Singapore’s Jobs Credit Scheme to be extended for 6 months on stepped-down rate

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Singapore’s Jobs Credit Scheme to be extended for 6 months on stepped-down rate; 1st payment in January 2010 based on 6% of workers’ salary, 2nd payment in April on 3% of salary
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SINGAPORE: The Singapore government has announced that it will extend the year-long Jobs Credit Scheme, which was supposed to end in December, by another six months. This will be carried out by having two more payments on a stepped-down rate.

Speaking at the National Trades Union Congress (NTUC) Ordinary Delegates’ Conference on Tuesday, Prime Minister Lee Hsien Loong said the two extra payments will cost the government S$675 million.

Currently, Jobs Credit payments are made at a rate of 12 per cent of workers’ salary, subject to a S$2,500 cap.

Under the extension, the first payment will be based on employees on payroll in January 2010 at 6 per cent of the salary, while the second payment will be made in April 2010 at 3 per cent of workers’ salary.

Mr Lee said the government has funded the first year of Jobs Credit from past reserves as Singapore was facing the bleakest outlook since independence.

However, as the Republic’s economic situation has since improved, the government will fund the two new Jobs Credit payments out of the normal budget.

Mr Lee noted that the S$4.5 billion Jobs Credit Scheme has done its work and has held retrenchment and unemployment numbers down. Strictly speaking, it is no longer needed as the economy is recovering and some companies are hiring again.

Nonetheless, if the government were to withdraw the scheme suddenly and completely, companies may have difficulties adjusting.

The prime minister added that the government has considered views from employers and unions carefully before coming to its decision to extend the scheme for another six months.

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1. Jobs credit to be paid in June
2. Wage subsidy ‘working well’

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