Govt to subsidise wages of all local workers by at least 25% amid Covid-19 outbreak

Firms in the food services sector, including hawker stalls, will receive higher support, at 50 per cent of wages.
Firms in the food services sector, including hawker stalls, will receive higher support, at 50 per cent of wages.ST PHOTO: CHONG JUN LIANG

SINGAPORE - Firms will receive wage subsidies of between 25 per cent and 75 per cent for all local workers as the Government makes "bolder and more aggressive moves" to save jobs and keep locals employed amid the coronavirus outbreak.

This is up from the 8 per cent wage subsidy in the Jobs Support Scheme announced in the Budget statement in February. The help will also last for nine months, instead of three, up to the end of this year.

Deputy Prime Minister Heng Swee Keat said on Thursday (March 26) that a total of $15.1 billion will now be allocated to the enhanced Jobs Support Scheme, up from the original $1.3 billion package.

This is more than twice the level of support provided during the global financial crisis in 2009, he told Parliament.

"We cannot prevent an economic recession as the external health and economic situation will evolve beyond our control. But it will help us mitigate the extent of the downturn and more importantly, help save jobs, and protect livelihoods," said DPM Heng in announcing the Supplementary Budget.

"With this support from the Government, I urge employers to do your part to hold on to your workers."

The Ministry of Trade and Industry earlier on Thursday cut its 2020 growth forecast to between -4.0 and -1.0 per cent, from an earlier estimate of -0.5 per cent to 1.5 per cent. The last time Singapore posted a full-year recession was in 2001 during the dot.com crash.

DPM Heng announced a slew of measures to support the immediate priority of saving jobs, supporting workers and protecting livelihoods, including help for the self-employed, lower-income workers and the unemployed - measures that account for over one-third of the $48 billion Supplementary Budget.

For employed workers, the top priority is to help them stay in their jobs, said DPM Heng. While his Budget statement last month introduced the Jobs Support Scheme and enhanced the Wage Credit Scheme to preserve and enhance jobs, "the situation now calls for bolder and more aggressive moves to save jobs and keep workers in employment", he said.

 
 
 
 

The basic cash grant of 25 per cent applies to all Singaporean and permanent resident employees, who number more than 1.9 million.

Firms in the food services sector, including hawker stalls, will receive higher support, at 50 per cent of wages. Firms in the aviation and tourism sectors - which are the worst hit by the Covid-19 outbreak - will receive 75 per cent of wages. These include airlines, hotels and operators of meetings, incentives, conferences and exhibitions venues.

The support will apply to the first $4,600 of gross monthly wages per local employee, which is the median wage in Singapore. Gross monthly wages include employee contributions to the Central Provident Fund (CPF).

Business owners will not receive subsidies for their own wages.

The qualifying salary was raised from the original $3,600 level to provide greater support for middle-income workers.

Employers will receive payouts in three tranches, in May, July and October.

They do not need to apply for the scheme as it will be computed based on their CPF contribution data. Those eligible for higher tiers of support will be informed closer to the date of the first payout.

Enhancements to the Wage Credit Scheme, which co-funds wage increases for Singaporean employees, were announced in last month's Budget statement

The Government's contributions for qualifying wage increases for last year and this year were raised by five percentage points. It will pay 20 per cent of increases given last year, and 15 per cent of those given this year.

The monthly wage ceiling was also raised to $5,000, up from $4,000, for qualifying wage increases given last year and this year.


Correction note: The article has been edited to accurately reflect when employers will receive the Jobs Support Scheme payouts. We are sorry for the error.