3% wage subsidy for older workers extended for at least a year

A wage subsidy of up to 3 per cent for employers who rehire locals aged 65 and above will be extended beyond its original deadline of the end of this year.
A wage subsidy of up to 3 per cent for employers who rehire locals aged 65 and above will be extended beyond its original deadline of the end of this year. PHOTO: ST FILE

SINGAPORE - Employers will continue to enjoy subsidies for hiring older workers for at least another year, the Manpower Ministry (MOM) announced on Tuesday (Dec 1).

A wage subsidy to reward those who voluntarily re-employ older locals will be extended beyond its original deadline of the end of this year, Manpower Minister Lim Swee Say said during a site visit to packaging firm TCG Rengo.

Under the scheme, employers can get up to 3 per cent more wage credit if they re-hire Singaporeans who are aged 65 and above, and who earn up to $4,000 a month.

Mr Lim said that the Government has paid out over $22 million to more than 49,000 employers for re-hiring about 110,000 of these older workers in the first half of this year.

He added: "We are determined to keep enhancing jobs at workplaces to make them more age-friendly, so that as workers grow old, they can keep performing jobs in a easier, safer, and smarter manner.

"At the same time, (we need to) keep upgrading the skill and capability of the mature worker to make (him or her) more employable."

The wage offset was first introduced during the Budget this February to help employers manage costs, in the face of legislation to raise the re-employment age ceiling to 67 by 2017.

The subsidy will now be extended to whenever the new law kicks in. Under current legislation, employers must offer re-employment to eligible workers when they turn 62, up to the age of 65.

The 3 per cent subsidy is a top-up of the Special Employment Credit scheme, which subsidises the wages of older locals earning up to $4,000 a month. Next year, employers who hire workers aged 50 and above will get 8 per cent of these employees' monthly wages, a proportion which will be bumped up to 11 per cent if the worker is aged 65 and above.

The fresh extension comes in the wake of the MOM's latest labour report, which was released on Monday and showed that continued labour market tightness and manpower shortage in some industries had pushed up salaries.

National Trades Union Congress (NTUC) deputy secretary-general Heng Chee How said the labour movement welcomed the move, saying it could continue to help employers cope with the higher training and healthcare costs that hiring older workers might incur.

He warned, however, against using the additional credit in the "most passive way", treating it as a mere subsidy that lowers payroll costs, instead of pumping it into training or restructuring to meet the new legislation.

"We must think about what we must do to our HR processes, our operations methods, and our technology and equipment...so that when the law kicks in 2017, companies are ready, and workers are ready. Then the coming of the law will be a non-issue."

Packaging company TCG Rengo has 16 re-employed workers, five to six of whom are eligible for the 3 per cent wage subsidy.

Managing director Phua Thye Hin, 56, said the subsidy has been useful in defraying costs and keeping wages competitive.

In order to reduce the manual demands upon their older workers, they have been investing in equipment such as automatic stacking machines and devices to push paper rolls as heavy as a tonne. The latter previously had to be rolled by hand.

Production planner Ho Tzong Ming, 64, is looking forward to a software upgrade next March that will render the process of putting in job orders paperless. Previously he and his team would have to run about between different sections of the factory to ensure the various orders went through.

Mr Ho, who has been re-employed twice, said he hopes to keep working for TCG Rengo in the foreseeable future. "I need the job to save money. I don't want to put more pressure on my sons - one has just started working and the other is still studying in university.

"I don't know if I could find another job in this market at my age. I have been in this job for 30 years and here, I can transfer my skills to others. If I went out there, I would have to start again from scratch and it would be a waste of time."

oliviaho@sph.com.sg