Deadline nears for Singapore’s Wage Credit Scheme payments
Author: PM Editorial | Date: 06 Jan 2016
Organisations must make full CPF contributions by 14 January
Organisations in Singapore which wish to receive a third payout from the government’s Wage Credit Scheme have until 14 January to make their Central Provident Fund (CPF) contributions for Singaporean employees.
The S$3.6 billion package began in 2013, with the aim of subsidising salary increases by 40 per cent and giving organisations more time to adjust to rising wages in a tight labour market. The scheme was originally scheduled to run for two years but has been extended until 2017, although at a rate of 20 per cent from 2016. Employers will receive the 2016 tranche of the payment by 31 March.
Employees earning less than S$4,000 a month (gross) are eligible for the subsidised pay rises and to qualify, employers must have given their Singaporean staff a wage increase of at least S$50 in 2015 and/or sustained the wage increases (at least S$50) previously given to employees in 2013 and 2014.
More than 85,000 employees qualified for the scheme in the 2015 financial year and so far more than S$2.2 billion has been handed out to employers. Organisations do not need to apply for the credit; it is paid out based on their CPF contributions.
The 2015 Hays salary guide found that 94 per cent of employees in Singapore received a pay rise last year, with 43 per cent receiving an increase of between three and six per cent.
Towers Watson published a Wage Credit Scheme report in 2013 that suggested employers could best use the payments they receive by boosting productivity-related initiatives. The report recommended “investing in training and development, technology and process optimisation to raise the skill-sets of the targeted employees and equip them with the necessary knowledge and skills to advance their careers.”
Last year’s Towers Watson Asia Pacific Salary Budget Planning Report found that salaries are expected to rise 4.4 per cent in 2016, comfortably above inflation of 1.5 per cent.