Bosses to get cost adjustment payout by end Oct

Employers will receive the first payment of the Temporary Employment Credit (TEC) from the Government by Oct 30, the Ministry of Manpower said yesterday.

With this, more than 169,000 employers will get payments totalling $356 million for the period of January to June. Eligible employers will be notified from Oct 6.

The TEC was among the Budget 2014 initiatives to help employers alleviate rising wage costs. Specifically, it was to help employers cope with the one percentage point rise in the CPF contribution rate to the Medisave account, a requirement implemented in January.

It was later enhanced to also help employers cope with a lift in the CPF salary ceiling and higher CPF contribution rates for older workers next year.

The CPF ceiling determines the maximum salary that requires a CPF contribution. In Budget 2015, the ceiling was raised from $5,000 to $6,000, to take effect next year. The CPF contribution rates for workers aged above 50 will also increase by one percentage point.

To help employers adjust to the new rules, the TEC programme - with a total budget of about $1.7 billion - will run for three years until the end of 2017, during which the Government will pay out the TEC twice a year, in April and October.

Employers will receive their TEC payment in bank accounts registered with the CPF Board for CPF contributions. Those without a valid account will receive the payments by cheque.

Alongside TEC, several initiatives are also available to help employers manage rising costs while growing their business and talents.

The Wage Credit Scheme has been extended to 2017, the Government announced in Budget 2015. It co-funds 40 per cent of wage increases for citizens earning $4,000 or less monthly.

A version of this article appeared in the print edition of The Straits Times on October 01, 2015, with the headline 'Bosses to get cost adjustment payout by end Oct'. Print Edition | Subscribe