The Workfare Income Supplement (Workfare) Scheme provides incentives for older low wage workers to find work and stay in work, while at the same time helping them to save for their longer term needs.

Workfare complements the changes to the CPF scheme that came into effect on 1 July 2007 where the employer's CPF contribution rate was increased by 1.5 percentage points. This CPF increase did not apply to older low wage workers in order to help them cope with the effects of wage stagnation and structural unemployment as a result of global competition.

Instead, they received a reduction in employer CPF contributions to help improve their employability and a reduction in employee CPF contributions to increase their take-home pay. Workfare helps older low wage workers to make up for the reductions in CPF contributions.

Please refer to the Ministerial Statement delivered on 17 September 2007 for more details on the higher Workfare payments for workers aged above 55 and other CPF changes.