SINGAPORE - The Wage Credit Scheme (WCS) is a Government programme that subsidises wage increases to help businesses during the restructuring period. Here are five things to know about the scheme:
What does the scheme provide?
WCS co-funds 40 per cent of wage increases given in 2013, 2014 and 2015 for eligible Singaporean workers. They must be earning a gross monthly wage of $4,000 and below and receive pay raises of at least $50.
For similar wage increases given in 2016 or 2017, employers will receive co-funding of 20 per cent. Wage increases of at least $50 given this year which are sustained in the following years by the same employer will continue to be co-funded at 20 per cent in 2016 and 2017.
How long is the scheme running for?
Started in 2013, it was originally a three-year, $3.6 billion package due to end this year. Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam announced in this year's Budget Statement that it would be extended for another two years, though at half the current rate of subsidy.
Mr Tharman said this is to phase the scheme out gradually while giving Singapore employers more time to adjust to the tight local labour market.
How much money has been given out through the scheme?
So far, some $2.2 billion has been handed out under the WCS in two tranches. More than 85,000 employers qualified for the scheme this year, up from 74,000 last year. Small and medium enterprises received around three quarters of around $1.4 billion disbursed this year.
How do employers apply for wage credit?
Application is not required. Payouts are automatically credited to eligible employers' bank accounts or issued as cheques, by March 31 each year for wage increases paid in the previous year.
What are companies using the money for?
Some examples are improving productivity and employee welfare. The United Overseas Bank and DBS Bank are spending their payouts on development programmes for employees such as training or health and wellness initiatives. Other companies such as family business Seng Heng Engineering, are upgrading machinery and automation.