THE Jobs Credit scheme works to the benefit of workers, said Prime Minister Lee Hsien Loong this evening, responding to critics in Parliament.

He noted that many MPs had, during the Budget debate, raised many concerns of Singaporeans.

The chief concern was whether workers would be able to hold onto their jobs.

The Jobs Credit scheme 'specifically addresses this concern',' he said.

But some parliamentarians criticised it, saying it benefits companies more than workers.

'Perhaps, they have not understood how the scheme works,'' Mr Lee said as he launched into his explanation.

The $4.5 billion scheme gives companies a cash grant of 12 per cent of an employee's monthly wage, for up to $2,500. But this grant is only for Singaporeans and permanent residents on their payroll.

Mr Lee said by giving the grant, the Government is in effect paying for part of workers' CPF contributions, on behalf of employers.

It works out to an average 9- point cut in an employer's CPF contribution. Companies now pay a maximum of 14.5 per cent.

This means the company pays less of the worker's salary while the worker gets the same amount of money, he added.

'This way, companies will be able to keep more of their workers instead of retrenching them.

'Without the Jobs Credit, companies might have to cut CPF or wages to save jobs.'

The other advantage is that the scheme reduces the cost of hiring Singaporean workers, making 'it more attractive to hire Singaporeans rather than foreign workers''.

However, he was quick to add that 'we should not push out foreign workers as that would harm both businesses and Singaporean workers'.

'The Jobs Credit is a good way to encourage companies to hire more Singaporeans.''

The Prime Minister also noted the pioneering nature of the scheme: 'a major policy different from anything the Government had done before''.

Unions understand this, he said, and that is why they, as well as companies, strongly support the scheme.

He noted that in Parliament, labour MPs and unionists shared several examples of how companies had deferred layoffs or retrenched fewer workers, or even added more jobs, because of Jobs Credit.

'I hope all Singaporeans will support it as well,' he said.