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COVID-19: 3 Key Things You Need To Know About Jobs Support Scheme JSS Payouts on 29th July and October 2020
The Jobs Support Scheme (JSS) was announced in Budget 2020 to help employers retain their local employees. Many businesses and jobs have been threatened by the Covid-19 pandemic since the first case was detected in late January 2020, and further worsened when Singapore implemented the Circuit Breaker measures in April and May 2020. JSS was introduced to support wage costs for local employees by relieving companies’ cash flow.
With the July 2020 JSS payout, more than S$15 billion would have been paid to employers as wage support during this Covid-19 pandemic.
The third JSS payout will be scheduled on 29th July 2020 for companies that have existing GIRO arrangements with IRAS or have registered for PayNow Corporate, otherwise companies will receive their payouts via cheques mailed to their registered business address from 4th August 2020 onwards.
Knowing how much JSS payouts your company is eligible for helps in your business planning and cash flow management. If you are still unsure of how the calculation for JSS payouts works, here are 3 key things you need to know when doing your own calculations for the next two JSS payouts:
- Find out your company’s eligibility on which tier of co-funding
First and foremost, if you are still confused which tier of co-funding your company is eligible for, you can enquire via JSS Additional Tier eligibility, or call 1800-352-4728 (8am to 5pm from Monday to Friday).
This will determine the calculation of JSS payout your company will receive, as a percentage (25%, 50% or 75%) of your local employees’ salaries. However, please take note of the cap on the first S$4,600 monthly gross wages per local employee.
If your business is not allowed to resume operations after Circuit Breaker measures are lifted, you will continue to receive 75% wage support. This will continue until your business is able to resume operations, or until August 2020, whichever is earlier, as long as your company is not listed in the List of Permitted Services.
- How are JSS payouts for July and October 2020 calculated?
After finding out which tier of wage support your company is eligible for, you need to understand the basis of calculation for JSS. This will explain why you have received less (or more) than what you had expected.
JSS payout for July 2020 is calculated based on employees’ CPF contributions for the months of February, March and April 2020. This means that, if you have reduced wages or put your employees on no-pay-leave during February to April 2020, the JSS payouts will also be reduced accordingly.
As announced in the Fortitude Budget, instead of providing wage support for 9 months, JSS will be enhanced to cover ten months of salaries from October 2019 to August 2020. JSS payout for October 2020 will be based on CPF contributions for the months of May, June, July and August 2020. Hence any changes to employment for these months will affect your subsequent JSS payout in October 2020.
- Adjustments made for 75% additional JSS payout for April and May 2020
Due to Circuit Breaker measures in April and May 2020, the government has increased the wage support for all companies, regardless of sector, to 75% for the months of April and May 2020.
The 75% wage support for April 2020 was based on October 2019’s CPF contribution. This means that, if your local employee was only employed in or after November 2019, there would be no CPF contribution for the month of October 2019, hence there was no payout of the 75% wage support during the April 2020 payout. As such, adjustments will be made to include this amount in the July 2020 payout.
An illustration for a local employee who was employed since October 2019, with a gross monthly wages of S$4,000, and base tier of 25% wage support:July 2020 payout will be based on 25% of February and March wages (25% * S$4,000 * 2 months = S$2,000), plus 75% additional support in April (75% * S$4,000 = S$3,000). However, as the additional April wage support was already paid in advance in April 2020, based on October 2019’s CPF contribution, there will be an adjustment to minus off 50% of October 2019 wage (- 50% * S$4,000 = - S$2,000). Hence, the total amount your company will receive in the July 2020 JSS payout will be S$3,000 (S$2,000 + S$3,000 - S$2,000).An illustration for a local employee who was employed in January 2020, with a gross monthly wages of S$4,000, and base tier of 25% wage support:As there was no CPF contribution in the month of October 2019, the employer will not receive any additional payout in April 2020. This adjustment will be made during the July 2020 payout - payout will be based on 25% of February and March wages (25% * S$4,000 * 2 months = S$2,000), plus 75% additional support in April (75% * S$4,000 = S$3,000). The total amount your company will receive in the July 2020 JSS payout will be S$5,000.
Similarly, the special payout for May 2020 was calculated based on November 2019’s wages. Hence, if your local employee was only employed in or after December 2019, you would not have received the special payout in May 2020. The adjustment for May special payout will be included in October 2020 payout. For companies that have already received the special payout in May 2020, the JSS payout for October 2020 will be calculated based on the months of June, July and August 2020.
However, if you have reduced wages or put your employees on no-pay-leave in April/May 2020, the subsequent JSS payouts will also be reduced accordingly.
All employers will qualify for the JSS payout as long as CPF contributions for local employees are made. Nevertheless, any abuse of the scheme will result in JSS payout denied, and offenders may face up to 10 years of imprisonment and a fine.
For more information regarding JSS, you can visit IRAS website.