Singapore’s Senior Work Proposals Face Limits on Tax Relief and Flexible Jobs

Singapore’s package of six recommendations to extend working lives combines changes to retirement and re-employment ages with employer support, wage credits and tax relief. Its reach will depend on whether those measures change hiring and work choices, experts say. Tax relief may offer little to many lower-earning seniors, while funding alone may not resolve the practical barriers to creating flexible roles.

The recommendations, released on Oct 26 and approved for implementation, cover different groups and approaches. Singapore Management University economics associate professor Kim Seonghoon described the combination of protections, flexibility and incentives as a sound approach. National University of Singapore economics associate professor Chia Ngee Choon likewise noted that the proposals include measures for employers as well as workers, with the worker measures aimed at different groups.

Tax relief may have a narrow reach

The proposed increase to Earned Income Relief (EIR) is intended to reduce older workers’ tax bills and raise their take-home pay. The relief is calculated using a worker’s age and taxable earned income. Chia cautioned, however, that its value as an incentive to keep working could be limited.

Her concern is the distribution of earnings among older workers. Earnings fall substantially with age, she said, and the share of older workers earning at least S$5,000 a month also declines sharply. Workers with lower incomes may have little or no personal income tax to offset, leaving them with little benefit from enhanced relief. Those in the middle-income group could receive only modest additional savings.

Higher earners could gain more in dollar terms, but may be less reliant on a tax break when deciding whether to remain employed. Chia therefore expects the change to have limited influence both on whether older people continue working and on how many hours they choose to work.

She suggested considering an employment continuation credit instead. Designed as a direct income transfer, like the Workfare Income Supplement, it could reward people who remain economically active past the statutory retirement or re-employment ages, including those who owe no income tax. Payments could vary with earnings and possibly hours worked, with stronger incentives for middle-income workers whose decisions may respond more to extra income.

That approach would bring fiscal costs, Chia acknowledged, and would need to be weighed against other forms of support. She also pointed to job redesign, workplace flexibility, skills upgrading and employability as ways to tackle structural obstacles to longer careers, rather than relying mainly on financial rewards.

Making reduced-load work workable

The Flexi-Load Programme is aimed at employees aged 50 and above. It provides employers with funding to help cover the transitional costs of designing and putting flexible-load arrangements in place. The need is visible in labour force participation, which begins to decline more sharply among Singapore residents in their late 50s.

Among people aged 50 to 59 who were outside the labour force in 2025, the most commonly reported reasons were housework or caregiving, at 52.6 per cent, and poor health, old age or disability, at 16 per cent. The workgroup said these patterns point to scope for better access to flexible arrangements, career planning and skills training for people who want to keep working.

Kim highlighted a basic cost problem: administration and other fixed costs per worker can make reduced-load positions harder for employers to offer. Singapore University of Social Sciences economics associate professor Walter Theseira added that the programme responds to a changing group of senior workers. Flexible work already exists, but often in lower-wage positions, such as clerical jobs with two-hour shifts at bakeries. Those roles may not suit the skills or expectations of more educated, higher-skilled workers entering this age group.

Many higher-value jobs have also been resistant to being split into smaller portions, Theseira said, partly because their tasks can be difficult to divide. Technology may help preserve knowledge and work processes when duties pass between workers on different schedules. Employers could also benefit from outside help to reorganise tasks, but Theseira said the challenge reaches beyond what a funding programme can solve. Practical models and case studies, including those developed through existing tripartite pilots with companies, could help employers work through the changes.

Theseira also called for closer study of how existing employment rules and frameworks apply to flexible arrangements, including what employers owe workers in those roles. He characterized the other recommendations largely as adjustments to measures already under way that remain worthwhile.

Measuring whether wage support adds jobs

For Kim, the Re-Employment Credit stands out. It will replace the Senior Employment Credit as wage support for employers that hire or retain workers past statutory age limits, and it will have a higher wage ceiling. The central test, he said, is whether the subsidy changes an employer’s decisions. Support that pays for a hire that would have happened anyway may not add employment.

Kim called for a credible comparison group to estimate how many jobs the credit creates or preserves. He also said the assessment should track hours, earnings and programme costs, as well as whether subsidised hires displace other workers. Those measures would help show who benefits and whether public spending produces additional employment.

Keeping older workers employed is only part of the challenge. Re-entry after job loss remains difficult: the six-month re-entry rate for retrenched residents aged 50 to 59 was 41.9 per cent, according to the manpower ministry’s second-quarter 2026 labour report. Kim said a planned review of the SkillsFuture Jobseeker Support Scheme could examine wage insurance, which temporarily replaces part of the earnings loss when displaced workers take lower-paid jobs.

Taken together, the proposals span tax treatment, employer costs, job design and support after displacement. Their effect will depend on whether each measure reaches the workers it is meant to help—and whether employers can turn funding into roles that fit both business needs and the skills of an ageing workforce.