This is especially important for younger platform workers as they may be in this job for quite some time. Many of them may have housing needs or may be starting their own families.

“Having a steady stream of CPF contributions would ensure that they are able to serve their housing needs while ensuring that they benefit from the compounding interest in their CPF as early as possible,” he said.

Dr Koh added that the Government plans to require platform operators to provide CPF and work injury compensation to platform workers from 1 January 2025.

Platform Workers CPF Transition Support (PCTS)

In November 2022, the Government accepted the recommendations of the Advisory Committee on Platform Workers to align CPF contribution rates of platform workers and companies with the rates contributed by employees and employers.

The committee recognised that the increased contribution to platform workers’ CPF would affect the workers’ take-home pay. It then recommended that the Government help ease the impact by providing support during the initial years of the transition.

The Government introduced the PCTS in 2023 to assist platform workers with financial concerns during the compulsory CPF contribution period from 2024 to 2027.

Lower-income platform workers in the mandatory cohort or who opt-in to boost their CPF savings will receive the PCTS.

The PCTS will provide monthly cash support to offset part of the increase in CPF contributions.

In an initial announcement, MOM shared that the PCTS will offset 75 per cent of the CPF contributions increase for platform workers earning below $2,500 per month in 2025.

With the enhancement, the PCTS will offset 100 per cent of the share of the increase in CPF contributions for platform workers earning up to $3,000 per month in 2025.

The PCTS cash support will decrease by 25 per cent each year until 2028. Platform workers will have to make their own CPF contributions by 2029.

A delivery worker's take on CPF contributions

Foodpanda Delivery Rider Danish Said, 28, who does delivery for the platform on a part-time basis, feels that the CPF contribution will take a sizable amount out of delivery workers’ take-home pay come 2029, when the PCTS is no longer in effect.

He currently works only on weekends, and on a good month, can take home around $1,200.

Based on a 20 per cent CPF contribution, his monthly pay would become $960.

He said: “There will be a lot of adjustments to lifestyles, but it is not necessarily a bad thing. It is just a matter of getting used to.

“It is for a greater good, I understand that and believe in that.”