Many businesses have folded or scaled down following the recession brought about by the Covid-19 pandemic.
In a bid to cushion the blow, $4 billion under the Jobs Support Scheme (JSS) will be paid out to 140,000 employers from July 29 to help them retain their workers.
This will help businesses to pay the wages of some 1.9 million local employees in total, the Ministry of Finance (MOF) said on Sunday (July 19).
With this latest round of payouts, the total amount disbursed will exceed $15 billion, said the ministry in a joint statement with the Inland Revenue Authority of Singapore (Iras).
The JSS was introduced in the first round of Budget support packages announced by Deputy Prime Minister Heng Swee Keat in February.
Under the scheme, firms can get up to 75 per cent of the first $4,600 of gross monthly wages for each local worker subsidised.
Sectors more badly hit by the pandemic, such as the aviation and tourism sectors, will get more support under the scheme.
MOF and Iras said this month’s payment goes towards supporting wages paid to local workers in February and March.
In addition, all employers will also get 75 per cent support for wages paid during the circuit breaker in April.
Part of this support has already been given as an advance that month “to provide immediate cash-flow support”, said the authorities.
As the amount disbursed was calculated based on last October’s wages, adjustments will be made to the upcoming payout according to actual wages paid this April, they added.
Eligible employers will be notified by post of the payout amount and can also log in to myTax Portal to view the electronic copy of the letter.
Those with PayNow Corporate or Giro arrangements with Iras can expect their payouts from July 29.
Others will receive their payouts through cheques from Aug 4 but can receive their payouts earlier if they sign up for PayNow Corporate with their banks by Friday (July 24).
Employers should make sure that mandatory CPF contributions made for their employees are accurate, so that they receive the right amounts of JSS payout, added Iras and MOF.
Businesses who have benefited from the JSS said they were grateful for the support.
Mr Pek Lian Guan, chief executive of construction firm Tiong Seng Holdings, said the scheme has been critical to keeping its workers.
“Without the JSS support, we would not have been able to retain our staff and continue to pay their salaries,” he said.
Similarly, Mr Chin Zheng, business development manager at eatery Stuff’d, said the payouts helped to keep its outlets open during this “unprecedented period of stress”.
“With company funds supplemented by the JSS, we were able to further support our team with multiple measures,” he said.
These included interest-free loans and paying staff from vulnerable groups to stay at home during the pandemic.
Iras and MOF also warned of severe penalties for any attempts to abuse the scheme, including having the payouts denied, and being jailed for up to 10 years and fined.
As part of the checks for JSS eligibility, a very small number of employers will receive letters from Iras to ask them to verify their CPF contributions and to provide declarations or documents to substantiate their eligibility for JSS payouts.
Their payouts for this month will be withheld in the meantime but will be paid out once the information is in order, said MOF and Iras.
Posting on Facebook on Sunday, Mr Heng, who is also Finance Minister, urged all employers to do their utmost to retain their staff.
He also said businesses should take the opportunity to transform their operations and up-skill employees during this period.
“Together, we can emerge stronger from this crisis,” he said.
Text: Tee Zhuo / The Straits Times / July 2020
Additional text: Sally Manik
Featured image: Rawpixel / Envato Elements