Employers of older workers will receive government funding from next year to offset the cost of their wages and the rising Central Provident Fund (CPF) contribution rates.
Announcing this as part of a new Senior Worker Support Package to help Singaporeans work longer if they want to, Deputy Prime Minister Heng Swee Keat said: "Even as we support workers' aspirations to work longer, we hear employers' concerns. As part of our unique tripartite system, the Government has stepped up to support both our workers and our enterprises."
The first measure is a Senior Employment Credit, which will provide wage offsets of up to 8 per cent - depending on the age of the employee - for employers of Singaporean workers aged 55 and above and earning up to $4,000 a month.
The highest amount is for workers who are at least of the re-employment age, which is 67 and will go up to 68 on July 1, 2022.
Employers of workers aged 55 to 59 can receive up to 2 per cent in subsidies next year, and then 1 per cent in 2022.
The new scheme runs for two years, from Jan 1 next year until the end of 2022, and replaces two older schemes which expire at the end of this year. The older schemes together provided employers with wage offsets of up to 11 per cent of the monthly pay for Singaporean workers aged 55 and above and earning up to $4,000.
Bosses will also receive a CPF transition offset to cover half of the increase in their contribution rates for older workers next year, up to the CPF monthly salary ceiling of $6,000. They will be contributing 0.5 percentage point or 1 percentage point more for workers aged 55 to 70 next year, based on the worker's age.
CPF contribution rates for those aged 55 to 70 are to be raised gradually over this decade until those aged 60 and below enjoy the full CPF rates. The rates currently begin to taper down from 37 per cent after workers turn 55.
Details on the other two measures under the Senior Worker Support Package will be provided in the coming weeks.
They comprise an early adopter grant to support companies which formally raise their internal retirement age and re-employment age ahead of the national timeline, and a grant for companies which commit to offering part-time work for eligible older workers who request for it.
Mr Heng said that the Government will provide more support to help Singaporeans remain active and contribute to society and the economy as they live longer.