SINGAPORE - The taxman has warned employers who abuse the Jobs Support Scheme (JSS) to obtain higher payouts that they would be charged under the Penal Code and face up to 10 years' imprisonment and a fine.

The Inland Revenue Authority of Singapore (Iras) also said on Wednesday (June 3) that it was aware of possible abuses by employers to get higher payouts.

"It is vital that employers contribute the right amount of CPF (Central Provident Fund) for bona fide employees based on the actual wages paid," it said. "(Such abuse) is dishonest and is unfair to the employees, other employers and society at large."

The scheme, which was first announced in February's Budget and enhanced later, pays out 75 per cent of wages for April and May on the first $4,600 of a worker's gross monthly pay, and at least 25 per cent for a further eight months for specified sectors.

Under the Fortitude Budget announced last month, the JSS was extended to 10 months, up from nine, with more firms receiving higher tiers of support.

Some unacceptable practices cited by Iras include:

- Making purported mandatory CPF contributions for non-genuine employees;

- Continuing purported CPF contributions for employees who have been retrenched or put on no-pay leave;

- Maintaining purported CPF contribution amounts based on past wages for employees who have suffered wage cuts;

- Increasing purported CPF contributions for employees without any actual wage increase;

- Inflating purported CPF contributions and deducting these excess contributions from employees' wages in cash; and

- Artificially splitting the wages of employees across multiple related business entities to overcome the salary limit for the JSS payout.

Iras reminded employers to ensure the correct amounts of CPF contributions for the months of February, March and April have been made, saying: "Employers are also to ensure that the amount of mandatory CPF contributions in subsequent months are accurate so that they receive the right amounts of JSS payout."

It added that it takes a very serious view on any attempt to abuse the JSS. It is using data from multiple sources to identify risks, and has set up a team to prevent and detect abuses.

As part of these efforts, Iras may write to employers asking them to conduct self-reviews and to provide declarations or documents to prove their eligibility for payouts.

"The JSS payouts will be made only after these employers have submitted their declarations and verification done by Iras," it said.

"Employers who do not respond or are unable to support the validity of the mandatory CPF contributions made for their employees will not receive JSS payouts."

It also noted the penalties are severe, including being charged under Section 420 of the Penal Code and facing up to 10 years' imprisonment and a fine.

Employers who have made incorrect mandatory CPF contributions to their employees and who would like to declare their errors may do so at the website.

They will also need to rectify the errors via the CPF Online Application service by June 30. No actions will be taken against them, provided the disclosure is accurate and complete.

Businesses or individuals who wish to report potential abuses of the JSS to Iras may send an e-mail to jssreport@iras.gov.sg or report online.