Singapore to increase wage increase subsidies for lower-wage workers

Out-Law News | 13 Jul 2022 | 1:39 am | 1 min. read

Singapore's Ministry of Finance (MOF) will increase the share of wage increases for local lower-wage workers it co-funds under the Progressive Wage Credit Scheme (PWCS).

This is part of the country's newly announced S$1.5 billion support package for local lower-income workers and businesses.

Singapore’s government introduced the PWCS in its 2022 Budget to provide transitional wage support for employers to adjust to mandatory wage increases for eligible lower-wage workers and to encourage voluntary wage increases. The programme allows Singapore’s government to support wage increases at specified co-funding levels between 2022 and 2026.

According to a press release by the MOF, the government’s co-funded share of eligible wage increases for resident employees earning up to S$2,500 per month will increase from 50% to 75% in 2022. For wages above S$2,500 and up to S$3,000 per month, the co-funded share will increase from 30% to 45%.

Singapore’s government will also extend the existing Jobs Growth Incentive (JGI) for another six months until March 2023.

Additionally, Singapore’s government will implement new measures to help businesses cope with higher energy costs. This includes a new energy efficiency grant, which will provide local small-and-medium-sized enterprises (SMEs) in the food services, food manufacturing and retail sectors with up to 70% support to purchase energy-efficient equipment in pre-approved categories. The grant will be capped at S$30,000 per company.

From now until the end of September, businesses will also have access to the Temporary Bridging Loan Programme to meet their working capital needs. When the programme expires, the Enterprise Financing Scheme Trade Loan will be enhanced and the maximum loan amount will be increased from S$5 million to S$10 million from 1 July 2022 to 31 March 2023.

Mayumi Soh of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons said: “These new measures are much welcome in the wake of the Covid-19 pandemic. It is hoped that this will go far in addressing the financial constraints that businesses are facing, such as increases in energy and labour costs, and to facilitate much-needed business and labour transformation.”