Auto-deduct self-employed’s Medisave?


How many people are behind on their Medisave contributions?

I refer to the article “Freelancers may get help with payment disputes, insurance” (Straits Times, Feb 22).

It states that “The group also noted that one in four freelancers falls behind on Medisave contributions, despite the risk of penalties. They are required to contribute to their Medisave accounts for the previous year’s work.

It wants companies that buy services to pay a portion of the fees directly into the freelancers’ Medisave accounts.”

This may further reduce the net take-home income of some of the self-employed, who may have difficulty paying their Medisave contributions.

How many people have, or ever had problems paying their Medisave contributions and are in arrears?

2004 – 144,000 owed $413m?

I believe the last time that the statistics were reported in the media, if I remember correctly – it was 144,000.

– “By 2004, the number of self-employed in arrears of medisave payment has ballooned to 144,000 with a large outstanding sum of $413 million”.

Medisave changes cause more hardship?

Over the years, the following changes may have increasing made the lives of self-employed persons harder:

  • … increase in Medisave contribution rate from 6 to as much as 10.5 per cent now
  • … those who can’t pay cannot renew their vocational licence – like taxi drivers, real estate agents, etc
  • … even those who earn as little as $6,000 a year are required to contribute to Medisave


Spend $0 on healthcare?

So, when the Government

  • … from a cashflow perspective does not spend any money on healthcare, CPF and HDB
  • … has the lowest public healthcare spending as a percentage of GDP among developed and developing countries, at just 2.2 per cent
  • … has the lowest public share of total healthcare spending among developed and developing countries, at just 33 per cent
  • … has the most profitable national health insurance schemes in the world – ElderShield, Medishield Life, etc

Financial stress due to Medisave?

– the financial stress may not just be on Singaporeans and their family members when they fall ill, but also on the hundreds of thousands of people who at some point in their working lives may have difficulty in paying their Medisave contributions to renew their vocational or business licence.

Singaporeans abroad for years also kenna?

And the stress may also be on Singaporeans living abroad as well – please read the article “Medisave – pay up or be charged?” (theonlinecitizen, July 28, 2010)

– “Several Singaporeans living overseas and in Singapore have contacted The Online Citizen to tell us that they have received letters from the CPF Board asking them to pay their CPF Medisave arrears, incurred many years ago”.

As to “In proposing this, it took its cue from Chile, which is making it mandatory from next year for a portion of freelancers’ fees to be earmarked as pension contributions” – the scheme in Chile goes into their pensions – not into an account (Medisave) that can only be used for paying approved medical expenses and insurance premiums!

Leong Sze Hian



About the Author

Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.