SINGAPORE — A team of researchers in Singapore has calculated the minimum household budget needed for a single elderly person aged 65 and above to get by, and it comes up to $1,379 a month.
For an elderly couple aged 65 and above, the budget comes up to $2,351 per month. For single persons aged between 55 and 64, the budget is $1,721.
Minimum Income Standard research method
The research team, led by Assistant Professor Ng Kok Hoe from the Lee Kuan Yew School of Public Policy, derived their answers by conducting focus group discussions involving over 100 participants.
The participants included people who lived in rental flats as well as private property, and a larger representation of some groups, such as minorities and women, to ensure a diversity of views.
Using the Minimum Income Standard (MIS) research method first developed at Loughborough University, participants generated lists of basic-needs items and services related to housing and utilities; things needed in a two-room HDB flat; personal care items and clothing; food; transport; leisure and cultural activities; and healthcare.
Left out of the lists were things deemed extravagances, like air-conditioning and a car. From these lists, the household budgets necessary to meet those basic needs were determined.
"This study reveals that ordinary members of society can come to a consensus about a basic standard of living in light of norms and experiences in contemporary Singapore,” Dr Ng said in a media release on the qualitative study on Wednesday (22 May).
“Such income standards can help by translating societal values and real experiences into unambiguous and substantive benchmarks that policy can aim for."
Key findings from research
Other key findings from the research include:
A definition for basic standard of living: There is a consensus among participants that a basic standard of living goes beyond just housing, food and clothing. It is also about having opportunities to education, employment, and work-life balance, as well as access to healthcare. Participants feel that a basic standard of living enables a sense of belonging, respect, security, and independence.
Prominent differences in healthcare and recreation/culture expenditures: As the study is based on the assumption of good health, the percentage of actual expenditures on health among retired households is much higher than in the budgets derived from the study, which do not account for the cost of treatment for chronic conditions and major illnesses. Also, the budgets derived from the study have much larger recreation and culture components than in actual expenditure, reflecting the participants’ strong emphasis on social participation needs and that such needs may not be fully met among the current older population.
Budget vs income: In 2017, the median monthly work income of full-time workers aged 60 and above was $2,000, about 1.5 times the derived budget for meeting basic standards of living among single elderly households. However, for older people working as cleaners or labourers, their median monthly incomes fall below the derived budget ($1,200, or 0.9 times of the budget). This means that, for some elder people, employment alone does not ensure the achievement of budgets for basic standards of living.
Access to government income measures is not assured: A range of government income measures target older persons who are either in employment, retired with Central Provident Fund (CPF) incomes, or retired with low incomes. Coverage depends on many factors such as the individual’s occupation, amount of CPF savings, and qualification through means tests. The study says that CPF retirement sums remain theoretical targets for many older people. Even for people who are covered, the total sums they stand to receive fall short of or just reach the household budgets required to meet basic needs.
Heavy dependance on family contributions
The study said that the overall picture of elderly income in Singapore is one of heavy dependence on family contributions with limited support from the state.
The most common income source is adult children (78 per cent of elderly people reported such income in 2011), followed by wage work (21 per cent), and the CPF or other annuities (13 per cent). Other sources such as private pensions (4 per cent) and public assistance (2 per cent) are negligible in terms of coverage.
“Due to rapid socioeconomic development, current cohorts of older people have steep educational and skill disadvantages compared to younger workers,” the study added.
“When work incomes and wage interventions fall short, some older people either do not have the means to ever retire or will be permanently dependent on public and informal transfers.”
Gaps in capacity to meet basic standards of living
The study said that the gaps in people’s capacity to meet basic standards of living must be urgently addressed. This is so that all older people in Singapore can achieve what its participants describe as basic needs for “a sense of belonging, respect, security, and independence”.
Associate Professor Teo You Yenn of Nanyang Technological University’s School of Social Sciences, another member of the research team and author of the best-selling “This Is What Inequality Looks Like”, said in the media release, “To tackle inequality, it is critical to establish an agreed floor below which no one should fall.
“The MIS method can be usefully applied to generate societal consensus across a range of household types.”
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