Jobs Growth Incentive – Do You Know How It Works
Citadel Search conducted an informal survey and found that quite a handful of people did not know about the Jobs Growth Incentive. Here are four reasons why you should leverage the Jobs Growth Incentive now before it is too late.
1) This initiative provides wage support for 25% of the first $5,000 of gross monthly wages for each new local hire for 12 months for non-mature workers (below 40 years old).
2) The incentive is doubled to 50% for
(i) mature local hires aged 40 and above,
(ii) Persons with Disabilities (PwDs) who are supported by SG Enable*, and
(iii) all new ex-offenders hired (regardless of age)
for 18 months. Additionally, the wage cap is further increased to 50% of the first $6,000 of gross monthly wages beginning from March 2021.
3) Jobs Growth Incentive can be used in conjunction with Jobs Support Scheme. This means your organisation gets support from both schemes.
4) This incentive ends in September 2021, which is only a couple more months to go!
Read on to find out how Jobs Growth Incentive works and how you can leverage it.
What is the Jobs Growth Incentive (JGI)?
The Jobs Growth Incentive is a $1 billion Government initiative to incentivise the hiring of local workers (Singaporeans and Permanent Residents) from September 2020 to September 2021 (inclusive).
There are two phases to this initiative:
– Phase 1 of the JGI: September 2020 to February 2021
– Phase 2 of the JGI: March 2021 to September 2021
This is an employment stimulus initiative by the Singapore Government to incentivise the hiring of local employees through the provision of wage support during the COVID-19 recovery period.
How does the Jobs Growth Incentive work?
This initiative supports hiring across all industries through wage support for every new local employee hired (subjected to eligibility) during the period from September 2020 to September 2021 (inclusive). The Government will provide wage support for up to 12 or 18 months for each employee starting from the date of hire.
For each new local employee, the Government will support 25% of the first $5,000 of gross monthly wages for 12 months. The incentive is doubled to 50% for each new (i) mature local hires aged 40 and above, (ii) Persons with Disabilities (PwDs) hires who are supported by SG Enable*, and (iii) ex-offenders hires (regardless of age) for 18 months.
Simultaneously, the Government encourages the retention of existing local employees. As such, the Jobs Growth Incentive payout will be subjected to a downward adjustment if any existing local employees (in employment with the employer as of August 2020 (Phase 1) or February 2021 (Phase 2)) leaves the employer after August 2020 (Phase 1) or February 2021 (Phase 2). This adjustment will vary according to the number of existing local employees who leave the employer.
*Disabilities covered by SG Enable are autism spectrum disorder, intellectual disability, physical impairment, hearing impairment and visual impairment.
Source: https://www.iras.gov.sg/irashome/Schemes/Businesses/Jobs-Growth-Incentive–JGI-/
Who is eligible for the Jobs Growth Incentive?
The Eligibility Criteria for the Jobs Growth Incentive is governed by the following 2 conditions which your firm is required to meet: (i) an increase in overall local workforce size AND (ii) an increase in local workforce size earning ≥$1,400/month compared to the August 2020 (Phase 1) / February 2021 (Phase 2) local workforce. Additionally, the firm must be a registered company as of 16 August 2020 for Phase 1 and 15 February 2021 for Phase 2.
Not sure if your organization is eligible for this incentive? Click here to check out using the Jobs Growth Incentive Calculator by IRAS.
Source: https://www.iras.gov.sg/irashome/Schemes/Businesses/Jobs-Growth-Incentive–JGI-/#
FAQ #1: When is the Job Growth Incentive payout reimbursed?
Note: Gross wages will be derived based on mandatory employee CPF contributions paid on or before the 14th of the following month. Employers must make timely CPF contributions to qualify for the JGI payouts.
Source: https://www.iras.gov.sg/irashome/Schemes/Businesses/Jobs-Growth-Incentive–JGI-/#
FAQ #2: How are Job Growth Incentive Payouts calculated?
This example illustrates how the wage support for new local employees is calculated by in JGI payouts from September 2020 to February 2021. To calculated JGI payouts from March 2021 onwards, employers of new mature/PwD/ex-offender hires can receive 50% of the first $6K of their gross monthly wage instead of just $5K per month.
FAQ #3: How does the Job Growth Incentive Adjustment Work?
The JGI adjustment factor can be determined by the ratio of existing local employees who have left the employer to the total number of existing local employees as of August 2020, or 5%, whichever is higher.
This example is a continuation of the example from FAQ #2 to illustrate how the wage support for new local employees is affected by Employer A letting go 2 existing local employees.
FAQ #4: What happens if my NEW local employee leaves my organization? Will this affect my Job Growth Incentive adjustment factor?
If a new local hire hired during September 2020 – February 2021 for Phase 1 or hired during March 2021 – September 2021 for Phase 2 leaves the employer, there is no effect on the JGI adjustment factor for the respective phase. However, the wage support provided for the corresponding hire will cease starting from the month of dismissal/resignation.
FAQ #4: What happens if my NEW local employee leaves my organization? Will this affect my JGI adjustment factor?
FAQ #5: What happens if my existing local employee (as of August 2020 / February 2021) resigns on his/her own accord or decease? Will this affect my Job Growth Incentive adjustment factor?
If a local existing employee had passed away, voluntarily resigned, retired or opted for no-pay-leave, the employer can submit the relevant information (e.g. resignation letter, retirement letter, proof of no-pay-leave,) using the JGI appeal form to IRAS for consideration.
Source: https://www.iras.gov.sg/irashome/Schemes/Businesses/Jobs-Growth-Incentive–JGI-/#
FAQ #6: What happens if I do not meet the eligibility criteria for a particular month?
In the case where the employer does not meet the criteria for one of the months, there will be no wage support provided for that month. If the employer meets the criteria in the following months, wage support from the Government will resume for the following months (subjected to eligibility). Note: The example illustrates the JGI payouts for up to February 2021 for new mature/PwD/ex-offender hires.
Note: To receive the full wage support for a new local hire, the employer must meet the eligibility criteria for the next 12 months following the date of hire.
FAQ #7: Can I receive wage support payout if I only meet the eligibility criteria after February 2021?
No, the employer will not be eligible for any payout.
FAQ #8: What happens if I do not always meet the criteria from September 2020 – September 2021? Am I able to receive wage support for the months after September 2021?
Below illustrates the eligibility of an employer to receive JGI payouts under Phase 1.The same criteria apply to JGI Phase 2, where the employers must meet the eligibility criteria for at least 1 month between March 2021 and September 2021 (inclusive).If the eligibility criteria are maintained for both Phases 1 and 2, the employer will continue to receive wage support for the next 12 months or 18 months from the date of each new hire.
FAQ #9: Am I eligible for JGI if I am already on the Jobs Support Scheme (JSS)?
Yes! You can be on both JGI and JSS simultaneously and receive payouts from both initiatives. As the payouts are tabulated separately, you may calculate your total wage support payouts from both initiatives by adding the payouts together. You may calculate your JSS payouts here.
Not sure what is JSS? Click here to find out more!
To summarize:
1) The employer must meet the eligibility criteria to receive the incentive for the month.
2) For each new employee, the Government will support 25% of the first $5,000 of gross monthly wages. The incentive is doubled to 50% for each new (i) mature local hires aged 40 and above, (ii) Persons with Disabilities (PwDs) hires who are supported by SG Enable, and (iii) ex-offenders hires (regardless of age) for 18 months.
3) Only new local hires hired between September 2020 and September 2021 (inclusive)will receive wage support for 12 months (non-mature) / 18 months (mature/PwDs/ex-offenders), beginning from the date of hire.
4) For each existing local employee who leaves the employer, the JGI adjustment factor for wage support will change, resulting in a lower wage support payout.
5) Wage support payout is based on the employer’s monthly CPF contributions for the employees and will be disbursed every quarter.
For more information, click here for the IRAS website.
If you are hiring, now is the window of opportunity (now till September 2021) as you will get to enjoy the wage support given by the Government.
Citadel Search is here to support you in your hiring needs during this period and beyond, feel free to contact us today!