Budget 2015: What the Schemes Would Mean For Employers

Budget 2015 introduces new ways for individuals and companies as a whole to expand their capabilities. We break down the schemes covered in Budget 2015 that both employees and employers can and should tap on.

In the recently released Budget 2015, we witnessed the continuation of the Government’s heavy investment on developing workers and supporting businesses to position this nation-state as a ‘smart nation’.

What do the new and continuing initiatives mean for companies in Singapore? We break down the schemes covered in Budget 2015.

SkillsFuture Scheme and Enhanced Training Subsidies
The introduction of the new SkillsFuture Scheme highlights the Government’s focus on life-long learning. Initiatives under this scheme will give more Singapore workers the impetus to attend courses either out of their sheer interest or practical necessity. Companies will thereafter see the injection of new ideas and innovation in the workplace brought about by an increase in knowledge.

Under the SkillsFuture Scheme, every Singaporean aged 25 and above will get the opportunity to receive S$500 of SkillsFuture Credit from 2016. This credit can be used to pay for a short course immediately or be accumulated to pay for more substantial developmental training in future. In addition, the Government will waive off a minimum of 90 per cent of the training cost for Singaporeans aged 40 and above who wish to attend courses supported by MOE and WDA. 

The Government will also work with industry partners to develop a pool of experts armed with specialised skills. These experts will act as SkillsFuture Mentors on whom SMEs can tap to overcome the constraints they face in developing their capabilities. This initiative under the SkillsFuture scheme thus bolsters not only the Government’s emphasis on lifelong learning, but also on knowledge sharing.

What Employers Should Do: Leverage on this new scheme to encourage employees to apply for courses that will help enhance their contribution to the company. Employers can search for relevant courses on JobsCentral Learning to identify a course that would suit their employees.  

Special Employment Credit (SEC) Scheme
Hiring workers from the silver generation is one solution to Singapore’s aging population and tight labour market issue. The enhancement to the SEC scheme aims to help companies cope with the rise in costs associated with the increase in CPF rates.

Since 2012, employers who hire Singaporean employees aged 50 and above who earn up to S$4,000 a month receive an SEC of up to 8 per cent of the employee’s monthly wages, which was then further raised to 8.5 per cent.

At Budget 2015, it was announced that this SEC will once again be raised for one year to encourage employers to voluntarily re-employ Singaporeans aged 65 and above. In sum, employers who hire such Singaporean workers between 1 January 2015 and 31 December 2015 will receive an SEC of up to 11.5 per cent of an employee’s monthly wages.

What Employers Should Do: Promote the practice of hiring older employees and benefit from their wisdom and work experience. Furthermore, a fusion of perspectives from every generation in the workplace will create a platform where the exchange of knowledge is bred and cultivated.

Temporary Employment Credit (TEC) Scheme
The TEC is a Budget 2014 initiative introduced to alleviate the rise in business costs associated with the increase in Medisave contribution rates for employers. Employers benefit from the TEC by receiving a one-year offset of 0.5 per cent of wages for Singaporean and Singapore Permanent Resident employees earning up to S$5,000 per month.

It was announced at Budget 2015 that the Government will raise this offset to 1 per cent of employees’ wages. The period to benefit from the scheme has also been extended to 2017.

What Employers Should Do: Translate this greater offset to money that can be pumped into other business initiatives or saved, circumstances which would not have been possible without the Government’s support.

Wage Credit Scheme (WCS)
The Government is also extending the period for companies to benefit from the WCS, which was initially set to expire in 2015. Under this scheme, the Government will co-fund 20 per cent of the wage increases that are given to Singaporean employees earning a gross monthly wage of up to S$4,000. Now that it has been extended to 2017, Singapore employers are afforded more time to adjust to the tight local labour market as they continue to restructure.

This greater support will allow companies the ability to direct resources to initiatives that help to boost productivity. Companies must embrace the idea of doing more with less, given the negligible change in the tight labour market.

What Employers Should Do: Give well-deserved employees a wage increase that will boost motivation levels and thus their productivity. Happy employees are productive employees – and committed ones. Their stronger commitment to the company is a surefire way to retain your talent.  

Capability Development Grant (CDG)
The CDG aims to support companies as they strive to raise service standards, adopt new technologies to increase productivity and even expand overseas. These capability-upgrading initiatives will help companies grow their businesses locally and globally.   

The CDG defrays up to 70 per cent of companies’ project costs pertaining to areas such as consultancy, training, certification and equipment, and is applicable for business projects below S$30,000. It was announced at Budget 2015 that the CDG’s funding support of up to 70 per cent of qualifying costs will be extended for three more years to 31 March 2018.

Furthermore, SPRING’s Collaborative Industry Projects will be extended to all industry sectors to promote industry collaborations as well as the development of integrative and innovative solutions. The Partnerships for Capability Transformation (PACT) scheme will also be enhanced to foster collaboration between large companies and SMEs in their supply chain. 

What Employers Should Do: Leverage on the CDG to adopt new technologies that will improve productivity and expand capabilities. One such technology is CareerBuilder Singapore’s CareerBuilder1, which prides itself on optimising companies’ recruitment processes.

Productivity and Innovation Credit (PIC) Scheme
The PIC Scheme gives companies the incentive to enhance their productivity. For instance, the PIC Bonus under this scheme was initiated to give businesses a dollar-to-dollar matching cash bonus to help defray rising operating costs associated with wages and rentals, and to encourage undertakings which promote greater productivity and innovation.

This year is the last year for companies to benefit from the PIC Bonus before it phases out after 2015. However, businesses will continue to benefit from the PIC scheme which has been extended to 2018 and the PIC+ scheme introduced in Budget 2014.

What Employers Should Do: Before the PIC grants expire completely in 2018, take the opportunity to leverage on this scheme to initiate new technologies this year. Greater productivity is something all companies are working towards and CareerBuilder Singapore’s CareerBuilder1 facilitates your company’s journey towards that achievement.

With the availability of these schemes and with credits to be inherited, companies will be better able to maximise their resources and expand the capacity of their people. These schemes play a part in developing companies and Singapore workers, and propelling Singapore further towards the goal of being a ‘smart nation’.