This article was first published on 20 April 2020 and has been updated to include enhanced measures from the extended “Circuit Breaker”.
The COVID-19 outbreak has affected businesses and livelihood. To provide relief to businesses during the circuit breaker month, the Government has enhanced the Jobs Support Scheme to pay a portion of local workers’ salaries for 10 months.
What Is The Jobs Support Scheme?
It was first introduced at Budget 2020 and was further enhanced at the Resilience, Solidarity and Fortitude Budgets. Apart from providing cash flow support, the scheme hopes to help businesses retain 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 Citizens and Permanent Resident employees. The wage support lasts for 10 months, until August 2020.
For the months of April and May 2020, all businesses will receive 75% in wage support (capped at the first $4,600 of wages) to tide through the circuit breaker period. This was the latest enhancement from the Solidarity Budget.
For the remaining 8 months, businesses will receive co-funding based on the tier that they belong to, for the first $4,600 of gross monthly wages.
Businesses that are unable to resume operations after the circuit breaker ends will continue to receive 75% wage support for local employees. This support will continue till operations may resume again, or till August 2020, whichever earlier. Should operations resume in the middle of the month, the wage support will be pro-rated accordingly.
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, various sectors have been added to Tiers 1 & 2.
Tier 1: 75% in wage support for those in aviation and aerospace, tourism, hospitality, conventions & exhibitions, and built environment.
Tier 2: 50% in wage support for those in food services, retail, arts & entertainment, land transport, marine and offshore
Tier 3: All other employers will receive 25% in wage support.
For the full list of sectors in each tier, you may refer to the Enhanced Job Support Scheme here. Alternatively, if you would like check if you are eligible for a higher tier, you may fill up this form or call 1800 352 4728 (8 am to 5 pm from Mon to Fri).
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 eligible if they are also salaried employees of the company with 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 three payouts in April, May, July and October this year.
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 25% of the first $4,600. 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. Those who belong to Tier 1 will continue to receive 75% wage support for all applicable 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.
Guidelines On Salary And Leave Arrangements During “Circuit Breaker”
According to this advisory released by MOM, employers are advised not to retrench workers, or to use prolonged no-pay leave during this circuit breaker.
If your employees are still working full-time, the advisory recommends paying them their prevailing salaries, including the employer’s CPF contributions. If your employees are not working or are working from home, MOM suggests using the Jobs Support Scheme payout to provide a baseline pay to employers, including employer’s CPF contribution.
Lastly, if you are implementing a pay cut of more than 25% during the circuit breaker period, and have at least 10 employees, you must notify MOM here.
Sign Up For PayNow For Businesses
For OCBC Business Banking customers, sign up for PayNow here or visit respective bank’s PayNow registration service to begin receiving payments from customers quickly and conveniently, while adhering to safe distancing measures and minimising community spread of COVID-19.
Furthermore, you can also receive payouts from government schemes like the Jobs Support Scheme quicker and more conveniently with PayNow for your business.
To encourage SMEs to adopt PayNow for businesses, the Association of Banks in Singapore (ABS) will be giving $25 to the first 20,000 SMEs that sign up for PayNow from now till 31 July 2020. You can find full details about this promotion here.
Stay Healthy, Go Digital
Keep your workers and business healthy during this period by going digital. In partnership with IMDA Go Digital Initiative, understand how OCBC digital solutions can help your business buy, sell and operate better during this time.
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