S$10,000 CPF top-up extended to more ITE graduates who obtain diplomas

SINGAPORE: More students will now benefit from two financial incentives meant to encourage Institute of Technical Education (ITE) graduates to further their studies.

A S$10,000 (US$7,400) Central Provident Fund (CPF) top-up, which was initially for ITE graduates aged 30 and below, will now apply to those above 30 – if they are enrolled in a diploma programme as of Friday (Mar 1). The students will receive the top-up in their Ordinary Accounts when they obtain the diploma.

A S$5,000 top-up in their post-secondary education accounts when they enrol in a diploma programme, initially also meant for ITE graduates aged 30 and below, will be extended to those aged 31 if they enrol this year.

The financial incentives – which together make up the ITE Progression Award – were first announced by Deputy Prime Minister and Finance Minister Lawrence Wong in his Budget speech in February. 

The extension of the new incentives, which will benefit about 1,500 more ITE graduates, is for this year only.  

“Upskilling to a diploma can help ITE graduates secure a better starting pay, and a better lifetime earning trajectory through their improved skills and competencies,” said Minister for Education Chan Chun Sing in parliament on Friday. 

To qualify, ITE graduates have to be Singaporean and enrol in diploma programmes with institutes of higher learning funded by the Ministry of Education (MOE).

Those who take up the ITE work-study diploma will have their course fees borne by their employers, and so will not qualify for the S$5,000 top-up. However, they will be eligible for the S$10,000 CPF top-up when they complete the diploma programme.

An ITE graduate who pursues a part-time polytechnic diploma will not need to pay any fees out of pocket after using the S$5,000 top-up, said Mr Chan. 

The S$10,000 top-up to their CPF Ordinary Account can give them a headstart in buying their first home or saving for retirement, he added. 

The age cutoff for the award was set at 30 to encourage ITE graduates to pursue a diploma earlier and reap the benefits of better career opportunities over a longer term, said the Education Ministry. 

With the cutoff at age 30, ITE students can enter the workforce for two years after graduation and then choose to pursue a diploma, it added. “We think that does give them enough runway to make that decision.” 

Over 7,000 eligible ITE graduates are expected to enrol in diploma programmes this year, said the ministry. The incentives are expected to cost the government at least S$105 million per year, which could grow depending on the take-up rate. 

About 13,000 students graduated from ITE each year for the past five years. More than one in three students from the 2022 cohort enrolled in a diploma programme immediately after graduation, up from one in four in 2018. 

Some ITE graduates opt to work before furthering their studies, MOE said, adding that about one in two obtain at least a diploma within 10 years of graduating from ITE. 

From 2012 to 2022, the median real gross monthly salary of ITE graduates increased by S$310.

The gap in median real starting salaries between ITE and polytechnic graduates increased from S$560 in 2012 to S$600 in 2022, while that between ITE and university graduates increased from S$1,780 in 2012 to S$2,130 in 2022.

Obtaining a diploma narrows this gap and helps ITE graduates secure more job opportunities, said MOE.