28 May 2020
Introduction
In light of the easing of Singapore's circuit breaker, Deputy Prime Minister and Finance Minister Heng Swee Keat presented the S$33 billion Fortitude Budget to the Singapore Parliament on 26 May 2020. The Fortitude Budget is the fourth budget announced by the Singapore government in 2020 (following the Unity Budget, the Resilience Budget and the Solidarity Budget) and is designed to help businesses and individuals adapt and build resilience amid the COVID-19 pandemic.
Set out below is a summary of the employment-related subsidies provided by the Fortitude Budget:
1. Enhancements to the Job Support Scheme
The enhancements to the Job Support Scheme are as follows:
a. Extension of the Job Support Scheme pay-outs for one additional month in August 2020, resulting in a total coverage of 10 months of wages.
b. Firms that cannot resume operations immediately after the circuit breaker period (including retail outlets, fitness facilities and cinemas) will receive wage support of 75% until August 2020 or when they are allowed to re-open, whichever is earlier.
c. Re-classification of firms in the Job Support Scheme tiers. Firms in more severely impacted sectors such as aerospace, retail and marine and offshore sectors will now receive wage support of either 75% or 50% depending on the sector. Such firms only received wage support of 25% previously.
2. SGUnited Jobs and Skills Package
Under the SGUnited Jobs and Skills Package, it is intended for approximately 40,000 jobs, 25,000 traineeships and 30,000 skills training to be created.
a. SGUnited Jobs – Out of the 40,000 jobs to be created, it is expected for 15,000 to be from the public sector and 25,000 to be from the private sector.
b. SGUnited Traineeships – Out of the 25,000 traineeships to be created, 21,000 will be for the SGUnited Traineeships Programme catered to local first-time job seekers and 4,000 for the SGUnited Mid-Career Traineeships Scheme catered to local mid-career job seekers to learn new skills and start new careers.
c. SGUnited Skills – This provides training courses to help jobseekers upgrade their skills while looking for a job. A training allowance of S$1,200 will be provided for the course duration to cover basic expenses.
d. Hiring Incentive – Employers who hire local employees who have completed the SGUnited Traineeships and SGUnited skills training courses will be able to receive subsidies. For eligible employees under the age of 40, the subsidy will be 20% of the monthly salary of those employees for 6 months, capped at S$6,000 in aggregate. For eligible employees who are 40 and over, the subsidy will be 40% of the monthly salary of those employees for 6 months, capped at S$12,000 in aggregate.
3. COVID-19 support grant
During discussions with employees, employers can inform employees who will be losing their jobs, who will be placed on no-pay leave or who will face significantly reduced salaries that they may be able to receive up to S$800 per month for 3 months from the Singapore government.
4. Foreign worker levy waiver and rebate
The foreign worker levy waiver and rebate will be extended for businesses who are not allowed to resume operations on-site immediately after the circuit breaker period. Such businesses include those in the construction, marine and offshore, and processing sectors. The waiver and rebate are as follows:
a. June 2020 – 100% waiver and S$750 rebate.
b. July 2020 – 50% waiver and S$375 rebate.
5. Deferment of higher Central Provident Fund (CPF) contribution rates
The planned increase in CPF contribution rates for senior workers will be deferred by one year, from 1 January 2021 to 1 January 2022.
The CPF Transition Offset scheme will also be deferred until after the CPF higher contribution rates take effect.
For further information, please contact:
Thomas Choo, Clyde & Co
thomas.choo@clydeco.com
