The Singapore Budget 2020 (Unity Budget) announced on 18 February 2020, covers a range of new support measures for enterprises and individuals alike. This includes fresh initiatives to help enterprises and workers cope with the COVID-19 outbreak which brought about large economic uncertainties.
Update: Additional COVID-19 Support
On 17 Aug 2020, DPM Heng Swee Keat announced $8 billion of new support measures to extend support for companies and workers during this pandemic. The main updates are extension to the Jobs Support Scheme (JSS) up to March 2021 and the new Jobs Growth Incentive to provide firms with wage subsidies for new local hires.
Update: Fortitude Budget
On 26 May 2020, a third supplementary $33 billion budget was announced to help re-open the economy, recover and emerge stronger, as Singapore eases out from the circuit breaker in three phases. The main update for HR to take note of is the enhancement to the Jobs Support Scheme (JSS), hiring incentive for traineeships, foreign worker levy (FWL) waiver and rebates and deferment of higher CPF contribution rates. The details will be updated in the respective sections below.
Update: Solidarity Budget
On 6 April 2020, a second supplementary $5.1 billion budget was announced, to further help Singaporeans and businesses, due to the significantly stricter protective measures by the Government which led to widespread business disruption. A large part of this budget will be for enhancing the Job Support Scheme.
Update: Resilience Budget
On 26 March 2020, a $48 billion supplementary budget was announced, to help Singaporeans and businesses deal with the escalating coronavirus situation. This includes enhancements to previously announced Jobs Support Scheme, Wage Credit Scheme and more support for the sectors most hard hit by the coronavirus situation. The updates will be highlighted in the respective sections below.
What does HR need to know?
Out of the measures announced, a number of them concern manpower policies with a recurring theme of retaining and reskilling workers. This ranged from specific support to specific sectors directly affected by the COVID-19 outbreak to help them keep their workers employed, to enhancement of SkillFuture programmes to encourage reskilling of workers, to keep them relevant. The policies related to Human Resources and manpower are summarised below:
- Job Support Scheme
- Wage Credit Scheme
- Adapt and Grow
- SkillFuture Enhancements
- Senior Worker Support Package
- Enabling Employment Credit for Persons with Disabilities
- Change in Foreign Manpower Policy
- Solidarity Budget Update: Foreign Worker Levy Waiver and Rebate
- Resilience Budget Update: SGUnited Jobs and SGUnited Traineeships
- Resilience Budget Update: Increased Support for Productivity Solutions Grant & Enterprise Development Grant
- Additional COVID-19 Support: Jobs Growth Incentive
Job Support Scheme (JSS)
Employers will receive an 8% cash grant on the gross monthly wages of each local employee for the months of October 2019 to December 2019, subject to a monthly wage cap of $3,600 per employee.
Resilience Budget Update: Employers will receive a cash grant amounting to 25% of monthly wages for every local employee, capped at a monthly wage of $4,600, for 9 months. Affected sectors will receive additional support – the aviation and tourism industries, including hotels, travel agencies, tourist attractions, cruise terminals and operators and Meetings, Incentives, Conferences, Exhibitions (MICE) venue operators will receive 75% wage offset; Food & Beverages companies will receive a 50% wage offset at the same monthly wage cap.
Solidarity Budget Update: Employers will receive an increase wage support of 75% in April for all local employees. Besides raising the subsidies, the first JSS payout will be brought forward to April, with some firms to receive the first tranche in mid-April. The purpose of this enhancement is to encourage employers to keep paying their employees for the month that the circuit breaker measure is in place, rather than to put them on no-pay leave, or retrench them.
Fortitude Budget Update: As announced earlier when the circuit breaker was extended to 1st June, the increase in wage support to 75% for all local employees will extend into May. The JSS scheme will also be extended by one month to August 2020, bringing the total wage support under JSS to ten months. Support for Aug 2020 will be paid out in Oct 2020. While the circuit breaker eases in several phases, there will be employers who are not allowed to resume normal operations. Such employees will continue receiving 75% wage support beyond May, until they can resume normal operations or until August 2020. If operations resume in the middle of the month, pro-ration will apply. There will also be increased JSS support for affected sectors like aerospace, F&B, retail, marine and offshore, who will have enhanced base tier of support from 25% to 50% or 75%.
August 2020 Update: The JSS scheme will be extended to March 2021 from the current August 2020, with support levels varying among different sectors based on each sector’s projected recovery. The additional support will be paid out in March and June 2021. There are 3 tiers of support:
- Tier 1 – 50% wage support until Mar 2021: Aerospace, Aviation, Tourism, Built Environment (will move to Tier 2 after Oct 2020)
- Tier 2 – 30% wage support until Mar 2021: Arts & Entertainment, Food Services, Land Transport, Marine & Offshore, Retail
- Tier 3A – 10% wage support until Mar 2021: For all other sectors (except those under Tier 3B below)
- Tier 3B – 10% wage support until Dec 2020: For sectors that are managing well (biomedical sciences, precision engineering, electronics, financial services, information and communications technology, media, postal and courier, online retail, and supermarkets and convenience stores)
Any firm that continue to not be allowed to resume operations on-site will continue to receive Tier 1 support until they are allowed to re-open, or Mar 2021, whichever is earlier.
Wage Credit Scheme (WCS) *Enhanced*
Wage increases for local employees will be co-funded by the Government. WCS was first introduced in Budget 2013. It was subsequently extended in Budget 2015 and Budget 2018 to year support wage increases up to year 2020. While there was no announcement of extension of the scheme, enhancements were made to increase the amount of support for years 2019 and 2020.
- Increase in co-funding ratio: The co-funding ratios for 2019 and 2020 has increased from 15% and 10% to 20% and 15% respectively.
- Increase in qualifying gross wage ceiling: The qualifying gross wage ceiling was increased from $4,000 to $5,000 for both years.
Similar to JSS, employers do not need to apply for WCS. Employers will receive payouts automatically in the month of March after the qualifying year. Employers who benefit from additional wage credit arising from the Budget 2020 enhancements will receive a separate supplementary payout in the second half of 2020.
Resilience Budget Update: The additional payout will be brought forward from Sep to end-June 2020.
Adapt and Grow *Enhanced*
While the Government is hoping that enterprises affected by COVID-19 do not let their workers go, they also encourage enterprises to spend this this business lull period to enhance their systems, deepen their capabilities and also train and upskill their workers, to prepare for the recovery.
To this purpose, the Government has enhanced the redeployment programmes under Adapt and Grow for the specific sectors affected by the COVID-19 outbreak to help enterprises redeploy their workers.
Funding support duration for the following existing redeployment programmes will be extended from the current three months to a maximum of six months:
- Job Redesign Place-and-Train (PnT) Programme for Hotel Industry
- Job Redesign PnT Programme for Retail
In addition, WSG will introduce the following new programmes to support redeployment:
- Job Redesign PnT Programme for Food Services Industry
- Digital Marketing PnT Programme
- Professional Conversion Programme (PCP) for Meetings, Incentives, Conventions and Exhibitions (MICE), Attractions and Tour and Travel
- PCP for Digital Operations Talents for the Furniture Industry
- PnT Programme for Air Transport Coordinators
You can sign up for Adapt and Grow here.
SkillsFuture (SSG) Enhancements
Other than providing a $500 SkillsFuture Credit top-up to all Singaporeans, additional support is also provided to enterprises to train workers and redesign jobs for workers
SkillsFuture Enterprise Credit (SFEC)
Eligible employers will receive a one-off $10,000 credit to cover up to 90% of out-of-pocket expenses for supportable enterprise development and workforce transformation programmes. $3,000 of the SFEC will be reserved for workforce transformation programmes and the remaining $7,000 can be used on enterprise transformation programmes.
Here is the eligibility criteria for SFEC:
- Employers must have contributed at least $750 Skills Development Levy (SDL) in total in the preceding 12 months.
- Employers must have at least three Singapore Citizens/PR employed in each of the preceding 12 months.
You can view the list of supported programmes here.
Productivity Solutions Grant (PSG) for Job Redesign
In 2019, PSG was enhanced to include SkillsFuture Training Subsidy, which allows companies to upskill employees and claim up to 70% of out-of-pocket training expenses, capped at $10,000 per eligible company. This is provided on top of existing government course fee subsidies.
It was announced in Budget 2020 that PSG will be further enhanced to include job redesign consultancy services. You can find out more information from WSG website here.
SkillsFuture Mid-Career Support Package – Hiring Incentive for Employers (Updated to cover all ages)
While the Government increases the capacity of reskilling programmes available, they would like to create more career transition opportunities for locals in their 40s to 50s. For workers above 40 that went through a reskilling programme, the Government will provide 20% salary support to the employer, for each eligible worker, for six months, capped at $6,000 in total.
Fortitude Budget Update: The hiring incentive for employers which hire local workers who have completed eligible traineeship or training programmes have been expanded to cover workers of all ages. For workers under 40, the Government will provide 20% salary support to the employer, for each eligible worker, for six months, capped at $6,000 in total. For workers who are 40 and above, the Government will provide 40% salary support for each eligible worker, for six months, capped at $12,000 in total.
Enhanced Training Support
SSG provides course fee subsidies and absentee payroll for a wide range of approved courses to support employers to send their employees for training. SSG will be providing enhanced course fee subsidies and absentee payroll rates for employers in sectors directly affected by the COVID-19 outbreak (i.e. air transport, tourism, retail, food services), when they sponsor their workers for eligible coursers. The enhancements will last for three months to encourage employers to make use of the downtime to send workers for training.
Resilience Budget Update: SSG will extend the enhanced course fee subsidy to the Land Transport (point-to-point transport and private hire buses) and Arts and Culture sectors for selected sector-specific training programmes offered by SSG-appointed training partners. This subsidy will be eligible for courses that start before 1 January 2021.
Course fee subsidy rates, provided by MOF
Resilience Budget Update: SSG will extend the enhanced absentee payroll rates to all sectors. From 1 April 2020, the enhanced rates will be extended to the Land Transport and Arts and Culture sectors for selected sector-specific programmes. From 1 May 2020, the enhanced rates will be further extended to all sectors for all courses currently eligible for absentee payroll funding. This subsidy will be eligible for courses that start before 1 January 2021.
Absentee payroll rates, provided by MOF
Senior Worker Support Package
To support continuous working and learning of seniors, the Government came up with a range of initiatives.
Senior Employment Credit
An amalgamation of Special Employment Credit (SEC) and Additional SEC (ASEC), the Senior Employment Credit which will take effect in 2021 will provide employers with wage offsets when they hire Singaporean workers aged 55 and above, and earning up to $4,000 a month. This will take effect from 1 January 2021 to 31 December 2022.
Maximum wage offsets, provided by MOM
CPF Transition Offset (Update: Deferment of increase, not offset)
When employer CPF contribution rates go up in 2021, employers will be provided with a CPF Transition Offset for the year, to offset half of the increase in employer contributions for senior workers aged above 55 to 70. This will take effect from 1 January 2021 to 31 December 2021.
Fortitude Budget Update: The increase in CPF contribution rates for senior workers will be deferred entirely by 1 year, from 1 January 2021 to 1 January 2022.
Senior Worker Early Adopter Grant
The grant is to support enterprises that raise their own Retirement and Re-employment ages ahead of the legislated changes. To qualify for the grant, companies must formalise the changes in their HR policies and employment contracts, and communicate the changes to their employees. This will take effect from 1 July 2020.
Part-Time Re-employment Grant
The grant is to support and encourage enterprises to formalise part-time re-employment provisions. From 1 July 2020 to 30 June 2023, the Government will provide the grant to enterprises which commit to offering part-time reemployment to eligible older workers who request for it.
Enabling Employment Credit (EEC) for Persons with Disabilities (PWDs)
To build a more inclusive society, the EEC supports employment for PWDs, by providing wage offsets after the SEC and ASEC expires in end 2020. The EEC will be given to employers who hire Singaporean PWDs earning below $4,000 a month.
Change in Foreign Manpower Policy
The affected sectors are: Construction, Marine Shipyard and Process Sectors. For these industries, the S Pass Depending Ratio Ceiling (DPR) will be reduced from 20% to 18% from 1 January 2021, and then to 15% from 1 January 2023. The long notice period is given to help companies ease into this transition.
Currently, the S Pass sub-DRC for the Manufacturing sector is maintained, due to economic uncertainties. The foreign worker levy will also be maintained for all sectors in 2020 (to be updated in Solidarity & Fortitude Budgets).
MOM encourages enterprises to consider locals more serious when recruiting, and to tap on programmes like Professional Conversion Programme (PCP) and Lead Enterprise Development (LED) Scheme to build a stronger Singaporean core.
Foreign Worker Levy Waiver & Rebate
It was announced at the Solidarity Budget that the foreign worker levy (FWL) due in April would be waived, and firms would receive a rebate of $750 that month for each work permit or S Pass holder, from levies paid this year. When the circuit breaker was extended for another 4 weeks, the waiver and rebate was extended for an additional month till May.
Fortitude Budget Update: The FWL waiver and rebate will be extended by up to 2 more months for businesses that are not allowed to resume operations after the circuit breaker. The waiver and rebate will be 100% and $750 respectively for June 2020, and 50% and $375 respectively for July 2020.
You can refer to FAQ on FWL waiver and rebates at MOM website here.
SGUnited Jobs and SGUnited Traineeships
The Government launched these initiatives to create 10,000 jobs over the next year. The SGUnited Traineeships programme provides employers support when they provide traineeships to fresh graduates entering the workforce to help boost employability for new graduates. Workforce Singapore (WSG) will co-fund up to 80% of the qualifying training allowance for host companies offering traineeship opportunities, with the remaining being funded by the employer.
Fortitude Budget Update: To help create more jobs, the government has enhanced the SGUnited Jobs & Skills Package. Under SGUnited Jobs, the government aims to create 40,000 jobs by end-2020, with 15,000 from the public sector and 25,000 from the private sector. Under SGUnited Traineeships, the government aims to create 21,000 traineeships for local first-time job seekers and 4,000 traineeships for local mid-career jobseekers to learn new skills and start new careers.
To learn how you can be a host company, find out more here.
Increased Support for Productivity Solutions Grant (PSG) & Enterprise Development Grant (EDG)
The maximum support levels for PSG and EDG will be raised from 70% to 80% till end-2020. For firms most severely affected by COVID-19, EDG support levels can go up to a maximum of 90% on a case-by-case basis. For HR, you can consider subscribing to a HR Management System through PSG, or embark on a Human Capital Development project under EDG.
Jobs Growth Incentive
To assist sectors who are performing well to stretch their manpower hiring budget and create new jobs, the government will co-pay up to 25% of salaries of all new local hires for one year, subject to a cap. For those aged 40 and above, the co-payment to firms will be up to 50%. However, firms need to maintain their current local workforce size to enjoy the full incentive to ensure that firms who enjoy this benefit are growing their workforce, not just hiring replacements. More detailed information will be announced by MOM.
2020 is off to a challenging start – the Budget 2020 acknowledges that, providing enterprises a Stabilisation & Support Package to provide cashflow support and to help enterprises retain workers. The Government’s advice is clear – leverage on the lull business period to look into improving your business – train and upskill your workers, digitise and automate your work systems, relook at your business strategy and diversify your risks so you will not be put in the same position of being over-reliant on certain markets, customers or suppliers. When the upturn comes, your business and your employees will be amongst the first to bounce back to recovery.
Beyond that, the Government has continued its stance of strengthening the Singaporean core and helping Singaporeans gain employment through upskill and career conversion programmes, hiring incentives for employers and tightening of foreign worker policies. This includes specific policies to support local senior workers and Persons with Disabilities in helping them gain and retain employment. HR will have to relook at their manpower strategy to see how more local employees can be incorporated and to leverage on the multitude of support programmes made available to ease this transition.
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