News

Almost 300 Employees Reported Their Companies for Abusing Job Support Scheme; 2,200 Companies Under Review

2020-10-03 , 10:15 am

Some familiar brands we know have already folded due to the global pandemic. We bid farewell to Esprit, Antoinette, and the list goes on.

In order to cushion the impact for businesses, the Job Support Scheme (JSS) was introduced by the government to help companies remain vital during these tough times.

However, some employers have abused this scheme to receive payouts.

According to the press release issued on 2 Oct 2020 by the Inland Revenue Authority of Singapore (Iras), close to 2,200 employers are under review for their eligibility of July’s JSS payouts.

Iras has denied either partial or full payouts to 444 employers.

In addition, four cases have been referred to the police for investigations.

For these four cases, the employers have submitted false documents to Iras to substantiate their eligibility for the JSS.

Close to $10 million worth of payouts denied

Payments have been withheld by Iras until the companies are able to submit supporting documents, so as to verify the authenticity and accuracy of the mandatory CPF contributions made.

This is part of Iras’ anti-gaming efforts to ensure that the JSS payouts are fairly and correctly disbursed.

Should there be issues found during the review, Iras will either adjust the companies’ payouts or deny them of it.

For egregious (very serious) cases, they will be referred to the police.

As of end September, Iras received documents from and concluded the review of over 1,400 employers.

Close to $10 million of the payments have been denied by Iras to 444 employers.

So what did the companies do to be denied of the payouts?

Examples of unacceptable practices

Some of the unacceptable practices include the employer continuing the mandatory CPF contribution for the employee without change, even though the employee’s monthly wage has been cut.

In another instance, the employer increases the employee’s mandatory CPF contribution, though the employee’s monthly wage remains the same.

When employers make CPF contributions which don’t reflect the actual wages paid, they will then receive more JSS payout than they are entitled to.

The full list of unacceptable practises listed out by Iras can be found here.

Close to 50 employers voluntary declared errors

About 50 employers have voluntarily declared the incorrect mandatory CPF contributions that they have made for their employees.

As such, their JSS payouts have been adjusted before disbursement.

Iras encourages employers to review the mandatory CPF contributions for their employees ahead of the October 2020 payouts, to ensure that they have contributed the appropriate amount based on actual wages paid to bona fide employees.

300 whistleblower reports on the abuse of the JSS

According to Iras, they have received 300 over reports from whistleblowers on employers suspected to have abused the JSS.

Each report will be assessed thoroughly by Iras.

For companies which abuse the scheme, they face the following penalties:

Denied of JSS payouts
Employers may be liable for the offence of cheating under Section 420 of the Penal Code, which carries an imprisonment term of up to 10 years and also a fine

About the Job Support Scheme

The JSS was launched during Budget 2020 with the aim of helping businesses retain their employees during the global pandemic.

It provides employers with between 25% and 75% wage support for the first $4,600 gross monthly wage paid to each local employee. The cash grant is computed based on CPF contribution data.

Employers will receive five main JSS payouts in Apr 2020, Jul 2020, Oct 2020, Mar 2021 and Jun 2021. An additional special payout will be made in May 2020.

The level and duration of support each employer receives depend on the sector in which the employer operates.

On 17 Aug 2020, it was announced that the JSS will be extended by seven months to cover wages up to Mar 2021.