Budget 2020 – HR & Payroll-centric Updates

Mar 2 2020
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 Jobs Support Scheme (JSS)

Introduction of the Jobs Support Scheme (JSS) to help enterprises retain their local workers. For every local worker in employment, 8% of the wages will be offset up to a monthly wage cap of $3,600 for three months.

  1. This payment will be given to employers by the end of July 2020.

Note: 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. 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 the Inland Revenue Authority of Singapore (IRAS) by 31 July 2020. This is a temporary scheme.

Enhanced Wage Credit Scheme
This Scheme that currently supports wage increase for Singaporean workers will be enhanced.

  1. Currently, the Wage Credit Scheme co-funds wage increase for Singaporean employees earning a gross monthly wage of up to $4,000.
  2. The monthly wage ceiling will increase from $4,000 to $5,000, for qualifying wages given in years 2019 and 2020, so that more Singaporean employees will benefit from this Scheme.
  3. Increased Government co‑funding levels for years 2019 and 2020 qualifying wage will increase by five percentage points to 20% and 15% respectively.

In addition to these enhancements, another $1.1 billion will go to about 90,000 enterprises to benefit more than 700,000 Singaporean employees.

Additional information including qualifying criterion: https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/Schemes/Businesses/Wage_Credit_Scheme/Quick%20Guide%20on%20the%20Enhancement%20to%20Wage%20Credit%20Scheme.pdf

Adapt and Grow initiative

The Adapt and Grow initiative will be supported through redeployment programmes in tourism, aviation, retail, and food services sectors. This funding period for reskilling will be extended from three months to a maximum of six months. SMEs currently under this Scheme receive salary support if they place and train eligible Singapore Citizen PMETs. Below are the current programmes (extended) as well as new programmes to support redeployment:

  1. Job Redesign Place-and-Train (PnT) Programme for hotel industry
  2. Job Redesign PnT Programme for retail industry

New programmes to support redeployment by WSG:

  1. Job Redesign PnT Programme for Food Services Industry
  2. Digital Marketing PnT Programme
  3. Professional Conversion Programme (“PCP”) for Meetings, Incentives, Conventions and Exhibitions (“MICE”), Attractions and Tour, and Travel
  4. PCP for Digital Operations Talent for the Furniture Industry
  5. PnT Programme for Air Transport Coordinators

Launch of the Enterprise Grow Package

The Enterprise Grow Package, which aims to help enterprises identify business needs, and adopt pre-approved digital technologies:  

  1. The GoBusiness platform is a single touch point for enterprises to transact with the Government digitally. It currently streamlines licence applications for businesses and facilitates access to information with the Government’s help. In 2020, this Portal will expand to cover other key government-to-business transactions. 
  2. The SMEs Go Digital programme will be expanded to enable enterprises to access pre-approved digital solutions to drive greater adoption of digital technology.

SkillsFuture Enterprise Credit

The new SkillsFuture Enterprise Credit was introduced to encourage employers to transform their workforce and enterprise. Employers may use this credit to defray 90% of the costs of business transformation, job redesigning, and skills training. The SkillsFuture Enterprise Credit is capped at $10,000 per enterprise, and will benefit over 35,000 enterprises.

  1. Additional support for job redesigning: The Productivity Solutions Grant supports enterprises to adopt pre-approved digital solutions and equipment; and it will be expanded to include job redesigning consultancy services.
  2. The Government will work with large anchor enterprises to support training for their sectors and value-chain partners. Anchor enterprises are supported by many SMEs. By helping to raise the skills of workers in these SMEs will benefit the entire supply chain.

SkillsFuture Mid-career Support Package

A new SkillsFuture Mid-career Support Package was introduced to locals in their 40s and 50s to facilitate employability, role and career mobility; with the aim to double the annual job placement of this target group to around 5,500, by year 2025. This is to encourage employers to step up their recruitment efforts, retain, and retrain local mid-career workers. To reach this goal, we should:

  1. Increase the capacity of reskilling programmes. This includes the Professional Conversion Programme under the Adapt and Grow initiative, career transition programmes delivered by Continuing Education and Training Centres or CET Centres, like IHLs, and other sector-specific programmes.
  2. Provide hiring incentive to employers who hire local jobseekers aged 40 and above through any of the reskilling programmes. For each eligible worker, the Government will provide 20% salary support to the employer for six months, capped at $6,000.

Senior Worker Support Package

The Senior Worker Support Package comprises four measures:

  1. Reorganise the Special Employment Credit (SEC) and the Additional Special Employment Credit (ASEC) into a Senior Employment Credit (with effect from 2021). This Senior Employment Credit will provide employers with wage offsets when they hire Singaporean workers aged 55 and above, with the support level progressively tapering down as the retirement and re-employment ages are gradually raised.
  2. Provide employers with a CPF Transition Offset for the employment year i.e. to offset half of the increase in employer contributions when employer CPF contribution rates increase in 2021.
  3. The Senior Worker Early Adopter Grant will support enterprises that raise their own retirement and re-employment ages ahead of the legislated changes.
  4. The Part-time Re‑employment Grant will support and encourage enterprises to formalise part-time re-employment.

SkillsFuture Credit Top-up

To encourage Singaporeans to continue learning, the Government will provide a one-off SkillsFuture Credit top-up of $500 for every Singaporean aged 25 years and above:  

  1. The top-up will be available for use from 1st October 2020.
  2. Unlike the earlier $500 credit which has no expiry date, this new top-up will expire in about five years’ time i.e. by end-2025. This is to encourage Singaporeans to take action early to learn new skills.

Foreign Workers Policy

The Government has been working closely with industry and educational institutions to build a pool  of local manpower, including mid-career workers, granting them fair opportunities to grow while supporting the manpower needs of enterprises.

To support this initiative and allow time for enterprises to adapt, the following measures will take effect in about a year from now:

  1. Reduce this year’s S Pass sub‑DRCs of the Construction, Marine Shipyard, and Process sectors from 20% to 15%. This phase will be cut into two steps. The first step is a reduction from 20% to 18% on 1st January 2021, and subsequently to 15% on 1st January 2023.

There is no reduction of the S-Pass sub-DRC for the manufacturing sector this year. Due to economic conditions, foreign worker levy rates for all sectors for 2020 will remain unchanged.

Links for Reference:

Budget 2020 – Ministry of Finance

https://www.singaporebudget.gov.sg/budget_2020/budget-speech

https://www.singaporebudget.gov.sg/docs/default-source/budget_2020/download/pdf/fy2020_budget_statement.pdf

Budget Booklet 2020

https://www.singaporebudget.gov.sg/budget_2020/budget-measures/budget-booklet/budget-booklet-eng

Jobs Support Scheme

https://www.iras.gov.sg/irashome/Schemes/Businesses/Jobs-Support-Scheme--JSS-/

Wage Credit Scheme

https://www.iras.gov.sg/IRASHome/Schemes/Businesses/Wage-Credit-Scheme--WCS-/

Ministry of Trade and Industry

https://www.mti.gov.sg/-/media/MTI/COS-2020/MTI_Budget_Booklet_for_Businesses.pdf

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