Jobs Support Scheme in Singapore: New Wage Subsidy from The Government (Latest Update)

 

The Jobs Support Scheme (JSS) was introduced in the Singapore Budget 2020. However, due to the current severe Covid-19 situation, it has been significantly enhanced by the Government to maximize the support for Singapore businesses.

Overview of the Jobs Support Scheme in Singapore

The JSS was previously introduced as a temporary scheme in 2020. Its first idea was the Government would cover 8% of the gross monthly wages given to local staff in the last 3 months of 2019.

However, the fact that the Covid-19 pandemic is getting worse has driven enhancements to be made to such schemes. So, after the Resilience Budget, Solidarity Budget, and Fortitude Budget, under the Jobs Support Scheme, the Government has announced to co-fund the first $4,600 of gross monthly wages paid to each local employee for 10 months.

Now, there are 3 different co-funding rates for 3 different tiers of sectors, instead of the overall 8% rate. 

Tier 1 with the co-funding rate of 75%: applies to sectors such as

• Aviation and Aerospace
• Tourism, Hospitality, Conventions, and Exhibitions
• Built Environment (only for June to August 2020 wages)

Tier 2 with the co-funding rate of 50%: applies to sectors such as

• Food Services
• Retail
• Arts and Entertainment
• Land Transport
• Marine and Offshore

Tier 3 with the co-funding rate of 25%: applies to other sectors

In addition, the government has also announced to pay 75% on the first $4,600 of monthly wages paid in April and May 2020 for each local worker in employment in all sectors.

In addition, in the Fortitude Budget, it is stated that employers of businesses that are not able to resume their operations will continue to receive 75% wage support until August 2020 or until they re-open their businesses, whichever happens first. Employers of businesses that can resume operations will revert to receiving their base tier of support described in the table above.

How does the jobs support scheme work?

Employers will receive 4 payouts: 3 main payouts in April, July, and October 2020 and 1 additional payout in May 2020.

In order to provide early cash-flow support for companies during this rough time, the support for wages paid in April and May 2020 will be given in advance to the April and May payouts respectively:

• These given advances will first be calculated based on the October-2019 wage (received in the April payout) and November-2019 wage (received in the May payout).
• Then, the July 2020 and October 2020 payouts will be adjusted to account for actual wages paid in April and May 2020 and the advances given.

The details below will explain which payout covers which monthly wage(s):

Payout 1

• The payment month for this payout will be April 2020.
• The monthly wage cover will be October 2019; November 2019; December 2019; April 2020 (computed base on October 2019)
• Gross wages used to calculate payout includes employee CPF contribution paid by 14 February 2020.

Additional payout

• The payment month for this payout will be May 2020
• The monthly wage cover will be May 2020 (computed based on October 2019)
• Gross wages used to calculate payout includes employee CPF contribution paid by 14 February 2020.

Payout 2

• The payment month for this payout will be July 2020.
• The monthly wage cover will be February 2020; March 2020; April 2020 (adjusted for payout given in advance in April-2020 payout)
• Gross wages used to calculate payout includes employee CPF contribution paid by 31 May 2020.

Payout 3

• The payment month for this payout will be October 2020.
• The monthly wage cover will be May 2020 (adjusted for payout given in advance in May-2020 payout); June 2020; July 2020; August 2020
• Gross wages used to calculate payout includes employee CPF contribution paid by 14 September 2020.

To see how each payout is calculated with the application of rates, please refer to the Payout Computed by IRAS for more details.

Any negative amount for a single employee will be offset from the subsequent payout, otherwise, it will be offset from the overall JSS payout for the employer.

Who is eligible for the Jobs Support Scheme in Singapore?

This is the scheme to support employers in Singapore who have made CPF contributions for employees who are Singapore Citizens or Permanent Residents.

The JSS is also extended to cover wages of employees who are shareholders and directors of a company only if:

• That company is registered on or before 20 April 2020; and
• Their Assessable Income for the Year of Assessment 2019 is $100,000 or less.

Employers from the following entities are excluded from the Jobs Support Scheme:

• Local Government Agencies;
• Government-related schools;
• Grassroots Units and People’s Association Services;
• High Commissions, Embassies, Trade Offices, and Consulate;
• Unregistered Local/Foreign Entities;
• Foreign Military Units;
• Representative offices of Foreign companies, Foreign Government Agencies, Foreign Trade Associations/ Foreign Chambers/ Foreign Non-profit Organisations/Foreign Law Practices;
• Bank Representative Offices/Insurance Representative Officers/Other Financial Representative Offices (registered with MAS); News Bureaus (which are representative offices);
• International Organisations.
• Entities that pay CPF but are not registered in Singapore

How to apply for Jobs Support Scheme in Singapore?

Fortunately, if you are an eligible employer, you do not need to apply. IRAS will automatically notify the JSS payout to you.

To determine the specific tier and level of support applicable to your sector, please refer to the Specific Industries in Tiers and SSIC Codes for a detailed list of sectors included in the respective tiers.

Key takeaways

• The Jobs Support Scheme has been enhanced to cover monthly wages over 10 months (capped at $4,600/month) paid to local employees with a co-funding rate:
  • 75% for Sector Tier 1
  • 50% for Sector Tier 2
  • 25 for all other sectors (Sector tier 3)
• Employers of businesses that are not able to resume their operations will continue to receive 75% wage support until August 2020 or until they re-open their businesses, whichever happens first
• Co-funding rate for monthly wages paid in April and May 2020 is 75%
• 3 main payouts are in April, July, and October 2020 and 1 additional payout is in May 2020
• Wages paid to employees who are shareholders/directors are now eligible
• No application is needed

New update: extension to March 2021 

As announced on 17 Aug 2020 in the Ministerial Statement on Continued Support for Workers and Jobs, the JSS will be extended to March 2021. It means that the scheme will continue to cover the wages paid to local workers for 7 more months (Sep 2020 to Mar 2021).

However, the support for different tiers of sectors will be quite lower. Specifically:

Tier 1 

• Aerospace, Aviation, Tourism
• Support level: 50%
• Built environment
• Support level: 50% for Sep and Oct, 30% from Nov to Mar 2021

Tier 2

• Art & Entertainment, Food services, Land transport, Marine & offshore, Retail
• Support level: 30%

Tier 3A

• All other sectors excluding those in tier 3B
• Support level: 10%

Tier 3B

• Biomedical sciences, precision engineering, electronics, financial services, information and communications technology, media, postal and courier, online retail, and supermarkets and convenience stores
• Support level:
  • 10% from Sep to Dec 2020
  • 0% from Jan to Mar 2021

The supporting amount will be received in the 4th and 5th payouts in March 2021 and Jun 2021 respectively:

Payout	Payment month	Monthly wage cover	Gross wages used to calculate payout paid by
Payout 4	Mar 2021	Sep to Dec 2020	14 Jan 2021
Payout 5	Jun 2021	Jan to Mar 2021	14 Apr 2021

A reminder: Employers do not need to apply for the JSS. The grant will be calculated and based on their CPF contribution data. The supporting amount will be received in the 4th and 5th payouts in March 2021 and Jun 2021 respectively:

Should you want to know more about hiring in Singapore, go and see our blogs. Or should you want to know what other changes are mentioned in the Singapore Budget 2020, see our Overview of Singapore Budget 2020 for Businesses.

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