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COVID-19: What You Need to Know About the Senior Worker Support Package 2021: Up to S$375,000 Grants for Companies
It was ceased early this year (2021) due to over-subscription for this scheme but applications have now been resumed again following Budget 2021 announcement. Thus we encourage SMEs that have senior worker headcount to apply soonest.
Singapore is currently facing an increasingly ageing population, with almost half of Singapore’s population expected to be made up of elderly by 2050. The participation rate of senior workers aged 65 and above in the Singapore workforce has also been increasing year on year, with 28.7% in 2019 compared to 17.6% in 2010. Many senior Singaporean workers are also facing the need to work longer, or re-enter the workforce after retirement in order to support themselves.
As part of an effort to promote employment and retention for senior Singaporean workers, a S$1.3 billion Senior Worker Support Package was announced in this year’s Budget 2020. The package is expected to benefit around 110,000 companies and 570,000 workers over three years until 2022.
Senior Employment Credit (SEC)
The Senior Employment Credit scheme helps employers with the transition to higher Retirement Age and Re-employment age through wage offsets. The SEC scheme also aims to increase the employability of and to encourage retention of senior Singaporean workers.
Employers that hire senior Singaporean workers aged 55 and above will receive wage subsidies in tiers according to the workers’ ages. Senior workers earning up to S$4,000 will be applicable for the wage offset, with the maximum wage offset targeted at senior workers earning S$3,000.
In total, companies will receive S$660 million from the SEC scheme over two years, for 2021 and 2022.
To find out how much your company is eligible for SEC, you can check using the SEC Calculator.
Central Provident Fund (CPF) transition offset scheme
Due to the increase of CPF contribution rates in 2022, a one-year offset of 0.25 to 0.5% of wages will be provided for every Singaporean and Permanent Resident worker who are aged above 55 to 70. This will help companies to alleviate the rise in business costs from CPF contributions.
The offset will be calculated based on employees’ incomes paid up to the CPF salary ceiling of S$6,000 per month in 2022.
S$80 million has been set aside for the CPF transition offset scheme for 2021.
More details will be provided at a later stage.
Currently, the CPF Contribution rates – including those from employers and employees – is 37 per cent for workers up to 55 years old. It drops progressively as the age band increases – 26 per cent for workers aged 55 to 60, 16.5 per cent for those aged 60 to 65, and 12.5 per cent for those beyond 65
Aside from the abovementioned, a total of S$100 million has also been set aside for another two grants over three years. They are the Senior Worker Early Adopter Grant, and the Part Time Re-employment Grant:
Do you know that by implementing a higher internal retirement age and re-employment age ahead of time, and employers committing to provide part-time re-employment opportunities to senior workers, a company can claim up to S$375,000 worth of grants?
- Need at least 1 Singaporean/Permanent Resident (PR) employee 60 years and above
- Increase retirement and re-employment age by 3 years. (Retirement = 65 and Re-employment = 70)
- Offer Part-time Re-employment opportunities to senior workers upon their request.
1. S$5000 per Singaporean/PR employee 60 years and above (up to S$250,000) for increasing retirement and re-employment age by 3 years.
2. S$2500 per Singaporean/PR employee 60 years and above (up to S$125,000) for providing part-time re-employment opportunities to senior workers upon their request.
Senior Worker Early Adopter Grant
The new Senior Worker Early Adopter Grant provides support of up to S$250,000 for companies that are willing and able to raise both their retirement age and re-employment age ahead of the national schedule.
The current statutory retirement age is 62 while re-employment age is 67. The first scheduled increase will take effect from 1st July 2022, when the respective ages will rise to 63 and 68, and gradually increase to 65 and 70 respectively by 2030.
Companies that raise the ages by 3 or more years above the prevailing statutory ages will receive S$5,000 per senior worker aged 60 and older from the Senior Worker Early Adopter Grant, capped at 50 workers. For companies that raise the ages by 2 years above the prevailing statutory ages will receive S$2,500 per worker, while those that raise it by a year will receive S$1,000.
Companies will be required to change their human resource policies and employment contracts, as well as communicate the changes to their employees.
Part Time Re-employment Grant
In addition, a new Part Time Re-employment Grant has also been introduced to provide up to S$125,000 to companies that commit to providing part time re-employment opportunities to senior workers who have requested for it.
Many employers do not have work structures and processes to support such part-time options for senior workers currently. However, through consultations and surveys done by the Tripartite Workgroup on Older Workers, it was observed that many senior workers would like to reduce their work intensity gradually as they approach retirement. They are also prepared to remain in the workforce if they can undertake part-time work arrangements during the re-employment phase.
As such, the Part-time Re-employment Grant has been introduced from 1st July 2020 onwards to support employers in restructuring their work structures and processes to accommodate more part-time work arrangements for senior workers. Not sure how and where to apply? Consult our Grant Specialist here