140,000 employers to receive JSS payouts to retain and pay workers
The Jobs Support Scheme (JSS), introduced since the Unity Budget on 18 February 2020, has helped to save jobs by providing wage support for local employees. We further enhanced the JSS during the Resilience, Solidarity and Fortitude Budgets to continue saving jobs, through additional wage support to employers.
Over 140,000 employers, with 1.9 million local employees, will receive payouts from 29 July 2020 totalling over $4 billion under the JSS.
Employers who have made mandatory CPF contributions for their local employees will be qualified to receive the JSS payouts. With this payout, over $15 billion would have been disbursed.
For the payment in July, employers will receive up to 75% support for the first $4,600 of wages paid to local employees in February and March 2020. Employers in the aviation and tourism sectors will receive 75% support; those in the food services, retail, arts and entertainment, land transport, and marine and offshore sectors will receive 50% support; and employers in all other sectors will receive 25% support.
In addition, all employers will receive 75% support for wages paid in April 2020, during the Circuit Breaker. Part of this wage support was disbursed as an advance in the previous payout in April to provide immediate cash flow support. As the amount disbursed was calculated based on October 2019 wages, necessary adjustments will be made in the upcoming payment in July, in accordance with actual wages paid in April 2020.
Eligible employers will be notified by post of their payout amount. They can also log in to myTax Portal to view the electronic copy of their letter.
Earlier JSS payouts for employers with PayNow Corporate or GIRO
Employers with PayNow Corporate or GIRO arrangements with IRAS can expect to receive the JSS payouts earlier from 29 July 2020. Other employers will receive their cheques from 4 August 2020.
Employers are encouraged to sign up for PayNow Corporate by 24 July 2020 to receive their payouts earlier and seamlessly. Employers can sign up for PayNow Corporate by linking their UEN / NRIC / FIN to their bank accounts via Internet banking for instantaneous approval by the banks. For assistance, employers can approach their respective banks.
Review of mandatory CPF contributions and penalties for abusing JSS
Employers are to ensure that mandatory CPF contributions made for their employees are accurate, so that they receive the right amounts of JSS payout.
There are severe penalties for any attempt to abuse the JSS. Other than having their JSS payouts denied, offenders can be charged under Section 420 of the Penal Code, where they may face up to 10 years of imprisonment and a fine. Businesses or individuals who wish to report any malpractices or potential abuses of the JSS may do so via email to Inland Revenue Authority of Singapore.
As part of the checks for JSS eligibility, a very small number of employers will receive letters from IRAS asking them to verify a self-review of their CPF contributions and to provide declarations or documents to substantiate their eligibility for JSS payouts. Their July 2020 payouts will be withheld for the time-being, pending the self-review and verifications by IRAS. Once the information is in order, they will receive the payout promptly.
In the Solidarity Budget, the JSS was raised to provide 75% wage support on the first $4600 of gross monthly wages for local employees across all sectors for the month of April 2020. The Government will extend the 75% JSS across all sectors for another month, i.e. in the month of May 2020. This enhanced payout for May 2020 will be disbursed by end-May 2020 for employers on PayNow or having existing GIRO arrangements with IRAS. Other employers will start receiving their cheques in early-June. The Government said that it encourages all employers to sign up for PayNow to receive their payouts faster.
Similar to the arrangement for April, the 75% subsidy for May 2020 will first be computed and disbursed based on November 2019 wages, thereby ensuring speedy disbursement. Subsequently, the Government will adjust future JSS payouts to account for actual wages paid in May 2020, relative to November 2019.
As part of the Government’s efforts to save jobs and support wages with timely disbursement, the additional JSS subsidy (75% across all sectors in May) will be computed using November 2019 wages as a proxy. Actual subsidy will be determined later based on the wages paid in May 2020. This means that employers who do not pay wages in May 2020, or who place employees on mandatory no-pay leave in the month of May will not benefit from the 75% subsidy.
JSS payouts are intended to offset and protect local employees’ wages. Employers must act responsibly and fairly, taking reference from the tripartite advisory on salary and leave arrangements during the circuit breaker period. Employers who put local employees on mandatory no-pay-leave or retrench them will not be entitled to the enhanced JSS payout for those employees.
JSS to cover shareholder-directors
The Government will also extend the Jobs Support Scheme payout, to cover wages of employees of a company who are also shareholders and directors of the company (shareholder-directors). For companies limited by guarantee, this applies to employees who are both members and directors of the company and as defined in Section 4(1) of the Companies Act.
This support will only apply to companies that were registered on or before 20 April 2020, and for the wages of shareholder-directors with Assessable Income of $100,000 or less for Year of Assessment 2019. This is expected to benefit about 50,000 shareholder-directors. The May 2020 and subsequent JSS payouts will include support for qualifying shareholder-directors. The May 2020 payout will also include back-payment for companies with qualifying shareholder-directors whose wages were excluded from the first JSS payout in April 2020.