A Guide to Employee Benefits in Singapore
This is a guide for management and human resource executives on employee benefits in Singapore. It is specially written for North American and European headquartered multi-national corporations with a branch in Singapore.
Healthcare in Singapore is financed by a combination of taxes, employee benefits (EB), insurance compulsory savings in the form of Medisave, and out-of-pocket payment. All citizens and permanent residents of Singapore participate in the Central Provident Fund (CPF) enforced savings scheme. As of 1 April 2008, expatriates working in Singapore are no longer eligible for the CPF scheme. All foreign employees must be compulsorily insured by employers under at least the minimum hospital and surgical schemes for employees according to Ministry of Manpower (MOM) rules. All workers and employees can make a claim under the Work Injury Compensation Act (WICA) for accidents that occur at work. Employers often also provide Term Life, Personal Accident, Critical Illness and Outpatient Medical cover in addition to Hospital and Surgical insurance. Pre-existing medical conditions are generally excluded from coverage.
Work Injury Compensation
This covers the employee for injuries resulting from work related incidents. All employees and workers can make claims under the Work Inury Compensation Act. All manual workers (regardless of their income) and all other workers earning less than SGD1,600 per calendar month are required by law to be insured under WICA. This is a statutory requirement and heavy fines are levied on employers who do not fulfil this obligation. Employers are also exposed to common law liability under the tort of negligence. We recommend that all employees insure their liabilities under common law and the Work Injury Compensation Act under a locally issued WICA policy with a limit of SGD10,000,000.
Hospital and Surgical
This covers in-patient hospital treatment and associated charges, generally for the insured employee and his/her dependents. It may also cover certain out-patient treatment and procedures such as X-ray or CT scan costs. Minimum coverage of SGD 5,000 is required, according to MOM rules. From 1 January 2008, employers are required to purchase insurance for the medical expenses of all new foreign domestic workers and for existing foreign domestic workers upon renewal of their work permits. The medical insurance has to be maintained during the workers' stay in Singapore, until repatriation, and is a pre-requisite for the issuance of Work Permits/Employment Passes.
This covers the insured employee for accidents that cause death or severe injury. Coverage is between 1-3 times annual salary. Personal accident plans also usually cover disability that renders the employee incapacitated, and includes loss of both eyes, or any two limbs, or one limb and one eye.
This insurance covers the insured employee for certain types of critical illnesses, like cancer and diabetes, and pays a lump sum benefit upon the diagnosis of the dread disease.
This covers the insured employee for death and for total permanent disability while in the employment of the insured. Coverage is usually worked out as 1-3 times annual salary.
This covers employees that suffer an accident or illness that renders the employee unable to work in his / her current occupation. The coverage currently has a 3% market penetration rate in Singapore.
Group Travel Insurance
This covers those employees that are travelling abroad for business.
Central Provident Fund
On 1 July 1955, the Government of Singapore introduced the CPF scheme, a compulsory comprehensive social savings security plan administered by the Central Provident Fund Board, a statutory board
under MOM. The scheme aims to provide working Singaporeans with a sense of security and confidence in their old age. Employee's contribution is typically 20% of salary and employers contribution
14.5%, subject to maximum monthly contributions. Working Singaporeans and their employers make monthly contributions to the CPF and these go into three accounts:
1) Ordinary Account - For Housing, Insurance, Investment and Education needs. Workers are allowed to use their CPF savings for purchasing a private property under the Residential Properties Scheme (RPS), or flats built by the Housing and Development Board (HDB) under the Public Housing Scheme (PHS)
2) Special Account - For investment in retirement-related financial products, like annuities. Members are required to set aside a minimum sum in their CPF at age 55; the current 2009 minimum sum is SGD 106,000. At age 62 onwards, monthly payments are made from the CPF scheme to the CPF account holder to help meet their basic needs in retirement. If a life annuity is purchased with the CPF Minimum Sum, the member will receive the monthly income for life. If the CPF Minimum Sum is left with the CPF Board or a participating bank, the member will receive monthly income until the Minimum Sum is exhausted.
3) Medisave Account - for Healthcare needs. It can be used for hospitalisation, certain outpatient treatments and approved medical insurance needs, i.e., MediShield, ElderShield and MediFund. These insurance schemes are in place to ensure that all Singaporeans have access to medical care. Depending on age, every employee contributes between 6%-9% of his/her monthly income to the scheme. The Medisave scheme also requires minimum amounts to be set aside for sickness whilst the individual is elderly.
This is a low cost catastrophic illness insurance scheme designed to help members meet medical expenses from major illnesses which could not be sufficiently covered by their Medisave balance. MediShield operates on a co-payment and deductible system.
This is an endowment fund set up by the Government to help needy Singaporeans who are unable to pay for their medical expenses and who have exhausted all other means to pay their medical expenses. MediFund acts as a safety net for those who cannot afford the subsidised bill charges, despite Medisave and MediShield coverage.
This is an affordable severe disability insurance scheme designed to provide basic financial protection to those who need long-term care, due to severe-disability in old age. It provides a monthly cash payout to help pay the out-of-pocket expenses for the care of a severely-disabled person. The Ministry of Health has appointed 3 private insurers to run ElderShield: Aviva, Great Eastern and NTUC Income. The premiums can be paid using Medisave. Singapore Citizens and Permanent Residents (PRs) with Medisave accounts are automatically covered under ElderShield at the age of 40. Premiums are payable annually until the age of 65. There are two ElderShield plans currently: The ElderShield300 plan, which pays out SGD300 per month for up to 60 months and the ElderShield400 plan, which pays SGD400 per month for upto 72 months. As an ElderShield policyholder, the individual will be able to claim benefits at any age for the rest of his / her life once he/she has paid the premiums.
Leave and Holidays
All female employees including PR's and expats who have served their employer for 3 months or longer are entitled to 16 weeks maternity leave under the Children Development Co-Savings Act provided the child is a Singapore Citizen; 4 weeks immediately before and 12 weeks immediately after delivery. An employer is prohibited from dismissing an employee who is on maternity leave. An employer who does so will be liable to a fine and/or imprisonment. In addition, the employee is also entitled to a 6-day child-care leave if the child is a Singaporean Citizen aged 7 years or less on 31 Oct 2008, or 2 days otherwise.
An employee covered under Part IV of the Employment Act who has worked for at least three months is entitled to annual leave of at least 7 days in the first year of employment.
Marriage, paternity and compassionate leave entitlement
There is no statutory entitlement to such leave under the Employment Act. The entitlement to such leave therefore depends on what is in the employment contract or agreed mutually between employer and employee.
Central Provident Fund
Ministry of Health
Ministry of Manpower
Ministry of Education
Ministry of Finance
Health information for Expats
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