This article was first published on 20 April 2020 and was updated on 27 May 2020 to include enhanced measures from the extended “Circuit Breaker”. It was updated again following the Ministerial Statement made on 17 August 2020.
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 a total of 17 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. 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.
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 employees. The wage support lasts for 17 months, until March 2021. For sectors that are managing well, the Job Support Scheme will end in December 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 15 months, businesses will receive co-funding based on the tier that they belong to, for the first $4,600 of gross monthly wages.
It’s worth noting that for businesses that are not allowed to resume operations after the circuit breaker, they will continue to receive 75% wage support for local employees until August 2020. Following that, they will receive the same level of support as Tier 1 companies (50% of wages) from September 2020 to March 2021, until they are able to resume operations on-site. When that happens, they will revert to their Tier which their company belongs to.
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. This applies until August 2020.
Tier 1: 75% in wage support for those in aviation and aerospace, tourism, hospitality, conventions & exhibitions, and the built environment.
Tier 2: 50% in wage support for those in food services, retail, arts & entertainment, land transport, marine and offshore sectors.
Tier 3: All other employers will receive 25% in wage support.
Under the extended JSS, sectors are supported at the following tiers. This applies from September 2020 to March 2021.
Tier 1 sectors (e.g. Aviation, Aerospace, and Tourism) will receive 50% in wage support from September 2020 to March 2021.
Tier 2 sectors (e.g. Food Services, Retail, Marine & Offshore, and Arts and Entertainment) will receive 30% in wage support from September 2020 to March 2021. This is with the exception of the built environment sector, which will receive Tier 1 support (i.e. 50% in wage support) from September 2020 to October 2020, before receiving Tier 2 support (30% in wage support) from November 2020 to March 2021.
Tier 3 sectors will receive 10% in wage support from September 2020 to March 2021. This is with the exception of selected Tier 3 sectors (i.e. Financial Services, Information and Communications Technology and Media, Biomedical Sciences, Precision Engineering, Electronics and Online Retail and Supermarkets), which will receive 10% JSS support for wages paid from September to December 2020. JSS support for these sectors will cease after December 2020.
Companies can refer to IRAS’ JSS website for more details of the payout schedule and criteria.
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 Job 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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