Government studying roll-out of CAYE Medisave scheme to private sector: Tan See Leng

Singapore

THE Singapore government is studying if its Contribute-As-You-Earn (CAYE) scheme can be extended to the private sector, following an "encouraging take-up" in the public sector, according to Minister for Manpower Tan See Leng.

The scheme, which was rolled out in the public sector last year, allows freelancers or self-employed persons (SEPs) to make small and regular contributions to their Medisave accounts from the work they are contracted.

Dr Tan was speaking at the PropNex Mid-Year Convention 2021.

Rolling out the initiative to freelance professions such as property agents can prove to be challenging administratively, according to property agency chiefs The Business Times spoke to.

One common challenge flagged by PropNex Realty, Huttons Group and ERA Realty is the lack of consistent income for real estate agents.

Unlike the CAYE pilot which applies to government vendors or contractors where the amount is certain, the commission amount for property agents varies not only depending on time of transaction, but also from agent to agent.

Over or under contribution would be a potential issue, according to Jack Chua, executive chairman of APAC Realty - the master franchisee for ERA in Asia-Pacific. As Medisave is contributed based on net trade income and not gross trade income, the agency would not know the percentage to contribute and would rely on the agent to estimate and declare to the agency, Mr Chua said.

PropNex Realty chief executive Ismail Gafoor hopes the CAYE scheme, if implemented, would be done so on a voluntary basis, as challenges are understood and addressed along the way.

Meanwhile, Huttons Group chief executive Mark Yip said that the scheme would likely be an attractive one for active property agents who are able to make a living from the profession. "However, the market is flush with different agents who vary in terms of activity, with some only managing transactions on a moonlighting basis," he noted.

Under the CAYE scheme, SEPs who provide services directly to the public sector are able to have their Medisave contributions transferred by the government, as and when they earn such income.

The government sets aside a portion of the SEPs' service payment as Medisave contributions before paying out the rest of the amount. By doing so, SEPs are able to make small and regular contributions while working versus making lump-sum contributions when there is little or no income, a problem some may face during this period, according to Dr Tan. "We will continue to consult with all the key industry stakeholders, including industry and SEP associations, before doing so," he said.