This article was first published on 20 April 2020 and has been updated to reflect changes in the Jobs Support Scheme (JSS) following Budget 2021, as well as previous announcements.
Close to a year after COVID-19 first was first reported in Singapore, it is still having a major impact on many businesses and livelihood. In Budget 2021, Deputy Prime Minister (DPM) Heng Swee Keat announced a slew of measures under an $11 billion COVID-19 Resilience Package to continue Singapore’s fight against the pandemic.
One of the measures was to extend the Jobs Support Scheme (JSS) for another up to 6 months for the hardest-hit sectors. This is expected to cost $700 million.
What Is The Jobs Support Scheme (JSS)?
The Jobs Support Scheme was first introduced at Budget 2020 and was further enhanced at the Resilience, Solidarity and Fortitude Budgets. A further update to extend the Job Support Scheme till March 2021 was made on 17 August 2020 during a Ministerial Statement delivered by Deputy Prime Minister Heng Swee Keat.
In the recent Budget 2021 announcement, the JSS was extended for the hardest-hit industries for up to 6 more months – till end-September 2021.
Apart from providing cash flow support, the scheme hopes to help businesses retain local workers during this period.
Under the Jobs Support Scheme, businesses will receive wage support for the first $4,600 of gross monthly wages paid to their local employees. This includes all your Singapore Citizen and Permanent Resident (PR) employees.
For sectors that are managing well, the Job Support Scheme will ended in December 2020. The latest round of extension to the Jobs Support Scheme will be targeted at at the hardest-hit sectors.
During the months of April and May 2020, all businesses received 75% in wage support (capped at the first $4,600 of wages) to tide through the circuit breaker period. This was enhancement from the Solidarity Budget.
Businesses then received co-funding based on the tier that they belonged to, for the first $4,600 of gross monthly wages.
|JSS Tier||Oct 2019 to Aug 2020 Wages||Sep to Dec 2020 Wages||Jan to Mar 2021 Wages||Apr to Jun 2021 Wage|
[Extended in Budget 2021]
|Jul to Sep 2021 Wages|
[Extended in Budget 2021]
Which Tier Does My Business Belong To?
Businesses are tiered according to the impact that COVID-19 has caused, for instance, the aviation and tourism sectors have been severely hit by travel restrictions. Under the Fortitude Budget in 2020, various sectors were added to Tiers 1 & 2.
Tier 1: Aviation and Aerospace; and Tourism, Hospitality, Conventions and Exhibitions.
The Built Environment sector was considered Tier 1 only for June 2020 to Sep 2020 wages. There after it qualified for Tier 2 wage support.
Tier 2: Food Services; Retail; Arts & Entertainment, Land Transport, Marine and Offshore.
Tier 3 is broken down into Tier 3A and Tier 3B
Tier 3A: All other employers (apart from those listed in Tier 3B).
Tier 3B: Biomedical Sciences; Precision Engineering; Electronics; Financial Services; Information and Communications Technology (ICT) and Media; Retail.
|Month Of Payout||Payout Based On Wages Paid In||Tier 1||Tier 2||Tier 3|
|Apr 2020||Oct-Dec 2019||75%||50%||25%|
|Jul 2020||Feb-Mar 2020||75%||50%||25%|
|Apr 2020 (Circuit Breaker)||75%||75%||75%|
|Oct 20||May 2020 (Circuit Breaker)||75%||75%||75%|
|Mar 2021||Sep-Dec 2020||50%||30%||10%|
|Jun 2021||Jan-Mar 2021||50%||30%||3A: 10%3B: 0%|
[Extended during Budget 2021]
[Extended during Budget 2021
Who Qualifies For The Jobs Support Scheme?
Employers who have made CPF contributions for their local employees are eligible for the payout. Shareholders and/or directors of a company are also eligible if they are salaried employees of the company with an Assessable Income of $100,000 or less for the Year of Assessment 2019.
Business owners do not qualify for this payout, including sole proprietors and partners of general partnership, limited liability partnerships and limited partnerships.
Employers trading in their own personal capacity, such as hawkers who do not have UEN, or those hiring local personal drivers or domestic helpers, will not be able to claim wage payout.
Applying For The Jobs Support Scheme
You do not need to apply for the Jobs Support Scheme. If you are eligible, IRAS will notify you by post the tier that your business belongs to, and the amount of payout you will get. To view your Jobs Support Scheme letters, you may visit this IRAS website.
When Will We Receive JSS Payouts?
You will receive a total of five main JSS payouts in April 2020, July 2020, October 2020, March 2021 and June 2021. There was also a special payout in May 2020.
The payouts will be credited to the GIRO bank account that employers used for income tax or GST. For those without GIRO accounts, you will receive the payout via the bank account registered with PayNow Corporate. If you do not have both of the options above, the payout will be made by cheque. To receive your payouts faster, you can sign up for PayNow Corporate.
How Are JSS Payouts Computed?
Regardless of which tier you belong to, the wage payout will only be paid for the first $4,600 of your employee’s gross monthly wages.
Assuming that Employee A earns $5,000 a month, and belongs under Tier 3, you will receive 10% of the first $4,600 from September 2020 to March 2021. The remaining $400 will not receive any wage support.
Payouts are computed based on past wages. For the first payout in April 2020, IRAS computes the amount based on wages paid from October 2019.
The table below shows how IRAS computes the payout for subsequent months.
With this in mind, companies should understand that any pay cuts made during this period will affect their total payout from the scheme.
IRAS has stated that the 75% wage support for Apr/May 2020 wages was calculated based on Oct/Nov 2019 wages to allow for employers to receive the payouts faster. Subsequently, for the second and third payouts, it will be adjusted based on the difference between Apr/May 2020 and Oct/Nov 2019 wages. This means that any layoffs or pay cuts will be reflected in a lower amount of payouts.
If there are any negative quantum from Payout 2, it will be adjusted accordingly in Payout 3. Otherwise, it will be offset from your overall payout from the Jobs Support Scheme. That means it is likely to be deducted from the payouts of your other workers.
Abuse Of Jobs Support Scheme
IRAS takes a very serious view on employers who may be trying to abuse the JSS to receive JSS payouts. For example, employers cannot make CPF contributions to people who are not working for them to get JSS payout.
Similarly, employers cannot cut the wages of employees, yet continue to maintain CPF contribution at the original level to enjoy higher JSS payout. If you are a recipient of a purported CPF contribution, it’s your responsibility to report any incorrect CPF contributions. Otherwise, you may be seen as an accomplice to the fraud.
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