1. What is the rationale for increasing the minimum compensation coverage for personal accident insurance for foreign domestic workers?
With effect from 1 July 2008, Ministry of Manpower (MOM) will be raising the minimum coverage of the personal accident insurance for foreign domestic workers from $10,000 to $40,000. This is part of the broader review of work injury compensation for all employees. It will apply to all new applications for foreign domestic workers submitted from 1 July 2008 onwards. For existing foreign domestic workers, the requirement will apply as long as their Work Permits expires on or after 1 July 2008.
2. Why is the minimum compensation coverage for personal accident insurance increased from $10,000 to $40,000 and not another quantum?
The increase in the minimum compensation coverage for personal accident insurance from $10,000 to $40,000 takes into account the cost impact on employers while enhancing the protection for foreign domestic workers. The quantum also reflects that unlike workmen's compensation, personal accident insurance provides for compensation in the case of permanent disablement or death regardless of whether or not the accident occurs as a result of work.
3. What is the cost impact to employers of foreign domestic workers with the increase in minimum compensation coverage for personal accident insurance?
With the increase in minimum compensation coverage for personal accident insurance, the cost is estimated to increase by about $30-$50 for a 2-year employment term.
4. Why is MOM increasing the minimum compensation coverage for personal accident insurance for foreign domestic workers when employers are now also required to purchase medical insurance for their foreign domestic workers?
The personal accident insurance will complement the existing medical insurance for foreign domestic workers. While the medical insurance requirement provides basic cover for medical expenses, including hospital bills, the personal accident insurance covers accidental death and permanent disablement. Any compensation payable will be made to the foreign domestic worker or her beneficiaries.
5. Why does the requirement for increasing the minimum compensation coverage for personal accident insurance from $10,000 to $40,000 take effect from 1 July 2008 when the requirement for compulsory medical insurance for foreign domestic workers takes effect from 1 January 2008?
The increase in minimum compensation coverage for personal accident insurance is in tandem with the broader review of the work injury compensation for all employees.
Separately, with MOH's withdrawal of hospital subsidies for all foreigners from 1 January 2008, it would be necessary to effect the requirement for compulsory medical insurance for foreign domestic workers from 1 January 2008 to ensure that potentially high medical bills continue to remain affordable for employers.
6. I have already purchased personal accident insurance for my existing foreign domestic worker. Do I need to purchase a new personal accident insurance policy now?
Employers will only need to purchase a new personal accident insurance policy with the new minimum coverage of $40,000 upon renewal of the existing Work Permit, as long as the Work Permit expires on or after 1 July 2008.
7. If I apply for my foreign domestic worker on 1 June 2008 but only bring her in after 1 July 2008 (since the “letter of notification to bring FDW into Singapore” is valid for 3 months), do I have to meet the new $40,000 minimum coverage for personal accident insurance?
The new minimum coverage of $40,000 is only applicable for new applications for foreign domestic workers submitted from 1 July 2008 onwards. Hence, if you apply for the work permit of the foreign domestic worker before 1 July 2008, i.e. on 1 June 2008, the new minimum coverage will not be applicable to you. However, you are still encouraged to cover your foreign domestic worker with the new minimum PAI coverage.
8. My foreign domestic worker's Work Permit expires on 2 July 2008. If I renew her work permit on 3 June 2008, do I have to meet the new $40,000 minimum coverage for personal accident insurance?
The new minimum PAI coverage of $40,000 will be applicable as long as the Work Permit expires on or after 1 July 2008, regardless of when it is renewed.
Source: MOM Website
