Prime Minister Lee Hsien Loong said in a speech that the plan - which involves payments to the working poor to encourage them to stay employed - will stay.

The "workfare" program was introduced earlier this year, ahead of general elections, as a one-time set of two payments to 330,000 low-wage and older workers, with one payout earlier this year and another set for next May.

The plan will "ensure that we will systematically support and protect low-income Singaporeans," Lee said at a conference Sunday of the ruling People's Action Party, according to a text of his speech released Monday by his press secretary.

He said the government would probably take three years to fine-tune the program.

"For every dollar you earn through your own efforts, the government will give you something to match," Lee said, without giving details about the amount.

Part of the payments will be in cash, but most will be channeled into the national pension fund for housing, health care and retirement, he said.

Lee said the program, details of which will be announced Feb 15 as part of the city-state's annual budget, is to be funded by increased revenue from a proposed sales tax hike from 5 percent to 7 percent next year.

Lee - who is also finance minister - acknowledged that the proposed tax increase was unpopular, but said it will help pay for social programs by adding S$1.5 billion (US$970 million; €733 million) a year to Singapore's coffers.

The move represents an effort by the ruling party to tackle a problem that opposition party members and government critics have highlighted: a growing rich-poor income disparity in the island republic of 4.3 million people, where some struggle financially despite Singapore's status as a high-tech manufacturing center.

The Straits Times newspaper said party members at the conference hailed the program "as a fundamental shift in government thinking, one that acknowledges that there will be those who need continuing help even as the economy as a whole does well."

Singapore's Manpower Ministry, which handles labor issues, recently said Singapore's income gap would keep widening due to globalization-linked pressures.

Between 2000 and 2005, incomes in Singapore's wealthiest households increased at a 2.8 percent annual rate, while they declined in the poorest households, according to the government's most recent survey.

The government did not release income figures for the lowest one-tenth of society, but incomes fell by an annualized 4.3 percent in the second-lowest decile and 0.5 percent in the third lowest.

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