C.2. To sustain jobs for Singaporeans, we will introduce a Jobs Credit which will encourage our businesses to preserve jobs as much as is possible in the downturn.
Everybody has a part to play
C.3. Everybody has to make adjustments in this downturn. Workers are already facing cutbacks in bonuses, reduced overtime and in some instances, involuntary no-pay leave. The National Wages Council has recommended that companies may implement a wage freeze or wage cut to remain competitive and save jobs. Workers will therefore be making significant adjustments in this crisis to allow businesses to survive and to keep their jobs.
C.4. But wages are only part of the total cost of doing business. We expect businesses to find every way to cut unnecessary costs in their operations, improve efficiency so as to reduce overheads without having to retrench workers. As NTUC Secretary-General Lim Swee Say has urged, businesses should cut costs to save jobs, not cut jobs to save costs.
C.5. The Government will however, provide a significant incentive for companies to retain existing workers, and where their business warrants, to employ new ones. The Jobs Credit will provide every employer with a cash grant to reduce their costs of employing Singaporean workers during the crisis.
Jobs Credit will have broadest impact
C.6. The Jobs Credit that an employer receives will comprise 12% of the first $2,500 of the wages of each employee who is on the CPF payroll. It will be given in four quarterly payments, with each payment being based on the workers who are with the employer at the time. This will therefore provide incentive for employers to retain their local workers. For example, for a worker whose wage is $2,500, an employer will get $900 a quarter, or $300 a month.
To sustain jobs for Singaporeans, the Government will introduce a Jobs Credit which will encourage all businesses to preserve jobs in the downturn. This is a temporary one-year scheme for 2009. Details of the scheme are as follows:
• Employers will receive a 12% cash grant on the first $2,500 of each month’s wages for each employee on their CPF payroll.
• The Jobs Credit is for one year, and employers will receive the Jobs Credit in four
payments: March, June, September and December 2009.
• For each payment, employers will receive Jobs Credits on the employees that are
on their CPF payrolls at the start of the quarter in which the payment is made. The
wages paid to these employees in the previous quarter will be the qualifying wages used to calculate the 12% cash credit that employers will receive.
o For example, for the first payment to be received at the end of March 2009, businesses will receive Jobs Credit on the employees that are on their payrolls in January 2009. The wages paid to these employees in October to December 2008 will be the qualifying wages used to calculate the 12% cash credit that employers will receive.
• Employers will not need to apply for the Jobs Credit. They can expect to receive
the first payment by 31 March 2009 from the Inland Revenue Authority of Singapore (IRAS).
• All active employers, with the exception of local and foreign government organisations, are eligible for the Jobs Credit.
• Company A has three employees with monthly wages $1,000, $2,500 and $5,000
• Assuming that there are no changes in Company A’s payroll information, Company A will also be eligible for the same quantum of Jobs Credit for subsequent payments to be paid out in June, September, and December 2009. In total, Company A will receive $8,640 of Jobs Credit in 2009 (four payments of $2,160 each).
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Thursday, January 22, 2009
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