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Everything You Need To Know About The Jobs Growth Incentive Scheme Simplified For You

2020-09-05 , 4:24 pm

Back on 17 Aug 2020, DPM Heng Swee Keat probably cemented himself as one of the favorite-est ministers in Singapore history when he announced the extension of the Jobs Support Scheme (JSS) and a new scheme to encourage the hiring of local talents, the Jobs Growth Incentive (JGI).

The JSS is pretty clear cut.

Depending on which industry you’re in, the government will co-pay a certain percentage of local employees’ salary. The more pitiful your sector is, the higher the percentage of co-payment.

The JSS, originally supposed to stop in Aug 2020, was extended to Mar 2021, although at a lower level of payout. Instead of up to 75% support, the JSS extension will only provide up to 50% support.

The other one is the Jobs Growth Incentive, where the government helps to co-pay some of your new Singaporean hires’ salaries for a year.

When DPM Heng announced this new scheme, he mentioned that the Ministry of Manpower (MOM) will reveal the details at a later date.

Well, the later date he’s referring to is now, based on the announcement made by MOM on 4 Sep 2020.

How to apply ah? How much can I get ah? Got cap like the JSS or not? Here are all your questions answered, and more.

Jobs Growth Incentive

The idea of the jobs growth incentive is very simple.

One, it subtly pressures companies in Singapore to hire Singaporeans, especially when combined with the recent increase in the minimum salary for foreign work passes.

And two, it allows companies which are doing well to expand operations faster and hire more people.

No Need To Apply

According to the MOM, $1 billion has been set aside for JGI.

The good news is, firms who are eligible for the scheme will be automatically included.

The bad news is, if you’re not a company with deep pockets, you might have trouble hiring since the payout won’t be until next year.

Based on your CPF contributions, the government will start disbursing payouts from March 2021, six months down the road.

Who Is Eligible?

There are two parts to being eligible.

Part one: Local workforce

To be eligible, your company must have increased your local workforce between Sep 2020 and end-Feb 2021, based on your Aug 2020 local workforce.

In other words, you only have six months to grow your local workforce.

Part two: Quality of Job

Your new boss cannot get you to come into the office as a full-time employee and only pay you $500, with the rest to be paid in peanuts.

The increase in the company’s local workforce must be accompanied by an increase of at least $1,400 (gross) in the local workforce earning.

Companies must also be established on or before 16 Aug 2020.

Another Simple Example:

Say company A has 5 Singaporeans earning $2,000 each during Aug 2020.

By end-Feb 2021, company A must have 6 Singaporeans within the company.

Part one: Pass

Total spending on 5 Singaporeans during Aug 2020 was $10,000.

However, to pass “part two”, the total spending (or wages) of 6 Singaporeans in the company must hit $11,400.

In other words, your boss cannot fire two experienced workers and get two new ones in to make up the number while paying lesser.

How Much Can I Get?

The incentive is applicable to people of all wage levels.

For Singaporean aged below 40: Government co-pays 25% of the first $5,000 for 12 months from the month of hire.
For Singaporeans aged above 40: Government co-pays 50% of the first $5,000 for 12 months from the month of hire.

In total, this means:

For local hire (below 40YO): Can get up to $15,000
For local hire (above 40YO): Up to $30,000

By the way, the best part: this isn’t an A or B situation, with A being JSS and B being JGI.

Companies who get JGI support will still get JSS support as well.

Possible Penalties

Manpower Minister Josephine Teo briefly spoke about a system to prevent cheating before:

Basically, the government don’t want bosses to fire everybody and hire new Singaporeans so he can enjoy up to 60% off salaries.

Every time an employee who was already hired by Aug 2020 leaves the company, the JGI support received will be reduced by at least 5%.

The reduction will be calculated based on the total number of existing local employees to the total number of existing local employees.

Either that or 5%.

The higher alternative (penalty) will be chosen.

Enhanced Hiring Incentive

In May 2020, it was announced that employers who hire local employees can get wage support of up to 40% for six months under the Enhanced Hiring Incentive (for people above 40; people below 40 gets 20% support only).

If you’re hoping to get a new worker above 40 years old for absolutely free (50% [JGI] + 10% [JSS; assume to be the lowest tier] + 40% [EHI]), it won’t be happening.

The JGI will take over the enhanced hiring incentive but nobody’s complaining since the amount, as well as duration, of support, is more for the newer scheme.

So there you go, a simplified version of what to expect for JGI.

You can find out more details here.