SINGAPORE — A new wage subsidy scheme for companies has been simplified, such that funds will now be disbursed to them based on the number of local workers employed in August, rather than the average number of such workers employed between January and August.

Minister for Manpower Josephine Teo said in a Facebook post on Friday (Sept 4) that this will make the qualifying criteria for the new Jobs Growth Incentive easier to understand. 

The incentive, announced by Deputy Prime Minister Heng Swee Keat last month, will support companies when they hire local employees over the next six months, by subsidising the salaries of all these new local hires in firms that qualify for one year, subject to a cap.

Companies that are eligible will automatically receive the payouts from March 2021, the Ministry of Manpower (MOM) and the Inland Revenue Authority of Singapore (Iras) said in a joint statement on Friday

These payouts will be automatically computed each month based on the employers’ Central Provident Fund (CPF) contributions, they said.

Mrs Teo said she was encouraged to hear that employers have shown great interest in the incentive.

She added: “For the (incentive), the purpose is clear — it is a big push for businesses, regardless of firm size, to expand their manpower and bring forward their hiring plans to create more jobs for Singaporeans.”

To be eligible for the salary support, employers must have achieved an increase in their local workforce in the period from September to February next year, compared with the size of their local workforce in August this year.

This increase must be accompanied by an increase in jobs that pay at least S$1,400 in gross monthly wages, said MOM and Iras. The companies must also have been established on or before Aug 16, 2020.

The Government will provide wage support to eligible firms for all new local hires at all wage levels, with higher support for older workers.

For each new local hire aged below 40, the authorities will co-pay 25 per cent of the first S$5,000 of gross monthly wages for 12 months from the month of hire.

For each new local hire aged 40 and above, the salary support provided to firms will be raised to 50 per cent.

In total, eligible employers can receive up to S$15,000 for each local hire aged below 40 and S$30,000 for each local hire aged 40 and above.

In order to receive the full amount of wage support, companies must continue to meet the eligibility criteria for the 12-month period.

The Jobs Growth Incentive payments will be over and above the Jobs Support Scheme payouts that firms will receive for all its local employees, said MOM and Iras.

In addition, to encourage firms to retain their existing employees as far as possible, the authorities will reduce the payout if a worker employed at the company as of August this year leaves the firm after that same month.

The reduction will be computed based on the ratio of existing employees who have left the firm to the total number of existing employees as of August this year, or 5 per cent, whichever is higher.