This year’s Budget Statement was delivered by Deputy Prime Minister and Minister for Finance, Mr Heng Swee Keat, in Parliament on Tuesday, 18 February 2020.
You can find the full 2020 Budget Statement at www.singaporebudget.gov.sg.
Senior Worker Support Package
To help businesses adjust to the increase in Retirement Age (RA), Re-employment Age (REA) and CPF contribution rates, the Government will introduce a Senior Worker Support Package, comprising 4 measures:
Provides wage offsets to employers hiring senior Singaporean workers aged 55 and above, and earning up to $4,000 a month.
This will take effect from 1 January 2021 to 31 December 2022.
Maximum wage offsets under SEC
| Age of employee as of 1 Jan 2021 |
Maximum wage offset for employers of Singaporean employees aged 55 and above, and earning up to $4,000/month |
| 2021 |
2022 |
| 55 – 59 |
2% |
1% |
| 60 – 64 |
3% |
3% |
| 65 – 66 |
5% |
5% |
| 67 (REA) and above |
8% |
8% |
The REA will be 67 on 1 January 2021.
Provides wage offsets to employers hiring Singaporean and PR workers aged above 55 to 70.
It will offset half of the increase in employer CPF contribution rates in 2022, and is applicable to employees’ incomes paid by employers up to the CPF salary ceiling, which is currently $6,000 per month.
This will take effect from 1 January 2022 to 31 December 2022.
CPF Contribution Rates and CPF Transition Offset in 2022
| Age of employee as of 1 Jan 2022 |
>55 – 60 |
>60 – 65 |
>65 – 70 |
| Total CPF contribution |
28%
(+2 percentage points) |
18.5%
(+2 percentage points) |
14%
(+1.5 percentage points) |
| Employee CPF contribution |
14%
(+1 percentage points) |
8.5%
(+1 percentage points) |
6%
(+1 percentage points) |
| Employer CPF contribution |
14%
(+1 percentage points) |
10%
(+1 percentage points) |
8%
(+0.5 percentage points) |
CPF Transition Offset
(equivalent to half of the increase in employer CPF contribution rates) |
0.5%-point |
0.5%-point |
0.25%-point |
The percentage figures in brackets refer to the increase in CPF contribution rates from 1 January 2022, compared to current levels.
Provides funding support to companies that increase their own retirement and re-employment ages ahead of the legislated changes.
This will take effect from 1 July 2020.
Provides funding support to companies that voluntarily commit to providing part-time re-employment to all eligible seniors who request for it.
This will take effect from 1 July 2020.
Factsheet on Senior Worker Support Package
More details at MOM’s Committee of Supply highlights 2020.
SkillsFuture Mid-Career Support Package
As part of the next bound of SkillsFuture, the new SkillsFuture Mid-Career Support Package aims to create more career transition opportunities for locals in their 40s to 50s, and help them remain employable and have access to good jobs.
We aim to double the annual job placement of this group to around 5,500 by 2025.
Initiatives under this package are as follows:
- Ramp up capacity for reskilling programmes such as Professional Conversion Programmes (PCPs) and the Place-and-Train programme for rank-and-file workers under the Adapt & Grow initiative.
- Provide a hiring incentive to employers who hire and reskill jobseekers over 40 who have gone through a reskilling programme.
- Special SkillsFuture Credit top-up of $500 to every Singaporean aged 40 to 60 in 2020.
- Mobilise a group of Career Advisors from professional communities, starting with the Information & Communication Technology (ICT) and Finance sectors.
Find out more in the Budget Annex B-2.
More details will at MOM’s Committee of Supply highlights 2020.
Support for job redesign under Productivity Solutions Grant (PSG)
Another measure under the next bound of SkillsFuture is the expanded support for job design under the Productivity Solutions Grant (PSG).
Companies can access pre-approved consultants to help them redesign jobs in order to support their business transformation efforts. Through job redesign, companies can achieve productivity gains, and offer workers more enriching jobs with better wages and career progression.
More details at MTI and MOM’s Committee of Supply highlights 2020.
Enabling Employment Credit (EEC)
The EEC is a new wage offset scheme designed specially to support employment for Persons with Disabilities (PWDs), after the Special Employment Credit and Additional Special Employment Credit expires in end 2020.
- The EEC will be given to employers who hire Singaporean PWDs earning below $4,000 a month.
More details at MOM’s Committee of Supply highlights 2020.
The MRSS, which will take effect from 2021 to 2025, aims to help senior Singaporeans who have yet to meet the Basic Retirement Sum (BRS) save more for retirement.
- The Government will match every dollar of cash top-ups made to eligible members under the Retirement Sum Topping-Up (RSTU) scheme up to an annual cap of $600.
- About 435,000 Singaporeans are expected to benefit each year, including self-employed persons and caregivers.
There is no need to apply for MRSS.
Eligibility for MRSS is automatically assessed annually. Those who qualify for MRSS will be notified by CPF Board by the first quarter of every year, starting from 2021.
The MRSS matching grant for a given year will be automatically credited into the member’s Retirement Account (RA) by the first quarter of the following year.
More details will at MOM’s Committee of Supply highlights 2020.
Enhancements to Silver Support Scheme
The Government will enhance the Silver Support Scheme to strengthen support for seniors who had low incomes during their working years, and now have less in retirement.
The enhanced Silver Support Scheme will benefit close to 250,000 Singaporeans aged 65 and above, up from 150,000 currently.
From 1 January 2021:
- Quarterly payouts will be increased by 20% for all flat types.
- Qualifying criterion for total CPF contributions by age 55 will be expanded from $70,000 to $140,000. Qualifying criterion of average annual net trade income of self-employed persons when they were aged 45 to 54 will be expanded from $22,800 to $27,600.
- Qualifying criterion for household monthly income per person will be expanded from $1,100 to $1,800.
There is no need to apply for Silver Support.
All Singaporeans aged 65 and above in 2021 will be automatically assessed for eligibility. All who qualify for the enhanced Silver Support will be notified by CPF Board and receive their first payout in December 2020.
Find out more on the Silver Support enhancements at:
Changes to Depending Ratio Ceiling (DRC), or foreign worker quotas
To manage foreign workers’ growth and support good employment outcomes as industries transform, MOM will:
- Reduce the construction, marine shipyard, and process sectors’ S Pass Sub-DRCs in 2 steps, from 20% to 18% from 1 January 2021, and then to 15% from 1 January 2023.
To ease the transition, these changes are announced nearly a year in advance, and will be implemented in 2 steps, with the second step taking place nearly 3 years later.
Companies should consider locals more seriously when hiring, and tap on existing programmes such as the Professional Conversion Programme (PCP) to build a strong local core.
Those prepared to undertake transformation projects to grow sustainably within the new DRCs can tap on the Lean Enterprise Development (LED) Scheme.
No changes to foreign worker levy rates
There will be no changes to foreign worker levy rates across pass types, sectors and tiers.
The earlier-announced foreign worker levy increases for the marine shipyard and process sectors will be deferred for another year.
Find out more in the Budget Annex B-2.