Tue, Jan 10, 2012 - Page 8 News List

Minimum wage hike hurts some households

By Wang Yu-ling 王幼玲

On Jan. 1, the government raised the monthly minimum wage, but just as workers were about to start cheering, some households suddenly found that they have lost their status as low-income households.

Taiwan is not a social welfare state, but employs a system of “work welfare.” To avoid creating dependence on welfare subsidies, Article 5-1 of the Public Assistance Act (社會救助法) states that a salary — a so-called “virtual income” — shall be calculated for those who are capable of working, but are unemployed.

The calculation for this virtual income moves with the base salary, but for those between the ages of 16 and 20, as well as those between the ages of 60 and 65, the calculated income shall be 70 percent of their virtual income.

The calculated income for the physically or mentally challenged shall be 55 percent of their virtual income.

Let us use an unemployed physically or mentally challenged person as an example.

In the past, when the monthly minimum wage was NT$17,880, their calculated wage would be NT$9,834. With the exception of Kinmen and Lianjiang counties, the figure did not exceed the publicly announced lowest living expenses in any area in Taiwan.

Now that the monthly minimum wage has been increased by 5.03 percent to NT$18,780, the virtual income of an unemployed physically or mentally challenged person has been increased by NT$495, to NT$10,329.

This is more than NT$10,244, the publicly announced lowest living expenses in Taiwan Province and in Greater Tainan, and NT$10,303, the publicly announced lowest living expenses in Greater Taichung.

In other words, physically or mentally challenged people in these three areas have lost their low-income status simply because their virtual income has exceeded the lowest living expenses by NT$26 or NT$85. This places them in a difficult situation because they will no longer be eligible for government subsidies.

The Public Assistance Act includes rules for excluding someone who cannot find work from those who are capable of working, but these regulations only apply to someone who has had a permanent employer.

If these unemployed people can provide proof of unemployment to a public employment service center within two years, and if they are unable to find work, they are entitled to receive unemployment payments and to be excluded from those who are capable of working.

Someone who has insurance with a professional association — 4 million people are not covered by the Employment Insurance Act (就業保險法) — or someone who has been unemployed for more than two years will be determined to have a salary regardless of whether they are employed or not — the virtual income mentioned earlier.

This design is contradictory. Even as such disadvantaged groups as workers in atypical employment, those in long-term unemployment, and physically and mentally challenged individuals come under greater pressure, it becomes more difficult to provide care for those in need through Taiwan’s social security system.

Wang Yu-ling is secretary-general of the League of Welfare Organizations for the Disabled.

Translated by Eddy Chang

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