S$370 million in excess Job Support Scheme payouts mistakenly given to 5,400 businesses

Affected businesses will be notified via letters and emails.

Syahindah Ishak | April 08, 2021, 04:00 PM

The Jobs Support Scheme (JSS) payouts and foreign worker levy (FWL) waivers/rebates were introduced in Budget 2020 to help businesses cope with the economic crisis amid the Covid-19 pandemic.

However, the Ministry of Trade and Industry (MTI) has found errors in the business reopening dates used to determine both schemes.

Received wrong amounts

In a combined statement from MTI, Ministry of Finance (MOF) and Ministry of Manpower (MOM) on Apr. 8, it was revealed that some businesses received the wrong JSS or FWL waiver/rebate amounts.

There were more than 1.8 million applications from businesses to resume operations after circuit breaker were processed.

Affected businesses will be notified via letters and emails, said the statement.

Alternatively, from April 10, businesses may log in here using their CorpPass to check if they are affected.

Wrong reopening dates were recorded

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 their JSS amounts and FWL waiver/rebates payable.

MTI had used existing systems and manual processes to grant approvals for the businesses to reopen.

In doing so, mistakes were made with the reopening dates. It resulted in the wrong amounts of JSS payouts and FWL waiver/rebates payable.

IRAS detected the mistakes in November 2020

The Inland Revenue Authority of Singapore (IRAS) first detected the mistakes in November 2020 as part of their regular processing checks on the JSS.

Subsequently, several businesses had also informed IRAS that they might have received excess JSS payouts.

In December 2020, the cause of the overpayments was subsequently traced to discrepancies in the companies' reopening dates.

After being informed by IRAS of the discrepancies, MTI embarked on an extensive investigation together with other agencies.

MTI established that there had been errors in the compilation and processing of business reopening dates.

Incorrect reopening dates were applied for some businesses, primarily those supporting CMP projects but were not CMP companies themselves.

The error meant that these companies were deemed to have been closed for a longer period of time, and thus were allocated a higher JSS payout.

Some of these businesses may also have been granted FWL waiver and rebate even though they were operating.

S$370 million excess JSS

As a result of the incorrect tagging of businesses’ reopening dates, excess JSS payouts amounting to about S$370 million were credited to about 5,400 businesses during the disbursements made in October 2020.

This constitutes about six per cent of the JSS paid out in October 2020, and about 3.6 per cent of all firms which received JSS payouts.

Of the S$370 million, about S$340 million or over 90 per cent will be recovered through automatic offsets from subsequent JSS payouts and the commitment of the larger affected businesses contacted by MTI and other agencies to return the excess payment.

No action is required from affected businesses for now. 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.

Businesses that wish to return the outstanding excess amount upfront may do so through IRAS.

1,100 businesses to receive additional JSS

At the same time, 1,100 businesses were identified to be eligible for additional JSS payouts, amounting to S$5.5 million.

The additional JSS allocation will be credited to businesses by end-April 2021.

S$1.2 million excess FWL waivers and rebates

Excess FWL waivers and rebates, amounting to an estimated S$1.2 million, were also 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.

1,200 businesses to receive additional FWL waivers and rebates

A number of businesses have also been identified to be eligible for additional FWL waiver and rebate.

In total, about 1,200 businesses will be granted S$6 million additional FWL waiver and rebate.

The FWL waiver will be automatically adjusted from businesses' future levy bill while the rebate will be credited to businesses directly.

No action is required from affected businesses for now.

MTI and MOM will inform affected businesses of any follow-up actions required by May 2021.

Top photo from Getty Images.