Why this 66 year old would rather forego a $50 pay raise

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When the National Wages Council accepted a proposal by the National Trades Union Congress (NTUC)) to give a $50 pay hike to workers earning less than $1,000, many among these low-wage earners cheered.

But not this 66-year-old cleaner. Instead, the proposition worried her.

Madam Tan (not her real name) said she had actually turned down a pay increase offered by her company last year.

She earns $800 a month and lives in a one-room rental flat. She said the raise would have pushed her into a higher salary bracket, causing the rent of the flat to go up from $26 to $111.

According to HDB's website, those earning between $801 and $1,500 will pay rent of between $90 and $123, instead of the $26 to $33 that those earning below $801 pay.

"It's not that I don't want to earn more and pay higher rent, but maybe the (rent) increase could be smaller," Madam Tan said.

"I'm very thankful that the authorities are giving this increase, but I'll be $35 worse off."

The divorcee, who has been a cleaner for 10 years, lives alone. Her two children, who are in their 40s, are unable to support her, she told The New Paper.

Social workers told The New Paper that many others have fears similar to Madam Tan's.

But responding to queries from TNP, HDB said that it exercises flexibility to make sure that those getting a pay increase don't end up worse off because of higher rent.

Madam Tan's current lease expires in January next year.

So what will her rent be if she renews her tenancy?

An HDB spokesman said: "Based on Madam (Tan's) last reported income in February 2011... Her rental fees will remain at the same rate of $26 per month, since her increased household income would still be below $800."

The HDB spokesman added that even if Madam Tan's household income exceeds $800, her rent may not go up to $111 (as Madam Tan claims).

Said the spokesman: "HDB does exercise flexibility to ensure that any rental increase will not result in a worse-off situation for the tenant."