29 May 2020

On 26 May 2020, Singapore Deputy Prime Minister Heng Swee Keat presented the Fortitude Budget in Parliament and introduced a S$33 billion supplementary budget for the next phase of the fight against Covid-19. The measures announced, including further enhancement to the Jobs Support Scheme and rental relief for tenants, will provide support for businesses and workers to adapt, transform and seize new opportunities.

The Fortitude Budget is this year’s fourth Budget. It builds on the Unity, Resilience and Solidarity Budgets announced earlier this year.

The following is a summary of some measures under the Fortitude Budget.

1.  Jobs Support Scheme

The Jobs Support Scheme (“JSS”) will be enhanced in three ways:

  • JSS will be extended by one more month to cover wages in August 2020. This brings the total wage support under the JSS to 10 months.
  • For firms that are not allowed to resume operations immediately after the circuit breaker, the Government will continue to provide wage support at 75% on the first S$4,600 of gross monthly wages per local employee until August 2020, or when they are allowed to re-open, whichever is earlier.
  • Support for qualifying firms in some affected sectors (e.g. the aerospace, retail and marine sectors) satisfying the eligibility criteria will be increased from the previous 25% to either 50% or 75% of the first S$4,600 of gross monthly wages per local employee, once these firms are allowed to resume operations.

2.  SG United Jobs and Skills Package

A S$2.7 billion SGUnited Jobs & Skills Package will create close to 100,000 opportunities in jobs, traineeships and skills training:

  • SGUnited Jobs: This initiative aims to create 40,000 jobs by end-2020, with 15,000 jobs offered by the public sector and 11,000 jobs offered by the private sector. The remaining 14,000 places will come from career conversion programmes that will be expanded.
  • SGUnited Traineeships: The SGUnited Traineeships programme will provide 21,000 traineeships for local first-time job seekers to gain valuable relevant experience in high-demand areas. Applications open from 1 June 2020. A new SGUnited Mid-Career Traineeships scheme will be created to provide 4,000 traineeships for mid-career job seekers aged 40 to 60 to gain new skills and start new careers.
  • SGUnited Skills: Training courses will be available for about 30,000 local jobseekers to upgrade their skills while looking for a job. A monthly training allowance of S$1,200 will be available for a course duration of between six to 12 months to cover basic expenses. This will be rolled out progressively from July 2020.
  • Enhanced incentive to hire local workers: There will be an enhanced hiring incentive for employers which hire local workers who have completed eligible traineeship and training programmes. This will be enhanced to cover local workers of all ages. For eligible workers under the age of 40 who have gone through the eligible reskilling or training programmes, the incentive will be 20% of the monthly salary for six months, capped at S$6,000 per worker in total. For eligible workers aged 40 and above who have gone through the eligible reskilling or training programmes, the incentive will be 40% of the monthly salary for six months, capped at S$12,000 per worker in total.

3.  Rental relief for tenants

In light of the difficult situation in the past few months, the Government will provide more support to small and medium-sized enterprises (“SMEs”) on rental costs post-circuit breaker:

  • Mandated rental waiver by landlords: The Ministry of Law will be introducing a new Bill mandating that landlords grant rental waivers to qualifying SME tenants. If the new Bill is passed, SME tenants of qualifying commercial properties who have suffered a significant revenue drop will benefit from a total of four months of rental relief shared equally between the Government and landlords. SME tenants of industrial and office properties will also be given some relief. More details will be provided in June 2020. The new Bill will also cover provisions on temporary relief from onerous contractual terms such as excessive late payment interest or charges. It will also allow tenants to repay their arrears through instalments.
  • Rental relief for SME tenants in private non-residential properties: For SME tenants with qualifying leases or licences commencing before 25 March 2020, the Government will provide a new cash grant to offset their rental costs. The cash grant will be automatically disbursed to qualifying property owners from end-July 2020. Landlords will be required to pass on the benefit to their SME tenants.
  • Rental waivers for tenants in public properties: There will also be additional rental waivers for commercial and other non-residential tenants of Government properties, including tenants of commercial buildings and industrial, office and agricultural tenants.

4.  Financing support for promising startups

To sustain startup innovation and entrepreneurship activities, S$285 million will be set aside to catalyse and crowd in another S$285 million in matching private investments.

5.  Support for digital transformation

  • Digital resilience bonus: There will be a payout of up to S$5,000 to help food services and retail businesses to digitalise with PayNow Corporate, e-invoicing, or business process or e-commerce solutions. There will be an additional payout of S$5,000 for food services and retail businesses that use advanced solutions.
  • Encouraging e-payments: There will be a bonus of S$300 per month over five months to encourage the adoption of e-payments by stallholders of hawker centres, wet markets, coffee shops and industrial canteens.
  • National Innovation Challenges: To catalyse partnerships across the economy, the Government will introduce a set of National Innovation Challenges which will focus on partnerships to develop industry-led solutions to the challenges that businesses face, starting with how to reopen Singapore safely to achieve safe workplaces, safe homes, safe schools, and safe commuting. The National Innovation Challenges will be launched over a series of Innovation Calls, starting from Q3 2020. Successful solutions may receive Government co-funding for initial deployment.

6.  Foreign worker levy waiver and rebate

The foreign worker levy waiver and rebate will be extended by up to two months for businesses that are not allowed to resume on-site operations: (i) 100% waiver and S$750 rebate in June 2020; and (ii) 50% waiver and S$375 rebate in July 2020. Levy rates will be restored from August 2020 onwards, or when workers are able to work again, whichever is earlier.

7.  Higher CPF contribution rates for senior workers deferred

The planned increase in CPF contribution rates for senior workers will be deferred by one year from 1 January 2021 to 1 January 2022.

8.  Covid-19 support grant

An additional S$800 million will be set aside for the Covid-19 Support Grant to continue supporting Singaporeans and Permanent Residents who have lost their jobs, are placed on no pay leave, or are facing significantly reduced salaries due to Covid-19. Eligible recipients will receive up to S$800 per month for three months.

9.  Support for charities and social services agencies

The Singapore Totalisator Board’s Enhanced Fund-Raising Programme will provide dollar-for-dollar matching on eligible donations raised between 1 April 2020 to 31 March 2021, capped at S$250,000 per charity.

The Government will provide an S$18 million top-up to the Invictus Fund to help social service agencies maintain services, retain staff and adopt technology. The Invictus Fund was set up by the National Council of Social Service to channel donations to social service agencies which deliver critical social services during the Covid-19 situation.

Reference materials

The Fortitude Budget is available from the Budget 2020 website www.singaporebudget.gov.sg.

Further information

Allen & Gledhill has a Covid-19 Resource Centre on our website www.allenandgledhill.com that contains knowhow and materials on legal and regulatory aspects of the Covid-19 crisis.

In addition, we have a cross-disciplinary Covid-19 Legal Task Force consisting of Partners across various practice areas to provide rapid assistance. Should you have any queries, please do not hesitate to get in touch with us at covid19taskforce@allenandgledhill.com.


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