Limited tax liability, challenges beyond funds could constrain senior work recommendations: observers

The Singapore government has approved six recommendations for senior employment, with the aim of improving working conditions and encouraging career longevity among older workers. The proposals encompass various measures, including raising retirement and re-employment ages, introducing flexi-load jobs, providing wage credits, and offering tax breaks.

However, experts caution that these recommendations face potential challenges, such as limited scopes and unintended consequences, which may hinder their effectiveness. Kim Seonghoon, an economics professor at Singapore Management University, notes that while the package combines legal protection with flexibility and incentives, the enhanced Earned Income Relief (EIR) for older workers may have a limited impact on labour supply, as many lower- and middle-income older workers would derive little or modest additional tax savings.

Instead, Prof Chia Ngee Choon proposes an employment continuation credit, which would provide a direct income transfer to encourage older workers to remain economically active beyond the statutory retirement or re-employment ages. The Flexi-Load Programme, which supports employers in developing and implementing flexible work arrangements for employees aged 50 and above, is also highlighted as a relevant measure.

However, experts point out that the programme's effectiveness may be constrained by fixed costs per worker and the limited applicability of lower-wage roles to higher-skilled, higher-value-added jobs. Additionally, emerging technologies and changes in employment regulations and frameworks may play a crucial role in retaining knowledge and workflows, as well as addressing the unique needs of flexible work arrangements.