8 Points You Need To Know About Wage Credit Scheme (WCS)
A client asked me yesterday on the kind of subsidy schemes available to him as a business owner on hiring of staff, I shared with him WCS, which will be auto-credit into your company’s bank account if your company qualifies, but you should be aware of this when deciding on the wage increment you are giving to your staff these 2 months during your annual wage review, if you have not already done so.
8 points you need to know about WCS…
1. Under the Scheme, the Government ( IRAS ) will co-fund 40% of wage increases given to Singapore Citizen employees earning a gross monthly wage of $4,000 and below in 2013 – 2015. Only Employers ( or Business Owners ) are eligible for the co-funding.
2. To give firms more time to adjust to rising wages in the tight labour market, the Government will extend the WCS for two more years, i.e. 2016 and 2017, with reduced level of co-funding.
3. Over the period of 2016 to 2017, the Government will co-fund 20% (instead of 40%) of wage increases given to Singaporean employees earning a gross monthly wage of $4,000 and below. In addition, for wage increases given in 2015 which are sustained in 2016 and 2017 by the same employer, employers will continue to receive co-funding at 20% for 2016 and 2017.
4. All other qualifying conditions will be unchanged.
5. Who qualifies for WCS
All employers paying wage increases in 2013 – 2017 to Singaporean Singapore Citizen employees who:
* Are earning a gross monthly wage of $4,000 and below;
* Received CPF contributions from a single employer for at least 3 calendar months in the preceding year ;
* Have been on the employer’s payroll for at least 3 calendar months in the qualifying year ( i.e. employer must have paid employee CPF contributions for at least three calendar months in qualifying year); and
* Have at least $50 gross monthly wage increase.
* Must not also be the business owner of the same entity (i.e. sole proprietor of the sole proprietorship, or a partner of the partnership, or both a shareholder and director of a company)
6. Local government agencies, international organizations and businesses that are not registered in Singapore do not qualifyfor WCS.
7. Additional Eligibility Conditions
7.1 An employer is not eligible for a payout under any of the circumstances below:
* The employer is an entity that has no substantial trade or business;
* The employer had given, in IRAS’ opinion, false or misleading information to IRAS in order to obtain a payout or a higher amount of payout;
* The employer (either singly or with another person) had used, in IRAS’ opinion, one or more artificial, contrived or fraudulent steps in order to obtain a payout or a higher amount of payout;
* The employer was convicted in the qualifying or preceding year for making CPF contributions to Singaporeans who were not actively employed by the firm
7.2 An employer is not eligible for a payout for a wage increase for a particular employee who:
* Did not carry out any substantive work for the employer;
* Effectively controls the employer (i.e. controls decision making power and management of the business or company)
7.3 If the total wages paid by an employer for a period is not commensurate with the volume or nature of activity carried out by the employer in that period, then the employer is only eligible for an amount of payout that, in IRAS’ opinion, corresponds to the increase in the total wages paid for that period that commensurate with such volume or nature of activity.
7.4 If the total wages paid by an employer to a particular employee for a period is not commensurate with the volume or nature of work carried out by the employee in that period for the employer, then the employer is only eligible, in respect of that employee, for an amount of payout that, in IRAS’ opinion, corresponds to the increase in the total wages paid to that employee for that period that is commensurate with such volume or nature of work.
7.5 If an employer fails to give to IRAS, by the time specified by the IRAS, any information requested by IRAS for the purpose of determining the employer’s eligibility for a payout or the amount of payout the employer is eligible for, with respect to one or more employees, then the employer will not be given the payout for these employees.
8. How much of wage increases qualify for co-funding?
Under the extended Scheme, i.e. 2016-2017, the Government will co-fund 20% (instead of 40%) of qualifying wage increases up to a gross monthly wage level of $4,000.
In addition, gross monthly wage increases of at least $50 – given in 2015 that is sustained in 2016 /2017 by the same employer, and given in 2016 that is sustained in 2017 by the same employer; will continue to be co-funded at 20%.
Also, gross monthly wage increases must be at least $50 to qualify.
Good Luck !
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