The Workfare Income Supplement (WIS) Scheme in Singapore is an important scheme instituted for the betterment of low-wage employees, as it supplements their income and encourages saving for retirement. The program also covers self-employed persons (SEPs) who generally do not have employer contributions to Central Provident Fund (CPF) accounts.
There are major enhancements announced to be implemented from January 1, 2025, which will give self-employed persons more opportunities for further benefits through the WIS scheme.
Know About the WIS Scheme
Incepted in 2007, the WIS scheme largely aims at regular work and retirement sufficiency by complementing incomes through cash and CPF disbursements. For SEPs, WIS is mainly about their MediSave accounts with a small cash payout in addition.
This is one of a number of strategies taken by the Singapore government to catalyze social mobility and make citizens benefit from or be included in the growth of the country.
Criteria for Eligibility of SEPs
There are certain criteria for SEPs to be eligible for WIS. First, he/she must be a Singapore citizen. Second, he/she must have reached the age of at least 30 as of December 31 of the work year, unless the person is a person with disabilities in which case there is no minimum age.
The ceiling on average monthly income eligibility will go up from $2,500 to $3,000 starting from 2025. At the same time, the minimum income stays at $500 every month. SEPs are also required to declare their net trade income (NTI) and make the MediSave counterpart contributions. Both declaration and contribution must be done by December 31 of the second year after the work year’s end.
In addition, he/she must live in a property whose annual value does not exceed $21,000 and owns no more than 1 property. If married, both spouses shall own no more than one property collectively and the assessable income of the spouse for the preceding year shall not exceed $70,000.
Enhanced WIS Payments from 2025
It must be 2025 before the maximum annual payouts under the WIS scheme would be increased across all qualifying age groups. The maximum annual WIS for self-employed persons between 30 and 34 years will increase from $1,400 to $1,633 as of that year.
Those aging between 35 and 44 years will witness an increase from $2,000 to $2,333. For those aged 45 to 59 years, they will now be receiving between $2,800, up from $2,400, as WIS benefits. Workers aged 60 and above, and persons with disabilities, will be eligible to receive annual benefits up to $3,267, up from the current $2,800.
These increased payouts reflect the ongoing commitment of the Government to ensure better adequacy at retirement and to continue support to low-income individuals.
WIS Payment Allocation for Self-Employed Individuals
WIS payments for self-employed persons are made in two portions. Ten percent is paid out in cash for immediate assistance, whereas the rest goes into the individual’s MediSave account, which is used to share the payments or premiums for medical care and insurers like MediShield Life.
The cash component is usually credited to the individual’s PayNow NRIC-linked bank account. If NRIC has not been linked to PayNow, the payout can be made to the individual’s bank account for government disbursement or via GovCash if they do not have access to any bank account.
WIS Payment Receipt
SEPs receive payments under the WIS once a year for work done in the preceding year. Ensuring an early payout implies that declared income to the Inland Revenue Authority of Singapore (IRAS) and the requisite contributions to MediSave are done before March 31 of the next year.
For income earned in the year 2024, declarations should be made, and contributions must be done before March 31, 2025. This will ensure that the money under the WIS will be credited by the end of April 2025.
Increasing Your WIS Benefits
There are some important things self-employed persons can do to maximize their WIS Scheme: they should declare income on time. This means that their eligibility will be correctly assessed, and they will avoid delaying payouts.
Second, MediSave contributions must be fully made and on time; anything less may disqualify WIS. Lastly, staying updated will make all the difference. The dynamics of government policies change, and being in the loop ensures that SEPs can always take advantage of the existing benefits.
Conclusion
This enhanced WIS scheme will commence in 2025, and during which time self-employed persons have more to gain. An increased income ceiling and payout amount provide a much wider safety net for lower-wage individuals. By understanding eligibility guidelines, observing relevant deadlines, and making proper decisions related to these benefits, self-employed persons can benefit greatly from this scheme.
The WIS initiative essentially supports its beneficiaries with income assistance in the short term while strengthening financial security in the long run through a MediSave program; thus, it truly is one of the instruments working towards including growth in Singapore.