On 18 February 2020, Deputy Prime Minister and Finance Minister Heng Swee Keat delivered the Budget 2020 in parliament.

As part of the measures to deal with the Covid-19 outbreak, he announced the Stabilisation and Support Package, a special S$4 billion package to help local workers stay employed and to support enterprises. This is comprised to two parts: the new Jobs Support Scheme (JSS), and enhancements to the existing Wage Credit Scheme.

Alan Lau, Head of Financial Services, Tax, KPMG Singapore, summarised the Stabilisation and Support Package as such: “The government’s introduction of a $4 billion Stabilisation and Support Package is a most welcome reprieve for Singapore. It turns the current difficult global outlook into a golden opportunity for workers’ reskilling, which will help with job preservation. More importantly, it is a welcomed cushion for all facets of the Singapore economy and especially the man on the street, and readies the country perfectly for rebound when the global economy turns around.”

In this article, we introduce and analyse the JSS, and what it means for employers and employees in Singapore

What is the Jobs Support Scheme?

Essentially, the JSS temporarily offsets local employee wages so that they can stay employed during this downturn.

Specifically, employers will receive an 8% cash grant on the gross monthly wages of each local employee (applicable to Singapore Citizens and Permanent Residents only) for the months of October 2019 to December 2019, subject to a monthly wage cap of $3,600 per employee.

Employers do not need to apply for the JSS. The grant is computed based on CPF contribution and is planned to be sent to employers by end May 2020.

The Budget 2020 website has a table of the JSS computation, reproduced below:

	October 2019	November 2019	December 2019	Total
Wages paid to local employee (excluding employer CPF)	$3,000	$3,500	$4,000	$10,500
Qualifying wage (capped at $3,600)	$3,000	$3,500	$3,600	$10,100
Jobs Support payout to employer (8% of qualifying wage)	$240	$280	$288	$808

 

What it means for employers/employees

The JSS will help workers retain their jobs by subsidising their wages. It helps businesses retain their workforce by defraying the costs of keeping jobs through the wage offset.

“Our foremost concern is jobs,” said Minister Heng during the Budget 2020 speech. “We want to help our workers retain their jobs, and use any lull period to upgrade their skills, to be ready when the tide turns.”

His comments not only highlight how the scheme will help workers retain their jobs, but also the larger government focus on retraining and upskilling during the “unplanned downtime”. It will work in tandem with the enhancements to the Wage Credit Scheme, SkillsFuture credit top-up, and increased funding for the Adapt and Grow Initiative to push employees to upgrade themselves, especially in the digital arena.

Response and Analysis

The JSS is similar to the Jobs Credit Scheme in 2009 that helped businesses withstand the impact of the 2009 Global Financial Crisis. The Scheme, combined with the other measures of the Stabilisation and Support Package, has been generally well-received.

Mr Vincent Tan, president of the Restaurant Association of Singapore (RAS), said these are “definitely helpful” for employers when it comes to retaining their local workers. During a Heart of the Matter podcast on Singapore’s budget, Kurt Wee of Singapore Business Foundation (SBF) expressed his gratitude for the “very, very comprehensive slew of support measures” to upskill the workforce, even more imperative during this outbreak.

However, some expressed reservations during the parliamentary debate about the timing and duration of the scheme. Mr Patrick Tay (West Coast GRC) suggested that payouts for the JSS could be brought forward. Many workers, especially freelancers and the self-employed, also asked that the SkillsFuture top-up scheduled for October be rolled out earlier so they can make use of the downtime to train themselves.

In response to these concerns, Minister Heng moved to bring forward the payments from end-July to end-May during the Budget Debate Round-Up Speech. “In the last few weeks, the agencies involved have redoubled efforts, and are now targeting to bring forward the payment for JSS from end-July to end-May. Employers using bank crediting will get the payout about a week earlier,” he said.

In this way, the JSS will help ensure that workers in Singapore can stay employed through this challenging period.

References and Further Information

Stabilisation and Support Package

Budget Speech 2020

Budget Debate Round-Up Speech 2020

Singapore Budget 2020 Full Coverage by Singapore Business Review

Heart of the Matter Podcast – Singapore Budget 2020: A report card

 

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