Singapore Announces Huge Wage Credit Scheme While Deporting Expatriates
Under Singapore’s Wage Credit Scheme (WCS), Singaporean employers will receive more than S$450 million in payouts by the end of June. Through the payout scheme, Singaporean government will co-fund 20 percent of qualifying wage increases given in 2019, 2018 and 2017 to more than 800,000 Singaporean employees, who earn a gross monthly salary of up to S$5,000.
In a joint press conference on Thursday, the Ministry of Finance (MOF) and the Inland Revenue Authority of Singapore (IRAS) cleared that no application is required from the employers to receive the payouts. The ministry stated that eligible employers will receive letters from IRAS by Jun 30.
As Singapore shifts to become a Smart Nation, IRAS has adopted digital payment modes for all Wage Credit Scheme payouts and will not issue any cheques. Eligible employers will directly receive the amount in their registered bank accounts through GIRO or PayNow Corporate.
Deputy Prime Minister and Finance Minister Heng Swee Keat, while announcing the 2020 budget, said the Wage Credit Scheme would be enhanced to support wage increases for Singaporean workers.
“The gross monthly wage ceiling was also raised from S$4,000 to S$5,000 for both years, which enabled more to qualify for the wage credit. Employers eligible for the Budget 2020 enhancements will receive the supplementary payout for the enhancement in June 2020,” the joint statement said.
Amid the ongoing COVID-19 pandemic, Singaporean economy could shrink by up to 7 percent, which would be the lowest since the time Singapore gained independence. Analysts and economists have predicted that 200,000 people might file for unemployment by the end of the year – the forecasted figure is much bigger than the 40,000 people who went jobless during the 2008-09 global financial crisis.
The current crisis is expected to be worse for resident expatriates, who otherwise are paid huge sum of salaries. A city which ranks at top in terms of being expensive and lavish for expatriates, might soon become a cause of stress for many professionals. As Singapore government will try to save jobs for locals, more than 60 percent expatriates will have to return to their native country, according to Maybank Kim Eng economist Lee Ju Ye.
Considering the current situation, the government introduced Job Support Scheme (JSS) to co-funds the current wages, providing wage support to employers and helping enterprises retain their local employees amid the pandemic. However, the Wage Credit Scheme was only a three-year initiative, launched in 2013. It was extended to 2020 to support enterprises and co-fund wage increases.
While S$450 million under the Wage Credit Scheme payouts sounds extremely pleasant amid the ongoing economic crisis, the whole scenario is quite troublesome for expat workers.
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