Covid-19 Singapore Government Measures to Help Employees and Businesses
In order to minimize further spread of the COVID-19, the Singapore Ministry of Health has recently implemented an elevated set of safe distancing measures. Dubbed as the “circuit breaker” measures (to try to break the circuit of community infections), non-essential businesses and workplaces will be closed as of 7 April 2020 and all schools will move to full home-based learning at least until 4 May 2020. To support workers and businesses affected by the “circuit breaker” distancing measures, the Singapore Government has enhanced its economic assistance measures in a new Solidarity Budget worth SGD5.1 billion. Together with previously announced assistance programmes, the support given to workers and businesses will now be as follows:
Help for Employers – Summary
- Wage support for Singaporean and Permanent Resident employees for 9 months.
- Foreign Worker Levy rebate and waiver for the month of April 2020.
- Increase in the Singapore Government’s risk share in special loan financing schemes.
- Rental waiver for industrial, office and agricultural tenants of government agencies and Property Tax Rebates to be passed on to all non-residential tenants.
- Funding support of up to SGD105,000 per business over two years to incentivize implementation of flexible work arrangements for local employees.
Help for Individuals & Employees – Summary
- Cash payouts to eligible self-employed persons.
- Cash grants to individuals who lost their jobs or suffered reduced personal incomes due to COVID-19.
- A one-off payout of SGD600 that will be given to all adult Singaporeans.
Help for Employers
Wage Support through the Enhanced Job Support Scheme
The Job Support Scheme (“JSS”) was first announced in Budget 2020 in February. As part of the JSS, the Singapore Government will co-fund a portion of the gross monthly wages paid to each local employee for 9 months. The JSS was subsequently boosted in the Resilience Budget to provide a subsidy of 25% of the wages of all local employees, with higher subsidies of 50% for those in food services and 75% for those in aviation and tourism.
As part of its latest round of supportive measures, the Solidarity Budget has further enhanced the JSS wage support for the month of April 2020. The wage support under the JSS is only for Singaporean and Permanent Resident employees and does not extend to Employment Pass and S-Pass holders. Under this enhanced scheme, the Government will pay 75% for the first SGD4,600 of gross monthly wages of every local worker in employment. This cap of SGD4,600 does not mean that those who are earning more will not get any wage support. Instead, it means that businesses will get wage support for every single local employee, but the maximum subsidy for each of these workers will be capped at SGD3,450, or 75% of SGD4,600. All employers who have made CPF contributions for their local employees will qualify for the payout. This top-up will first be computed based on wages paid in October 2019.
In addition, the first payout under the JSS has been brought forward from May 2020 to April 2020. Hence, employers can expect to receive three JSS payments in April, July and October 2020. The top-up to 75% wage support for April 2020 wages will be disbursed together with the first payout in April 2020 to better support businesses with cashflow. Companies using Giro and PayNow will receive their payouts in the next week and other companies will receive their payouts via cheque in the following week. Wage support past April 2020 will remain at 75% for businesses in the aviation and tourism sector, 50% for businesses in food services, and 25% for all other sectors.
Businesses are expected to make use of the JSS to continue paying their employees and to refrain from putting employees on no-pay leave during this period or retrenching their employees. This is also to enable them to resume operations quickly once the “circuit breaker” measures are lifted.
Foreign Worker Levy Waiver and Rebate
In the same spirit, the Solidarity Budget also introduces labour cost support measures for employers that hire foreign workers on Work Permits and S-Passes. To reduce labour costs for such employers and relieve the pressures on their cashflow, the Foreign Work Levy due in April 2020 will be waived. Additionally, such employers will be provided with a Foreign Worker Levy Rebate of SGD750 for each Work Permit or S-Pass holder, based on previous levies paid in 2020. Employers can expect to receive the rebate as early as 21 April 2020.
Enhanced Financing Support Measures
Further enhancements to financing support for enterprises will be made to ensure continued credit access. Announced under the Solidarity Budget, the Singapore Government will increase its risk share of loans made under several loan financing schemes from 80% to 90%, for loans initiated from 8 April 2020 to 31 March 2021. The applicable loan financing schemes are the Temporary Bridging Loan Programme, the Enterprise Financing Scheme’s SME Working Capital Loan and the Trade Loan.
Additional measures have been introduced by the Monetary Authority of Singapore (“MAS”) together with financial institutions, to help SMEs with temporary cash flow difficulties. SMEs can now opt to defer principal payments on their secured term loans until the end of 2020. Banks and finance companies may also apply for low-cost funding through a new MAS Singapore Dollar facility for new loans granted under the Enterprise Financing Scheme’s SME Working Capital Loan and the Temporary Bridging Loan Programme. To do so, applicants must commit to pass on the savings to their borrowers.
Enhanced Rental Cost Support Measures
Under the Solidarity Budget, the rental waiver for industrial, office and agricultural tenants of Singapore’s government agencies will be enhanced to one month. This is an increase from the 0.5 month’s rental waiver previously announced under the Resilience Budget. In the meantime, stallholders in hawker centres managed by the National Environment Agency (“NEA”) or NEA-appointed operators will continue to receive three months of rental waivers, while commercial tenants will continue to receive two months of rental waivers.
Aside from the Solidarity Budget, the COVID-19 (Temporary Measures) Act 2020 (the “Act”) will also play a part in providing rental cost support to tenants of non-residential properties. The Act, which was passed by Parliament and assented to by the President on 7 April 2020, will allow businesses and individuals affected by the COVID-19 pandemic to defer contractual obligations, such as paying rent and repaying loans, for a specified period. Importantly, the Act also seeks to ensure that property owners pass on the Property Tax Rebate in full to tenants, by imposing an obligation on property owners to do so in a timely manner and without imposing conditions. Under the Act, property owners who fail to fully pass on the Property Tax Rebate unconditionally to their tenants, without good reason, will be guilty of an offence.
The Property Tax Rebate was earlier announced in the Budget 2020, with the aim of helping businesses deal with the impact of COVID-19 by providing a property tax rebate of up to 100% for non-residential properties. For most properties, this rebate is expected to equate to slightly more than one month of rent. This rental cost support measure contained in the Act is in response to feedback received by the Singapore Government that a number of property owners were not passing on this rebate to their tenants.
Enhanced Work-Life Grant
The Work-Life Grant (“WLG”) is an existing grant under the Ministry of Manpower. It aims to incentivize businesses to implement and sustain flexible work arrangements (“FWAs”) for their employees by providing businesses with funding support. The funding support provided is expected to be used to provide employees with greater autonomy over their working schedule and improve job satisfaction, such as buying laptops, software and related equipment for telecommuting.
One component of the WLG is the FWA Incentive, which provides a grant of SGD2,000 for every local employee per year for two consecutive years, capped at SGD70,000 per business. In light of the COVID-19 situation and the Ministry of Manpower’s intent to encourage businesses to continue arrangements such as work-from-home and staggered hours beyond periods where it is compulsory to do so, an enhanced WLG criteria will be available for businesses to apply for expedited support. Thus, businesses will be eligible to receive the FWA Incentive if the employee adopts work-from-home arrangements daily for at least one month, instead of the previous requirement of six months. In cases where work-from-home cannot be practised, staggered hours arrangements will be counted. This enhanced criteria will only be valid during periods where it is not compulsory for businesses to adopt work-from-home and staggered hours arrangements (i.e. after the “circuit breaker” period ends). Businesses can start applying under the new eligibility criteria from 20 April 2020.
On the other hand, the Job Sharing Incentive under the WLG provides a grant of SGD3,500 per local PMET- level employee per year for two consecutive years, capped at SGD35,000 per business. To be eligible, the business must have put in place a formal job sharing arrangement, in which two or more employees share the same job, but work at different times. Further, the Job Sharing Incentive only applies to full-time PMET employees, who receive a gross monthly salary of at least SGD3,600 before the job sharing arrangement. Importantly, as the enhanced criteria does not apply to the Job Sharing Incentive, only employees who have adopted the FWAs for a continuous period of six months will be covered.
All local businesses can apply for the WLG if they are legally registered or incorporated in Singapore, including societies and non-profit organisations. However, businesses which have previously obtained the WLG are not eligible for the enhanced WLG under the reduced criteria introduced as a result of the COVID-19 situation. Businesses must also adopt the Tripartite Standard on FWAs at the point of claim, and commit to accede to their employees’ requests for FWAs when it is reasonably practicable to do so. The FWA Incentive is applicable to Singaporean and Permanent Resident workers, who are employed on a permanent basis or on an employment contract term of at least 12 months. It does not cover casual or temporary employees nor ACRA-listed personnel, including the business’s owners, shareholders, directors and managers.
Help for Employees
Enhanced Self-Employed Person Income Relief Scheme
First announced in the Resilience Budget, the Self-Employed Person Income Relief Scheme (“SIRS”) seeks to provide direct cash assistance to eligible self-employed persons (“SEPs”). SIRS was further extended to more classes of SEPs under the Solidarity Budget. SIRS is now applicable to all Singaporean SEPs aged 21 (as at 31 December 2020) and above who (a) currently receive Workfare payouts annually; or (b) meet the eligibility criteria.
Singapore Citizen SEPS aged 21 (as at 31 December 2020) and above will qualify for SIRS if they meet the following criteria:
- Started work as an SEP on or before 25 March 2020;
- Has a Net Trade Income of SGD100,000 or less;
- Has an employment income of not more than SGD2,300 per month;
- Lives in a property with an annual value of SGD21,000 or less (covers all public housing and some private properties);
- Does not own two or more properties; and
- For married Singaporean SEPs, the following additional criteria apply:
- The individual and spouse together do not own two or more properties; and
- The Assessable Income of his/her spouse does not exceed SGD70,000.
Singaporean SEPs aged 37 (as at 31 December 2020) and above who declared positive SEP income to IRAS or the CPF Board for Work Year 2018 need not make an application for SIRS as they will be automatically notified of their eligibility via letter and SMS, and will receive the first SIRS payout automatically in May 2020. For SEPs aged 21 (as at 31 December 2020) and above who meet the above eligibility criteria, they may make an application for SIRS. SEPs who narrowly miss the eligibility criteria may also submit appeals. These applications and appeals will be administered by the National Trades Union Congress (“NTUC”), and the Ministry of Manpower will work closely with NTUC to start processing appeals for SIRS starting from 20 April 2020. More details on the application and appeal process will be announced by NTUC at a later date.
COVID-19 Support Grant
Low- and middle-income individuals who lost their jobs due to COVID-19 may apply for the COVID-19 Support Grant. This is a cash grant of SGD800 per month for three months, which will be available from 1 May 2020. It will apply to all Singaporean citizens and Permanent Residents aged 16 years and above, who:
- Were previously employed as full-time/part-time permanent or contract staff;
- Had a monthly household income of not more than SGD10,000, or per capita household income of not more than SGD3,100 per month prior to unemployment;
- Live in a property with an annual value of under SGD21,000; and
- Are not currently receiving ComCare assistance.
Temporary Relief Fund
The Temporary Relief Fund is also available to individuals whose livelihoods were affected by COVID-19 and require urgent help. The fund consists of a one-off cash payment of SGD500. The application window is from 1 to 30 April 2020. It applies to all Singaporean citizens and Permanent Residents aged 16 years and above, who:
- Lost their jobs or faced a personal income loss of at least 30% due to COVID-19;
- Have or had a household income of SGD10,000 and below, or per capita household income of SGD3,100 and below, before their employment or income was affected; and
- Are not currently receiving ComCare assistance.
In February 2020, the Singapore Government announced payouts of between SGD100 and SGD300 for every adult Singaporean. This was subsequently tripled to between SGD300 and SGD900 in March, with payouts due to be distributed from August to September. The Solidarity Payment is the latest support measure announced to help households cope with the impact of COVID-19, under which all Singaporeans aged 21 and above will receive a one-off payout of SGD600 in April 2020. Accordingly, all adult Singaporeans will receive SGD600 in April 2020, and those who qualify for the higher tiers will receive a further SGD300 or SGD600 in June 2020.
Please do not hesitate to get in touch with Partner Suresh Divyanathan, by email ([email protected]) or telephone (+65 6239 5886).