This declaration of indebtedness is meant to ensure that civil servants remain of good financial standing and helps the Public Service know whether an officer becomes vulnerable due to financial embarrassment. The intention is meant to protect the officer (and by extension the Public Service) and is not meant to penalise the officer.
An officer is considered to be financially embarrassed if he or she has defaulted in repayment of loans, credit facilities and liabilities for 3 consecutive months.
Other situations where one is financially embarrassed also include being an undischarged bankrupt or where one takes a loan outside certain categories.
So this means that if one has not been making payments for credit card bills for 3 months consecutively, one will be considered financially embarrassed. Or if one has borrowed from a money lender, one will also be considered financially embarrassed.
So a civil servant must be careful to take only secured loans like housing or car loans. Other loans such as education loan, renovation loan is also allowed. Unsecured loans like balance transfer or credit cards must be capped at 3 months salary.
A civil servant who is financially embarrassed must declare.
Check out other posts related to the civil service:
3. Credit Checks and Credit Bureau in Singapore (Bet you did not know that your credit report is actually available and compiled by certain agencies)
Civil servants in Singapore, like anyone else, can experience financial difficulties due to a variety of reasons, such as job loss, medical expenses, or overspending. While the job security and steady income that comes with being a civil servant may provide some financial stability, it is still important to practice good financial management and plan for unexpected events.
To avoid financial embarrassment, civil servants in Singapore can take the following steps:
Budgeting: Create a budget and stick to it, to ensure that expenses do not exceed income. This can help to avoid overspending and build up savings for unexpected events.
Debt Management: If necessary, seek help to manage debt and prioritize repayments.
Savings: Build up emergency savings to cover unexpected expenses, such as job loss or medical expenses.
Investment: Consider investing in diversified portfolios to grow wealth over the long term.
Financial Planning: Seek professional advice to develop a comprehensive financial plan that takes into account one's current financial situation, goals, and risk tolerance.
In conclusion, financial embarrassment can have a negative impact on personal and professional lives. Civil servants in Singapore, like anyone else, should be concerned about financial embarrassment and take steps to avoid it, such as budgeting, debt management, savings, investment, and financial planning.
So if a civil servant wnts to take up margin loan with his online broker, using his equities as collateral. It is a secured loan, but if it exceed 3mnth gross, it's still considered not allowed ?
ReplyDeleteTypes of loans allowed
ReplyDeletePublic officers are specifically limited to loans from three categories:
A. Secured loans and credit facilities e.g. housing and car loans
B. Special category of unsecured loans and credit facilities
e.g. education-related loans, renovation loans, loans from co-operatives
C. Unsecured loans, credit facilities and liabilities capped at 3 times monthly salary e.g. lines of
credit, credit card facilities. Officers are not allowed to borrow from licensed moneylenders.
Financial embarrassment
ReplyDelete19.—(1) An employee who is financially embarrassed or who makes a false declaration of non-indebtedness renders himself liable to disciplinary proceedings which may lead to his dismissal from the service of the Board.
(2) An employee shall be deemed to be financially embarrassed if —
(a) he is an undischarged bankrupt;
(b) he signs a promissory note or an acknowledgment of indebtedness in contravention of rule 18(3); or
(c) at any time the total of his unsecured debts and liabilities exceeds 3 months’ emoluments.
(3) An employee who is reported to be a judgment debtor by the Official Assignee or the Registrar of the Supreme Court or the Subordinate Courts shall be deemed to be financially embarrassed.
(4) The Head of Department shall ensure that every employee employed in his department makes a declaration on the requisite form as to whether or not he is free from financial embarrassment, on the following occasions:
(a) on his first appointment to the service of the Board;
(b) before he is emplaced on the permanent establishment; and
(c) annually on 1st July for the preceding one-year period, and that declaration shall be completed within the first 3 weeks of that month,
and filed in the employee’s personal file.
Use Credit Bureau to check credit rating of civil servants
ReplyDelete