{"id":4507,"date":"2020-06-08T08:48:55","date_gmt":"2020-06-08T00:48:55","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=4507"},"modified":"2021-03-16T16:57:04","modified_gmt":"2021-03-16T08:57:04","slug":"abusing-jobs-support-scheme-iras-warning-business-owners-not-to-do","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/abusing-jobs-support-scheme-iras-warning-business-owners-not-to-do\/","title":{"rendered":"Abusing The Jobs Support Scheme: 6 Things IRAS Is Warning Companies NOT To Do"},"content":{"rendered":"\n

To help protect jobs during the COVID-19 pandemic, the Singapore government has introduced a slew of initiatives, including the\u00a0Jobs Support Scheme (JSS)<\/a>, to help Singapore business owners retain their Singapore workers during this challenging period.\u00a0<\/p>\n\n\n\n

In case you don\u2019t already know, the\u00a0Jobs Support Scheme (JSS)<\/a>\u00a0provides wage support for the\u00a0first $4,600 of gross monthly wages paid to local employees. This includes all your Singapore Citizens and Permanent Resident employees. The wage support lasts for ten months, from October 2019 to August 2020.<\/p>\n\n\n\n

For 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. <\/p>\n\n\n\n

For the remaining eight months, businesses will receive co-funding based on the tier that they belong to, for the first $4,600 of gross monthly wages. This ranges from 25% to 75%.<\/p>\n\n\n\n

Read Also:\u00a0<\/strong><\/em>Here\u2019s What You Need To Know About The Jobs Support Scheme<\/strong><\/em><\/a><\/p>\n\n\n\n

The Government Has Made It Easy To Receive JSS Payouts, But This Also Makes It Easy For Abuse<\/h3>\n\n\n\n

From a policy-making standpoint, it\u2019s important to ensure that grants are easy to access if we want to make it available for the people who deserve it. If we make schemes too difficult to access (e.g. tons of paperwork to fill in), then we run the risk that people who should get the payouts won\u2019t get it. <\/p>\n\n\n\n

For the Jobs Support Scheme (JSS), payouts are made to companies based on the CPF contribution submitted by companies. For example, if you have four workers in April 2020, earning $3,000 per month, total CPF contributions made for the month would be $1,100 (20% from employees, 17% from employers). The government will then rebate you 75% of gross monthly salary, which works out to be $2,250 per worker and $9,000 in total for the month.\u00a0<\/p>\n\n\n\n

However, this makes it open to abuse. <\/p>\n\n\n\n

Last week, the Inland Authority of Singapore (IRAS) made it clear in a\u00a0media release<\/a>\u00a0that it\u2019s aware that some employers may try to abuse this scheme in order to receive higher JSS payouts. This is not only dishonest and morally wrong, but it\u2019s also against the law.\u00a0<\/p>\n\n\n\n

Here are some examples, as highlighted by IRAS. Do note this is not an exhaustive list and any other methods of abusing the scheme isn\u2019t legal either.  All images below are from IRAS. <\/p>\n\n\n\n

#1 Making Purported CPF Contributions For Non-Genuine Employees<\/h3>\n\n\n\n

A dishonest employer may make CPF contributions to people who are not working for them to get JSS payout. For example, a business owner could pay $1,100 a month to his non-working spouse to get a $2,250 JSS payout. Do note that individuals who receive such CPF contributions made be seen as an accomplices to the fraud and this may result in criminal liability for the individuals. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

#2 Continuing Purported Mandatory CPF Contributions For Employees Who Have Been Retrenched Or Put On No-Pay Leave<\/h3>\n\n\n\n

The Jobs Support Scheme is meant to ensure that employers can continue to hire their workers and to pay them their salaries. However, there may be some companies that cannot (or are willing) to afford that. These companies may have retrenched their workers or have put them on no-pay leave.\u00a0<\/p>\n\n\n\n

If your workers are no longer employed by the company or are currently on unpaid leave, you should not be making mandatory CPF contributions for them under the guise that you are still trying to \u2018help them\u2019, when you are just trying to get more JSS payouts for employees that you are no longer paying. <\/p>\n\n\n\n

Do note that employers who wish to be generous to their employees who are on unpaid leave can continue to make CPF contributions to them voluntary<\/em>.<\/strong><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

#3 Maintain CPF Contribution Amounts Based On Past Wages For Employees Who Have Suffered Wage Cut<\/h3>\n\n\n\n

Your employees have (reluctantly) accepted a wage reduction to help the company survive. As a result, your business JSS payouts will be lower since your employees\u2019 salaries are now lower. However, you decided that you will maintain the original CPF contribution rates to enjoy higher JSS payouts for the next few months. This is illegal.\u00a0<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

#4 Increasing CPF Contributions Without Any Actual Wage Increase<\/h3>\n\n\n\n

On the flip side, you can maintain your employee\u2019s salary. However, you also realised that you would get higher JSS payouts if you make higher CPF contributions for the next few months. So, in spite of the fact that their salary is $3,000, you decided to contribute $1,665 (based on a $4,500 salary) instead of $1,100. As a result, you get higher JSS payout of $3,375 for April 2020. This is also illegal. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

#5 Inflating CPF Contributions & Deducting These Excess Contributions From Employees\u2019 Wages In Cash<\/h3>\n\n\n\n

You cannot make higher CPF contributions for your employees and then claw it back from them in salary. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

#6 Splitting The Wages Of Employees Across Multiple Entities To Overcome The Salary Limit For The JSS Payroll<\/h3>\n\n\n\n

The JSS payouts are only for the first $4,600 of gross wages. A company that employs someone who earns $6,000 a month will receive only $3,450 (75% of $4,600) in JSS payouts. <\/p>\n\n\n\n

However, some business owners may own multiple affiliate companies and may split the $6,000 salary into two $3,000 salary. Doing so would allow them to claim $2,250 in JSS payouts twice, one from each company. This is illegal.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Individuals And Companies Are Advised To Do Their Part<\/h3>\n\n\n\n

As individuals, we may decide that this is not a problem we need to care. However, if you are a recipient of a purported CPF contribution, it\u2019s your responsibility to report any incorrect CPF contributions. Otherwise, you may be seen as as an accomplice to the fraud. <\/p>\n\n\n\n

Lastly, we like to remind business owners that thinking you know how to game the scheme, that has been introduced at the cost of billions of dollars to the country, doesn\u2019t make you clever. It simply makes you dishonest.<\/p>\n\n\n\n

If you have made a mistake, either knowingly or unknowingly, you are strongly encouraged to declare it by 30 June 2020<\/a>. Employers will also need to rectify the errors via\u00a0CPF Online Application service<\/a>.\u00a0\u00a0No actions will be taken provided the disclosure is accurate and complete.\u00a0 \u00a0<\/p>\n\n\n\n

Read Also:\u00a0<\/strong><\/em>4 Things That Small Business Owners In Singapore Should Know Before Paying Salaries<\/strong><\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"What are some other ways the JSS can be abused?\n","protected":false},"author":4,"featured_media":4518,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[95],"tags":[289,240,262,182],"yoast_head":"\nAbusing The Jobs Support Scheme: 6 Things IRAS Is Warning Companies NOT To Do | DollarsAndSense Business<\/title>\n<meta name=\"description\" content=\"Fake contributions to exploit the Jobs Support Scheme isn\u2019t being clever. 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