This happened because of errors in the business re-opening dates used to determine these payouts, as agencies "had to process, at short notice, more than 1.8mn applications from businesses to resume operations after Circuit Breaker."
Around 5,400 businesses in Singapore were wrongly credited excess Jobs Support Scheme (JSS) payouts last year, during a round of disbursements in October. In total, about S$370mn was credited in excess, making up about 6% of the JSS paid out in that month, and affecting about 3.6% of all firms which received the payouts.
In a joint statement on Thursday (8 April), the Ministry of Trade and Industry (MTI), Ministry of Finance (MOF), and Ministry of Manpower (MOM) said errors had been found in the business re-opening dates used to determine these payouts, as agencies "had to process, at short notice, more than 1.8mn applications from businesses to resume operations after Circuit Breaker."
In addition to affecting JSS payouts, these errors also affected the amount of foreign worker (FW) levy waiver/rebates given out (more on this below).
All affected businesses will be notified via letters and emails. Businesses may also log into this portal using their CorpPass from 10 April onwards, to check if they are affected.
How did the errors occur?
The JSS was introduced as a means to offset the wage costs of firms that had to shut during the Circuit Breaker, and the FW levy waivers/rebates were extended to all employers. These payments were calculated based on dates when the affected businesses were permitted to open post-Circuit Breaker.
While most businesses were permitted to reopen in phases after the Circuit Breaker in June 2020, businesses in the construction, marine and process (CMP) and tourism sectors were only allowed to reopen upon approval from MTI. The approved reopening dates for the CMP and tourism sectors were then used to compute the JSS amounts and FW levy waiver/rebates payable.
Government agencies had received and reviewed more than 1.8mn applications from businesses to resume their operations, which were then consolidated by MTI. As the processes for the resumption of business activities had to be implemented at short notice MTI used existing systems and manual processes to grant approvals for businesses to reopen.
Unfortunately, in so doing, mistakes were made with the reopening dates and concomitantly the JSS payouts and FW levy waiver/rebates payable.
Following investigations by IRAS and MTI, it was found that incorrect reopening dates were applied for some businesses, primarily those supporting CMP projects but which are not CMP companies themselves. [More on the background here].
Actions to be taken following the errors made
Over 90% of excess JSS amount to be recovered
Of the S$370mn paid out wrongly, over 90% (about S$340mn) will be recovered through automatic offsets from subsequent JSS payouts (S$140mn), and the commitment of the larger affected businesses contacted by MTI and other agencies to return the excess payment (S$200mn).
The Ministries have stressed that no action is required from affected businesses for now. The Inland Revenue Authority of Singapore (IRAS) will first offset the excess amount against the businesses' future JSS payouts. If future payouts are insufficient to offset the amount of excess payment, MTI, MOF, and IRAS will inform the affected businesses of any outstanding excess amount to be returned after their final JSS payout.
Instalment payment arrangements will also be available for businesses that need them. Additionally, businesses that wish to return the outstanding excess amount upfront may do so through IRAS. Instructions on this will be included in the letters to these affected businesses.
Lastly, 1,100 businesses were identified to be eligible for additional JSS payouts, amounting to S$5.5mn in payment. This additional JSS allocation will be credited to businesses by end-April 2021.
About 1,200 businesses to be granted S$6mn additional FW levy waivers and rebates
As a result of the incorrect tagging of businesses' re-opening dates, excess FW levy waivers and rebates, amounting to an estimated S$1.2mn, were granted to 360 businesses in June and July 2020. MTI and MOM will reach out to the affected businesses to recover the excess waiver and rebate.
At the same time, a number of businesses have also been identified to be eligible for additional FW levy waiver and rebate. In total, about 1,200 businesses will be granted $6 million additional FW levy waiver and rebate. The FW levy waiver will be automatically adjusted from these businesses' future levy bills, while the rebate will be credited to the businesses directly.
Similar to the above, no action is required from affected businesses for now. The MTI and MOM will inform all those affected of any follow-up actions required, by May 2021.
Preventing future of recurrences
In the statement, the Ministries noted that the MTI has worked with MOF, MOM and IRAS to rectify the processes processes and instituted additional checks to detect and flag possible errors. An external auditor was engaged to conduct a thorough check to verify the reopening dates used in the computation of JSS payouts. These reopening dates were used in the determination of eligibility for FW levy waiver and rebate and identify affected companies.