Coronavirus pandemic: Solidarity Budget

All firms to get 75% wage subsidy for local employees this month

First payout under enhanced Jobs Support Scheme will also be brought forward to April

The wage subsidy applies to the first $4,600 of wages paid this month for each of the more than 1.9 million Singaporean and permanent resident employees here.
The wage subsidy applies to the first $4,600 of wages paid this month for each of the more than 1.9 million Singaporean and permanent resident employees here. ST PHOTO: MARK CHEONG

Firms in all sectors will have 75 per cent of their local employees' wages subsidised for the month of April, Deputy Prime Minister Heng Swee Keat said yesterday.

They will also receive the first payout under the enhanced Jobs Support Scheme this month, instead of next month, to help with cash flow, he told Parliament in announcing a third set of measures to save businesses and jobs from the fallout of the coronavirus pandemic.

The wage subsidy applies to the first $4,600 of wages paid this month for each of the more than 1.9 million Singaporean and permanent resident employees.

The scheme - first announced in the Budget in February - was already enhanced in the supplementary budget last month to give a 25 per cent subsidy on the wages of all local employees, with higher subsidies of 50 per cent for those in food services and 75 per cent for those in tourism and aviation.

The monthly wage cap was raised from $3,600 to $4,600, and the payouts were to be in three tranches in May, July and October.

The higher support for April is temporary, and the scheme will revert to normal levels beyond that.

Mr Heng said: "The aim of this strong support is to directly reduce firms' wage costs to help them retain their workers. I expect firms to make use of this Jobs Support Scheme to continue paying your workers and refrain from putting workers on no-pay leave during this period or, worse, retrenching them. We will monitor the situation carefully together with our tripartite partners and take action where needed."

The enhanced scheme was among additional measures he announced, which he termed the "Solidarity Budget", to help Singapore cope with the circuit breaker to stem the spread of Covid-19.

Mr Heng noted that many firms cannot operate at all or can operate only at a much reduced level in the coming weeks owing to the strict "circuit breaker" measures announced last Friday. Most workplaces, apart from those providing essential services or in key economic sectors, will be closed for four weeks from today to break the chain of transmission of Covid-19.

But firms should still retain and pay their workers, stressed Mr Heng. This will also enable them to resume operations quickly when the circuit breaker is lifted, he said.

The additional subsidy from the temporary enhancement will first be calculated based on wages paid last October, and later adjusted based on wages paid this month.

This means employers who do not pay their staff wages this month will not gain from the temporary increase to the payouts.

Mr Heng clarified that the salary ceiling, which is based on the median wage level of residents in full-time employment, does not mean workers earning beyond that amount do not qualify. It means regardless of how much they earn, the maximum subsidy will be 75 per cent of $4,600, which is $3,450.

Firms on Giro and PayNow will start getting the first payout next week, while those that are not will get their payouts by cheque, starting about a week later.

The Manpower Ministry said yesterday employers of at least 10 workers that implement cost-saving measures in the circuit-breaker period from today to May 4 must notify it if the measures cause more than a 25 per cent reduction in their employees' pay. There was previously no minimum pay reduction criterion.

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A version of this article appeared in the print edition of The Straits Times on April 07, 2020, with the headline All firms to get 75% wage subsidy for local employees this month. Subscribe