As BBCW advocates, this is not unemployment insurance since staying unemployed without any disability is a choice.
I’m not sure “advocates” is the right word as phrased. I merely point out that DII is not UI (Unemployment Insurance).
Yes, I advocate understanding how much unemployment a DII policy will tolerate. Zero is not desirable. However, the DII provider fears a moral hazard problem in this area, and some of that fear is justifiable. Consequently they all set some limits.
Staying unemployed is
currently a choice in Singapore, where labor markets remain tight at least by global standards. It’s reasonable to predict that’ll continue since the government could simply ratchet down employment passes and work permits if/when necessary. Underemployment is harder to avoid, but DII providers don’t have any problem with underemployment as long as the DII is still at 75% or less (or 50% with the MINDEF/MHA rider).
Singapore doesn’t have universal (or near universal) UI, like many other countries do. The government argues that UI is unnecessary for the reasons I’ve just explained. I happen to disagree with the government. One possible approach would be to allow CPF members to borrow $600/month (2019 dollars) from their own Ordinary Accounts when involuntarily unemployed. OA borrowing could start 2 months after last day of employment, and total borrowing could not exceed 10 months ($6,000 in 2019). OA could still be used to service a mortgage. IRAS could automatically restore those OA funds (with accrued interest) via income tax assessments, or a CPF member could repay themselves earlier. Something like that seems quite reasonable to me, along with some minimum standards for notice or severance in lieu of notice.
A few private insurers used to offer UI, and there’s still a very little bit of UI available in Singapore. But it’s pretty awful. Maybank, for example, sells “EverEase,” which is a package of mostly ridiculous “insurance” including $500/month for up to 3 months in the event of retrenchment. A startup company called Bandboo introduced peer-to-peer UI a couple years ago, but I don’t know if they’re still around.
One thing you could do if you’re long-term unemployed (but not due to disability), and if your DII is about to lapse: buy the patchwork of Critical Illness and Personal Accident insurance at that point in time and in that set of circumstances, if that’s the best you can do. Generally I would recommend you find
some job that generates an income since the income is obviously useful, in addition to keeping your DII in force, but if that’s how you want to roll in Singapore, you can.
