BUDGET 2016: SPECIAL EMPLOYMENT CREDIT REDUCED?

I refer to the article “Budget 2016: More support for SMEs to address near-term concerns” (Channel NewsAsia, Mar 24).

Special Employment Credit reduced?

It states that “The subsidy has also been reduced for workers below 65. Employers who hire workers aged 55 to 59 will now get 3 per cent of these employees’ monthly wages, while those who hire workers between 60 and 64 will get 5 per cent. Those who hire workers 65 and above will get 8 per cent – unchanged from the current subsidy – which will be bumped up to 11 per cent until the re-employment age is raised.

Current Special Employment Credit wage offset

Age of Worker Until Dec 31, 2016
50 and above Up to 8% of monthly wage
65 and above Up to 8% of monthly wage
(+ additional 3% until re-employment age is raised)

New Special Employment Credit wage offset

Age of Worker 2017 to 2019
55 to 59 Up to 3% of monthly wage
60 to 64 Up to 5% of monthly wage
65 and above Up to 8% of monthly wage
(+ additional 3% until re-employment age is raised)

Need to be 5 years older to qualify?

In the light of the economic slowdown, higher redundancies, almost flat locals’ jobs growth – why are we making it harder to qualify (increased from age 50 to 55), and reducing the benefits by as much as 5% (from 8 to 3%)?

Budget surplus $3.4 billion?

And end up with a projected Budget surplus of $3.4 billion for the current financial year!

Spend more to help S’poreans instead of $3.4b surplus?

Shouldn’t we be spending more to help Singaporeans, particularly older lower-income workers?

Workers not benefiting by way of higher wages?

Also, many employers may not be passing on the special employment credit to older workers by way of higher wages.

Just look at the occupations which apparently are predominantly staffed by older workers – security guards and cleaners.

Their median basic wage (age 50 -59) has remained at a very low $850 and $1,000 – despite so many years of special employment credit.

Perhaps we could consider paying the money directly to them instead of to employers.

Leong Sze Hian
ASS Contributor