With circuit breaker measures being extended to 1 June 2020 and further compulsory closures of even more workplaces, the government is putting in place even more financial support schemes for businesses and workers.
The Jobs Support Scheme (“JSS“) will now be enhanced to provide a subsidy of 75% of the first $4,600 in May 2020.
JSS subsidies Singaporean and Permanent Resident employee salaries up to the first $4,600 of gross monthly wages. From our review of our clients who have received the first tranche of JSS payouts this month, the gross monthly wage includes both Ordinary Wage and Additional Wage components up to the first $4,600.”Gross monthly wages” include (compulsory) employee CPF contributions but exclude (compulsory) employer CPF contributions.
Another significant change in policy with the introduction of the enhanced circuit breaker is the extension of JSS coverage to employees of companies who are also shareholders and directors of that company. This will:
- apply to companies that were registered on or before 20 April 2020, and
- for the wages of shareholder-directors with Assessable Income of $100,000 or less for Year of Assessment 2019.
May 2020 payouts for such directors cum shareholders will also include the April 2020 payout that had previously been excluded.
Since, however, the other requirements for JSS eligibility still need to be met, it appears that directors cum shareholders still have to be Singaporean and Permanent Residents, and have had their compensation structured in a way as if they were typical employees – i.e. subject to compulsory CPF contributions. In other words, compensation in the form of, for example, directors’ fees or dividends will not be included.
With the addition of the May 2020 payout, a table summarising how JSS works (as at 22 April 2020) is set out below:
| Payout Month (in 2020) | Aviation and tourism |
Food services | Others | |
| Computation of Payout | ||||
| April Payout | +75% of Oct 2019 wages +75% of Nov 2019 wages +75% of Dec 2019 wages |
+75% of Oct 2019 wages +50% of Nov 2019 wages +50% of Dec 2019 wages |
+75% of Oct 2019 wages +25% of Nov 2019 wages +25% of Dec 2019 wages |
|
| May Payout | + 75% of Nov 2019 wages |
+ 75% of Nov 2019 wages |
+ 75% of Nov 2019 wages |
|
| July Payout | +75% of Feb 2020 wages +75% of Mar 2020 wages +75% of Apr 2020 wages |
+ 50% of Feb 2020 wages + 50% of Mar 2020 wages + (75% of Apr 2020 wages – 25% of Oct 2019 wages) |
+25% of Feb 2020 wages +25% of Mar 2020 wages +(75% of Apr 2020 wages – 50% of Oct 2019 wages) |
|
| October Payout | + (75% of May 2020 wages – 75% of Nov 2019 wages) + 75% of Jun 2020 wages + 75% of Jul 2020 wages |
+ (75% of May 2020 wages – 75% of Nov 2019 wages) + 50% of Jun 2020 wages + 50% of Jul 2020 wages |
+ (75% of May 2020 wages – 75% of Nov 2019 wages) + 25% of Jun 2020 wages + 25% of Jul 2020 wages |
|
The JSS is structured in a way to try to disincentive Singaporean and PR salary cuts and job terminations during the circuit breaker period. This means that there may be some scenarios where the employer needs to reimburse the government in July and/or October, should the overall figure calculated using the formulas as above prove negative. Employers have to act responsibly and fairly during the circuit breaker period, and should take guidance from the tripartite advisory on salary and leave arrangements.
