Ensuring Jobs Support Scheme Payments Are Used Directly for Wage Support

Parliamentary Question by Mr Zhulkarnain Abdul Rahim:

To ask the Minister for Finance whether the Ministry tracks data on the number of companies which have obtained Government grants such as that under the Jobs Support Scheme but have paid their workers less based on the amount of CPF contributions disclosed while the executive directors received bigger bonuses or remuneration in the same year.

Parliamentary Question by Mr Gerald Giam Yean Song:

To ask the Minister for Finance (a) how does the Ministry ascertain that Jobs Support Scheme (JSS) payments are used for wage support; (b) what are the Ministry’s plans for clawback if JSS payments are found to have been used for other purposes, including senior executive bonuses or stock buybacks; and (c) whether the Ministry will consider publishing the list of organisations which returned all or part of their JSS payouts so that they can be given due public recognition.

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Parliamentary Reply by Minister for Finance, Mr Lawrence Wong:

The Government introduced the Jobs Support Scheme (JSS) in 2020 to provide rapid, broad-based wage support to help employers retain their local employees during the height of the COVID-19 crisis. 

JSS payouts are computed based on actual mandatory employer CPF contributions made to bona fide employees. The CPF Act requires employers to make CPF contributions on wages payable to their employees, subject to the prevailing wage ceilings. Employers will not receive JSS payout if they fail to make CPF contributions for their employees for the respective reference month. Similarly, if employers cut wages for their employees during the respective reference month, their JSS payout will be correspondingly reduced. In other words, the JSS is designed as a reimbursement to help employers offset part of the wages already paid to their employees.  Announcing the timing and schedule of JSS payouts allowed employers to take these payouts into account and retain local workers despite the challenging economic circumstances during the pandemic.

We also capped the Government’s co-funding under the JSS to first $4,600 of gross monthly wages paid to each local employee. This means that employees and senior executives whose gross monthly wages are higher than $4,600 will have a lower effective JSS support. 

Given how JSS payouts are computed, the Ministry of Finance does not track the data that Mr Zhulkarnain asked about. To prevent abuse of JSS, IRAS, as the administrator of JSS, has instituted a robust anti-gaming framework since the first JSS payout in April 2020. For cases with high risk of fraud, such as irregular CPF contributions to get higher JSS payouts, IRAS requires the firms to authenticate their CPF contributions before the payouts are released. As of August 2021, 1,889 cases have been denied or had their JSS payout adjusted. Cases with strong corroborative evidence to support JSS abuse are reported to the Commercial Affairs Department (CAD) for further investigation and prosecution. As of August 2021, 10 cases are undergoing police investigations.

Besides IRAS’ anti-gaming checks for JSS, the CPF Board also audits employers to check the accuracy of CPF contributions paid and wages declared. The CPF Board is also piloting the CPF Contribution Alert which allows employees to receive personalised notifications when their monthly CPF contributions are credited. Employees can conveniently verify the wages declared by their employers and CPF contributions paid by their employers against their payslip. Employees and whistleblowers can lodge reports to the CPF Board for any non-compliance of CPF contributions.

The JSS and other COVID-19 economic relief grants were meant to support businesses in this period of significant economic uncertainty. While the Government does not intervene in how business owners and board directors determine remuneration and bonuses for key executives, they are expected to practise good corporate governance and stewardship.  In particular, a good practice is to exclude government grants in the computation of a company’s financial performance for the purposes of determining remuneration and bonuses for key executives. This is because government grants are not a result of the performance efforts of these key executives. We understand that the Singapore Institute of Directors will also be putting out some guidelines on best practices in remuneration governance soon.

For companies that are managing well, we encourage them to return the JSS to us, or donate the JSS received to a charity of their choice. It is commendable that companies which were able to cope well with the crisis, have declined to receive JSS or donated the JSS received. Some have asked to remain anonymous for internal organisational reasons. Meanwhile, there are also companies that have chosen to use the JSS in other responsible ways, such as providing additional training to upskill their employees or expanding their operations, hiring more Singaporeans as a result. 

We will need to study carefully the implications of publishing the list of organisations that have returned part or all of their JSS, balancing public recognition, requests for anonymity, and the risks of placing undue pressure on other firms that have been using the JSS monies responsibly in other ways.