SINGAPORE - Payouts to eligible employers for the Wage Credit Scheme - a government grant that co-funds wage increases - will go completely cashless from March next year.
The Ministry of Finance (MOF) and the Inland Revenue Authority of Singapore (Iras) said in a joint statement on Wednesday (Dec 11) that the move, which will mean cheques will no longer be issued for the payouts, is in line with Singapore's smart nation efforts.
With the change, all Wage Credit Scheme payouts from March, until the final payouts in 2021 when the scheme is expected to end, will be credited directly to employers' bank accounts through PayNow Corporate or Giro.
Payouts happen once a year and are calculated based on the total wage increase an employer has given to all its employees the previous year.
Employers do not need to apply to receive payouts from the scheme. Those who are eligible will receive letters from Iras by the end of March 2020 that will also inform them how much they will get in payouts.
MOF and Iras advised employers who do not already have a PayNow Corporate account to set up one or register for Giro early.
Wage Credit Scheme payouts were given to eligible employers through PayNow Corporate for the first time this year.
PayNow Corporate, a cashless fund-transfer service, was launched in August last year to allow businesses to receive funds directly from local accounts at participating banks.
With PayNow Corporate, businesses can make and receive payments to and from each other digitally, almost instantly and round the clock, which can help them save time and cut costs.
The Wage Credit Scheme co-funds wage increases for Singaporeans who earn a gross monthly wage of up to $4,000.
For employers to be eligible for the scheme's payouts, they must have given Singaporean employees earning this salary a gross monthly wage increase of at least $50 in 2019, at least $50 in 2018 or 2017, or both.
Employers must also have paid the employees' mandatory Central Provident Fund (CPF) contributions to the CPF Board by Jan 14 next year.
The Wage Credit Scheme was introduced in 2013 and was originally intended to last three years. In 2015, it was extended by two years.
It was further extended by another three years in 2018 to support businesses embarking on transformation efforts and to encourage the sharing of productivity gains with workers.
In March, more than 90,000 employers were given more than $600 million in payouts under the scheme. About 70 per cent of the funds went to small and medium-sized enterprises.
Employers who want to check their eligibility for payouts from the scheme or find out more can visit www.iras.gov.sg/irasHome/wcs.aspx or contact Iras on 1800-352-4727.