29 September 2020
On 17 August 2020, Singapore Deputy Prime Minister and Minister for Finance Heng Swee Keat delivered a ministerial statement outlining how the Singapore Government will continue and evolve the support for workers and businesses amid the Covid-19 situation. Among other measures, the Jobs Growth Incentive (“JGI”) was launched.
The JGI supports the Government’s efforts to create new jobs with a special focus on mature workers. This S$1 billion programme will support firms to increase their headcount of local workers over six months from September 2020 to February 2021. The Government will co-pay up to 25% of the first S$5,000 of gross monthly wages of all new local hires for one year. For those aged 40 and above, the co-payment to firms will be up to 50%.
On 4 September 2020, the Ministry of Manpower (“MOM”) announced that eligible firms will not need to apply and can look forward to receiving the JGI payouts automatically from March 2021 onwards. This will be automatically computed each month based on their Central Provident Fund (CPF) contributions.
To be eligible for the JGI, firms must have achieved an increase in their local workforce in the period from September 2020 till the end of February 2021, compared to the size of their local workforce in August 2020. The increase in local workforce must be accompanied by an increase in jobs that pay at least S$1,400 in gross monthly wages. Firms must have been established on or before 16 August 2020. In total, eligible firms 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. To receive the full amount of support, firms must continue to meet the eligibility criteria for the 12-month period. The JGI payments will be over and above the Job Support Scheme (JSS) payments that the firm will receive for all its local employees.
To encourage firms to retain their existing employees as far as possible, the JGI payout will be reduced if any person under a firm’s employment as at August 2020 leaves the firm after August 2020. This reduction will be computed based on the ratio of existing employees who have left the employer to the total number of existing employees as at August 2020, or 5%, whichever is higher.
Firms can visit the Inland Revenue Authority of Singapore (“IRAS”) website www.go.gov.sg/jgi for more information and frequently asked questions.