Dear Clients and Friends
Yesterday, Singapore announced its “Solidarity Budget” to address the Covid-19 crisis. This was the second supplementary budget in less than two weeks, a sign of the issues already facing the economy and the government’s willingness to step in.
The main change was to the Jobs Support Scheme (JSS), in our view already the biggest single benefit for companies, where the government is subsidising wages paid to local workers (Singaporeans & PRs, non-business owners) in October 2019 – July 2020.
This and other measures are summarised below. As always, don’t hesitate to contact any of us at Stepping Stone to talk about these or anything else.
JSS enhancements: higher rebate in April, quicker payments
Wage support for the month of April 2020 raised to 75% for all sectors
- again, on the first $4,600 of gross monthly wages paid to local workers
- still 25% support in other months (other than targeted sectors – 50% for food services, 75% for aviation & tourism businesses)
Payment of the first tranche has been moved forward from end-May to next week if on Giro, or cheques about a week later. This covers October-December 2019 wages, plus the additional support in April.
To allow such fast payment, April’s 75% wage support payment will be initially calculated on October 2019 wages, then adjusted based on wages actually paid in April 2020.
This is clearly designed to incentivise employers to retain and pay staff in April – and in some circumstances may even mean a clawback from the first payment is taken from subsequent JSS tranches, if wages are cut or redundancies made between October and April. However there’s no “penalty” for employers, rebates will simply reflect actual wages paid.
As before no application is needed, and IRAS will pay directly into employers’ bank accounts if you’re set up with them on Giro – otherwise cheques will be sent.
For workers on Work Permits / S-Passes, the government will
- waive April Foreign Worker Levy
- rebate $750 of FWL paid for each worker in 2020 to be paid “as early as 21 April 2020”
Government-backed loans: their “risk sharing” now 90% (from 80%) which should make banks keener to provide, though no changes to limits or loan terms.
A further bill will be introduced today by the Minister for Law which will:
- allow businesses to defer certain contractual obligations (including on rent, loan payments and completing work) for “a period”. This adds to the MAS’s announcement last week that SMEs can defer principal payments on secured term loans until the end of 2020
- ensure that landlords pass on the Property Tax Rebate in full to tenants
We will update on these when they are announced, and you can read the full Solidarity Budget statement here.
Do get in touch if you want to talk through anything. We’re continuing to focus on things like daily bank reconciliations to ensure all our clients’ accounts are completely up to date, and are ready to review those or discuss other issues on request.
We hope you, your families and colleagues all stay safe and well.
From all the team at Stepping Stone