The Singapore Budget 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: 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:
- Stablisation & Support Package
- SkillFuture Enhancements
- Senior Worker Support Package
- Enabling Employment Credit for Persons with Disabilities
- Change in Foreign Manpower Policy
- Resilience Budget Update: SGUnited Jobs and SGUnited Traineeships
- Resilience Budget Update: Increased Support for Productivity Solutions Grant & Enterprise Development Grant
Stabilisation & Support Package for COVID-19
Cashflow support will be provided by the Government to tide enterprises through this period of economic uncertainty, with sector-specific support, as well as more broad-based support like providing capital loan and corporate income tax rebates.
Infographic: Summary of Stabilisation & Support Programme Measures
Other than keeping businesses afloat, one of the Government’s main objective is to help enterprises keep their workers even when business slows down.
Specific measures such as the Job Support Scheme and the Wage Credit Scheme try to help workers stay employed by helping employers defray some wage costs.
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.
Employers do not need to apply for the JSS. The grant will be computed based on CPF contribution data. Employers can expect to receive the JSS payment from IRAS by 31 July 2020.
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. More details will be available during MTI and MOM Committees of Supply (COS).
SkillsFuture Mid-Career Support Package – Hiring Incentive for Employers
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 wokers 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. More details will be provided at MOM COS.
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
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.
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. More details will be shared at the MOM COS.
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. More details will be shared at the MOM COS.
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. More details will be provided at MOM COS.
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.
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.
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. The training allowance provided to the trainees will be co-funded by the Government. More details on how to apply will be released in due course.
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.
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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