The Singapore government will increase Central Provident Fund (CPF) contribution rates for those aged above 55 to 65 by 1.5 percentage points in 2026, said Finance Minister Lawrence Wong in his Budget speech on Tuesday (Feb 18).
This is in line with the recommendations of the Tripartite Workgroup on Older Workers. The government will also continue to provide the CPF Transition Offset to employers for another year, to cover half the increases in employer contributions for 2026.
The increase should ease some of the anxiety senior workers face over retirement adequacy, especially those from the lower-income tier, said Marcus Kok, principal pension consultant at PwC Asia Actuarial Services.
Furthermore, the Senior Employment Credit (SEC) will be extended by a year to end-2026, to continue supporting the employment of senior workers. The SEC provides wage offsets to employers who hire Singaporean workers aged 60 and above and earning under S$4,000 a month. It was due to lapse after Dec 31, 2025.
Wong, who is also the prime minister, noted that more seniors are staying employed as the population ages. The government will raise the qualifying age for the highest SEC wage support tier to 69, from 68 years old currently, in line with the increase in the re-employment age.
The government will thus reimburse companies up to seven per cent of the wages that they pay to workers 69 and above. Those aged 65 to 67 will get a four per cent reimbursement, and those aged 60 to 64, two per cent.
In the past two years, there have been various forms of assistance to support its citizens with immediate cost-of-living concerns, with more help expected at the upcoming Budget, he says.
Kok Ping Soon, chief executive of the Singapore Business Federation, said this would help businesses with wage costs, which is key to mitigating the impact of rising business costs, amid global uncertainties.
Looking ahead, businesses must also continue to invest in productivity and workforce transformation to strengthen Singapore’s long-term economic resilience. Meanwhile, the government will encourage employers to give ex-offenders a second chance by extending the Uplifting Employment Credit (UEC) to the end of 2028.
The UEC provides wage offsets to employers hiring local ex-offenders earning below S$4,000 and were released within three years before employment. It was due to lapse after Dec 31, 2025.
This will continue providing employers with a wage offset of up to 20% of a local ex-offender’s wages for the first nine months of employment, capped at S$600 for each employee. – The Strait Times
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