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Loan for retrenched workers

Many big tech companies were laying off a part of their workforce in 2023 and will continue the layoff in 2024. Other companies are also reducing their workforce due to the slowdown in the global economy. Singapore is also impacted.

How will the retrenched workers in Singapore cope with the loss of income? In most advanced countries, there is an unemployment income scheme run by the government. It provides an income for the workers who lost their jobs. The benefit is usually based on a percentage of the lost income and is paid for a certain period, say 12 to 18 months.

There is no such scheme in Singapore. How do these retrenched workers cope?

They will search actively for a good paying job that uses their experience and skills. Some will succeed. Other will spend several months or years and give up.

Many will be take up a self employed job as a private hire driver or delivery rider.

Those who have personal savings will use them to meet their essential expenses, until the savings run out. They have to borrow from relatives and friends. Some resort to borrowing from loan sharks, which will compound their financial woes.

Here is my suggestion.

In the absence of unemployment benefits, the government should provide a monthly loan to retrenched workers. This loan is fixed at a percentage of their regular income, and will carry interest at a modest rate and will be subject to a cap, for example, $50,000. The loan will have to be repaid eventually.

Any unpaid loan will eventually be setoff against the CPF savings of the borrower. This setoff should not hamper the ability of the member to get a monthly income, after retirement, to meet the living needs.

To prevent abuse, the unemployment loan will be subject to eligibility conditions, similar to how unemployment benefits are processed in other countries.

Eventually, part of the unemployment loan will have to be written off. This will be treated as an expense of the government, similar to other types of welfare spending.

I hope that the government will introduce this retrenchment loan scheme as a scheme of last resort to the retrenched workers. It helps them and their families from the crutches of loan sharks.

 

Tan Kin Lian

 

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READER COMMENTS BELOW

6 Responses to “Loan for retrenched workers”

  • agreed:

    Help the retrench to cope especially with the high COL here…
    Maybe let them use their CPF for monthly basic needs for them and family until they found a job,especially for the seniors who has difficulties to find jobs.

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  • Good luck if you work in:

    Industries such as IT, Banking, etc. as you may face discrimination from foreigner hiring managers especially those who love to hire own kind. I hope the current employment regulations or laws, if there are, can prevent it.

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  • Singaporean R Free Rider:

    Dear TKL,
    Why don’t you you sell your bungalow house and use your own money to give out loan to the retrench workers ?

    Talk is cheap. I don’t see Opposition contributing anything positive.

    Name me just one positive contribution by Opposition. Zero. Yes, zero.

    SUNAK: If you can’t contribute to the UK, you’re not coming to the UK.
    https://www.thesun.co.uk/news/24946747/rishi-sunak-contribute-to-uk/
    excerpt:
    We are seeing rising numbers of overseas students and care workers, who often bring their families — and there is far too much abuse of our system.

    That is simply not fair on the honest, hard-working British people.

    It is undercutting British workers because firms can hire foreign workers for cut-price wages. It is putting pressure on demand for housing. It is stretching public services like the NHS. It is costing the British taxpayer through higher welfare bills.

    In other words, there are just too many people migrating to the UK.

    So we’ve launched a new plan to cut migration, with a simple message.

    If you can’t contribute to the UK, you are not coming to the UK.

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  • Singaporean R Free Rider:

    Retrenchment is no big deal.

    I had gone through 2 retrenchment exercise and each time I emerge better than the previous job.

    Why? Because I had high EQ gained from my 8 years of volunteer work at various RC, CARE, Kwang Hui Shiu Hospital, Ren Ci Hospital (this one I regret helping) etc.

    Also, I am thankful that PAP had strong labour laws to protect Singaporeans from exploitation.
    https://shorturl.asia/2euSR

    Hong Kong Jimmy Lai is right. US should nuclear bomb CCP.
    Jimmy Lai: We share your values
    https://shorturl.asia/OV1mc

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  • Harder Truths:

    “…To prevent abuse, the unemployment loan will be subject to eligibility conditions, similar to how unemployment benefits are processed in other countries.

    Eventually, part of the unemployment loan will have to be written off. This will be treated as an expense of the government, similar to other types of welfare spending….

    Hahaha you are so funny TKL. Since when did the Regime ‘give’ anything for free? Remember who voted these goons in. And also the fact that in glorious $inkieland, you die your business.

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  • Low low:

    You must be one of those who look up to gov to fix your problems created by them.

    Good luck if you work in:
    Industries such as IT, Banking, etc. as you may face discrimination from foreigner hiring managers especially those who love to hire own kind. I hope the current employment regulations or laws, if there are, can prevent it.

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