Social Security in Singapore

1. Legal Framework

The Central Provident Fund (“CPF”) is primarily the bedrock of Singapore’s social security framework.

2. Contributions

In Singapore, CPF is a compulsory comprehensive savings plan for working Singaporeans and Singapore permanent residents primarily to fund their retirement, healthcare and housing needs.

All employees eligible for CPF and their employers make monthly contributions to the CPF. Contribution rates change periodically but for private sector Singaporean citizens and Singapore permanent residents (in their third year) below 50 years old and earning monthly wages of above SGD 750, these are from 1 January 2014 pegged at 16% for the employer and 20% for the employee. Employees aged over 50 will have both their contribution rates revised downwards.

3. Insurances

Employers are required by law to maintain work injury compensation insurance for (i) all employees doing manual work and (ii) non-manual employees earning S$1,600 or less a month. Failure to do so is an offence punishable by a maximum fine of S$10,000 and/or imprisonment of up to 12 months.

It is not mandatory, however, for employers to maintain insurance for non-manual employees earning more than S$1,600 a month. Nonetheless, employers will be required to pay compensation in the event of a valid claim, even if they do not buy insurance. As such, employers can decide whether or not to buy insurance for this group of employees, after weighing their risks with the cost of insurance premiums.

4. Family friendly rights

There are two statutes governing maternity and adoption leave: the Act itself and the Child Development Co-Savings Act (Cap. 38A 2002 Rev Ed) (“CDCA”).

An employee who is covered under the Act, but not under the CDCA, will be entitled to 12 weeks of maternity leave. She will be paid by her employer for the first eight weeks of maternity leave if she has less than two children (excluding the newborn), and she has served her employer for at least 90 days before the birth of the child. The last four weeks of maternity leave can be taken flexibly over a 12-month period from the child’s birth.

Under the CDCA (legislation that only applies in respect of children that are citizens of Singapore), an eligible employee is entitled to absent herself from work four weeks immediately before and 12 weeks immediately after delivery, totaling 16 weeks. A mother can agree to take the last 8 weeks of maternity leave flexibly over a 12-month period following the child’s birth with the mutual agreement with her employer. An employee covered under the CDCA will be entitled to Government paid maternity leave.

Under the Act, an employee who has served an employer for a period of not less than 3 months and has any child below the age of 7 is entitled to childcare leave of 2 days to be taken at any time up to the child’s 7th birthday. Under the CDCA, leave is up to a maximum of 6 days per year depending on the length of service of the employee.

Fathers who have served his employer for no less than 3 months immediately preceding the birth of the child will be entitled to one week of government-paid paternity leave if the child is a Singapore citizen and he is lawfully married to the child’s mother.

Please note that there is no statutory entitlement for marriage and compassionate leave under the Act. The entitlement to such leave depends on what is in the employment contract or agreed mutually between employer and employee.

For more information, please contact L&E Global.
This information was contributed by Clasis LLC in association with Clyde & Co.
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