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The Straits Times (Singapore)
More subsidies for firms that hire older Singaporeans
Special Employment Credit to cover more workers, scheme extended to 2016
A WAGE subsidy scheme to encourage employers to hire older Singaporeans will be expanded to include more workers and extended for another three years to 2016.
Called the Special Employment Credit (SEC), it was introduced in last year's Budget to give periodic cash payouts to bosses to offset their wage bills.
But the payouts, up to 2013, were confined to hiring Singaporean workers aged 55 and older who qualify for Workfare; namely, those earning $1,700 or less a month.
Now, the income cap has been raised to $4,000 a month and the age limit lowered to 51, which means the SEC will cover 80 per cent, or nearly 350,000, of Singaporean workers older than 50.
The change was announced yesterday by Finance Minister Tharman Shanmugaratnam, who said it was a 'significant incentive to help (companies) attract and retain older workers'.
The payout is 8 per cent of the eligible workers' wages every month for those earning up to $3,000.
A lower payout of up to 8 per cent will be given for Singaporean workers earning between $3,001 and $4,000.
These payments amount to the Government effectively giving companies a refund for the higher Central Provident Fund (CPF) contributions they will be making for older workers.
For workers aged between 51 and 55, the refund can be up to nearly 60 per cent of the employer's CPF contribution, and for those between 56 and 60, up to almost 80 per cent.
For hiring Singaporeans older than 60, bosses could get a payout that exceeds the increase in their CPF contributions to the workers.
Before the change, the Government paid up to half the employer's CPF contribution for workers aged between 55 and 59, and up to 80 per cent for those 60 or older.
On top of that, the Government gives these workers Workfare, which supplements the income of Singaporeans older than 35 and earning at most $1,700 a month.
Mr Tharman, who announced the changes in his Budget speech, said any extension of the scheme beyond 2016 would depend on labour market conditions.
Extending it to 2016, however, was to 'enable employers to plan ahead in hiring older workers', he added.
He also said the SEC payouts would 'significantly exceed' the increase in the wage bill for employers, as a result of the higher CPF contributions they have to make for older workers from Sept 1.
The higher CPF contributions will cost companies an extra $190 million, but collectively they will get about $470 million in SEC payouts, he said.
Employers welcomed the SEC changes, saying they recognised the value of hiring older workers.
Said Mr Gary Khoo, managing director of eyewear retailer Spectacle Hut: 'In our industry, sometimes older may be better because people think they are more experienced and professional.'
About 5 per cent to 10 per cent of its 200 workers are older than 50, he added.
'The 'goodies' are really quite good and I want to hire, but the problem is whether we can find people who want to work.'
Ms Susan Chong, chief executive of packaging company Greenpac, described the new payouts as 'a win-win situation'. Greenpac has about 30 warehouse staff and 'seven or eight' are Singaporeans older than 50, she said.
She hopes the higher employer CPF contribution rate would coax more older Singaporeans to work.
'We always welcome older workers, but sometimes it's difficult to get them.
'While they may not be very fast, they are very careful and very precise, which is required in this job,' she said.
Additional reporting by Magdalen Ng