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The Government of Singapore Sets Aside S$1 Billion to Assist Firms in Hiring Locals

Under the Jobs Growth Incentive (JGI) plan, the government has set up $1 billion to assist firms in hiring locals. Eligible businesses will not need to apply and will begin receiving JGI payments immediately in March 2021. This will be calculated automatically each month using their CPF contributions.

From September 2020 to September 2021, the JGI provides considerable wage support to enable these companies to push forward their recruiting plans and increase their local workforce. This, along with the expansion of the Jobs Support Scheme, is a huge boost for local job development.

What exactly is the Jobs Growth Incentive?

The Jobs Growth Incentive (JGI) encourages businesses to hire more locally from September 2020 to September 2021, resulting in solid, long-term jobs for residents.

Each non-mature local hire will get up to 12 months of salary assistance from the JGI, while mature hires, people with disabilities, and ex-offenders will receive up to 18 months of salary support from the JGI.

Employers who hire more people in their local area between September 2020 and September 2021 (inclusive) will be rewarded by the government. For new local recruits, the qualification period will be as follows:

  • Phase 1 of the JGI: September 2020 to February 2021
  • Phase 2 of the JGI: March 2021 to September 2021

Who is eligible for the JGI?

To be eligible for the JGI, there must be an increase in total local workforce size AND an increase in local workforce size earning by at least $1,400/month, as compared to the local workforce in August 2020 for Phase 1 and February 2021 for Phase 2.

To receive the JGI for the whole 12 months or 18 months from the month of hiring for each new local hire, the employer must have qualified for JGI during each phase’s eligibility period and continue to fulfil the eligibility conditions throughout the payout period.

Click here to view the full eligibility criteria determined by IRAS.

How do you apply for the JGI?

Employers are not required to submit an application for the JGI. The amount of the JGI compensation payable to qualified employers will be notified by IRAS through mail. They can also view an electronic copy of their letter by logging onto myTax Portal.

The JGI payout is calculated on a monthly basis based on the obligatory CPF contributions made by the qualifying employer.

In order to encourage businesses to keep as many of their existing local employees as feasible, the JGI payout will be reduced in the following situations:

  • if any existing local employees (in the employer’s employ as at August 2020) leave the employer after August 2020. This applies to local hires employed in Phase 1.
  • if any existing local employees (in the employer’s employ as at February 2021) leave the employer after February 2021. This applies to local hires employed in Phase 2.
  • The adjustment factor will be higher if more existing local employees leave the employer.

The adjustment factor is determined using the ratio of current local employees who have left the employer to the total number of existing local employees as of August 2020 or February 2021, whichever is larger, or 5% of the total number of existing local employees. If more existing local employees depart the company, the adjustment factor will be larger.

If new local workers (employed from March 2021 onwards) leave the company, it has no effect on the adjustment factor for new recruits in Phase 2. Any JGI associated with such local hires, on the other hand, shall be terminated.

Feel free to reach out to us at Crystal Clear and our specialists will be able to assist you in understanding and managing your JGI eligibility and application.