Platform workers worried about take-home pay with CPF contribution, companies concerned over impact on users

SINGAPORE: Platform workers expressed concerns about the impact on their take-home pay, with older workers declining to contribute to their Central Provident Fund (CPF) accounts, in response to a list of job protection recommendations that was accepted by the Government on Wednesday (Nov 23).

These platform workers told CNA that they were worried about a drop in take-home pay, and others said that with the issue of housing loans settled, they would rather keep their money or invest it elsewhere. 

Platform companies welcomed the recommendations but noted the potential impact on delivery riders and consumers when they are implemented. 

The CPF measure was one of 12 recommendations made by an advisory committee on platform workers. They will be implemented gradually from the later part of 2024 at the earliest.

Platform workers below the age of 30 will be required to contribute to their CPF Ordinary and Special Accounts. 

The advisory committee said that younger platform workers are more likely to have housing obligations or plans to buy a house and can use Ordinary Account contributions to pay for housing loans. These younger workers will have a longer runway to accumulate savings, and can benefit from the compounding effect of CPF interest rates, it added. 

However, the advisory committee recognised that those aged 30 and above may already have retirement plans or paid off housing loans, hence they should be offered the choice of whether to opt in to a CPF contribution regime. 

On this portion of workers, the committee said: “Nonetheless, the committee strongly encourages these platform workers to opt in if they do not already have separate plans to save for their longer-term needs. 

“This is especially so for platform workers aged 65 years old and above who will be able to enjoy additional platform company contributions without having to contribute more on their own.”

For foodpanda delivery rider Terence Koh, take-home pay is still a priority as he has two children, both toddlers.

“Now my kids are still yound and I need more cash on hand than in CPF,” said the 30-year-old. He said he had already paid off his housing loan and was not in need of CPF money. 

The advisory committee did not indicate the amount of CPF contribution to apply, but suggested a phased increase in CPF contributions over five years, with an average of 2.5 per cent to 3.5 per cent increases annually – unless major economic disruptions require a longer timeline.

Eventually, the CPF contributions of platform workers and platform companies will be aligned to employees and employers respectively. Currently, employees aged 55 and below contribute 20 per cent of their wages while employers contribute 17 per cent. 

However Mr Koh thinks that such an amount may be “a bit too much”. 

“The take-home will be way lesser … At the end of the day it will still be 20 per cent of what you earn,” said Mr Koh. 

Full-time GrabFood delivery rider Nikhil Krishnan cited income instability as a reason for not wanting to opt for CPF contributions. 

The 33-year-old said that orders had slowed for the past three weeks, resulting in him making less than usual. In such a case, he would not want to contribute to CPF at all. 

“Most of us we want our own CPF and decide what we want to put. If this month I earn less, I put S$200. If I earn more than I put up to S$500. Like this month, (my wages) are really very low so I don’t want to put at all.” 

Likewise, GrabCar driver Jong Choon Wee, 48, said that he needed money for petrol and car loan repayments, and had “no extra” to contribute to CPF. 

GrabFood delivery rider Zhang Wei Qiang said that the mandatory CPF contribution was good for younger platform workers who were planning to buy a house.

He would, however, choose not to contribute. “You earn S$3,000 you want (to) see S$3,000 cash or you want see it become S$2,400 because deduct CPF?”

A self-disciplined person would be able to save every time he earned, the 29-year-old added. 

Giving an example, Mr Zhang said: “Even (if the companies) give 17 per cent of CPF, can see cannot touch. Might as well I get the whole portion of money, put it in a bank for interest. At least if I’m urgent I can take out (for) use. Or maybe do a savings plan insurance, put in S$100 to S$200 for their lowest plan, which is five years (I can) also get a lot of interest.”

Mr Zhang was also concerned that platform companies would cut fares or incentives for riders. Companies might reduce incentives as they would be potentially losing money by paying out CPF, he said.  

“If they cut fare incentives, how much longer we got to work a day, how much more hours (do we have) to do?”