Employers will continue to receive a subsidy for hiring older workers for at least another year, the Ministry of Manpower (MOM) announced yesterday.
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 rehire Singaporeans who are aged 65 and above, and who earn up to $4,000 a month.
Mr Lim said the Government has paid out over $22 million to more than 49,000 employers for rehiring about 110,000 of these older workers in the first half of this year.
The wage offset was introduced during the Budget in 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 until 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 fresh extension comes in the wake of the MOM's latest labour report, which was released on Monday and showed that a continued tight labour market had pushed up salaries.
National Trades Union Congress (NTUC) deputy secretary-general Heng Chee How said the labour movement welcomed the move, adding that it could help employers cope with the higher training and healthcare costs that hiring older workers might incur.
However, he warned 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.
"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 in 2017, companies are ready, and workers are ready."
Packaging company TCG Rengo re-employs 16 older workers, five to six of whom are eligible for the 3 per cent subsidy. Managing director Phua Thye Hin, 56, said: "It's useful to defray some of our costs. The extension is a welcome message from the minister."
In order to reduce the manual demands upon its older workers, the company has been investing in equipment such as automatic stacking machines and devices to push paper rolls weighing a tonne or more.