It is vital that employers contribute the right amount of mandatory CPF for their employees based on the actual wages paid. As part of the checks for JGI, SEC, EEC and CTO eligibility, a small number of employers will receive letters from IRAS asking them to conduct a self-review of their CPF contributions and to provide declarations or documents to substantiate their eligibility for the payouts and/or report errors to IRAS on mandatory CPF contributions made to employees. Their September 2022 payouts will be withheld pending the self-review and verifications by IRAS. The payouts will be disbursed after the completion of the review.
Employers that have been selected for review are required to perform the following steps:
- Self-review of mandatory CPF contributions made for your employees
For September 2022 Payout
If you have been selected to conduct a self-review of your eligibility for JGI, you would need to check whether there are any errors pertaining to your employees’ mandatory CPF contributions for the months of August 2020, February 2021, September 2021, March 2022, April 2022 and May 2022.
If you have been selected to conduct a self-review of your eligibility for both JGI and SEC/EEC/CTO schemes, you would need to check whether there are any errors pertaining to your employees’ mandatory CPF contributions for the months of August 2020, February 2021, September 2021 and January to June 2022.
You may wish to refer to the illustrations provided below on examples of JGI abuses.
- Correction of Errors
If you identify any errors during the self-review, you should make the relevant CPF adjustments below:
a) For Refund
Please select ‘Refund of CPF Contributions Paid’ RFM/Form 40 at: https://www.cpf.gov.sg/eSvc/Web/Services/RefundOfCpfContributionsPaid/LandingPage
b) For Adjustment
Please select ‘Application for Adjustment of CPF Payment’ (ER_DMS_REQ01) at: https://www.cpf.gov.sg/eSvc/Web/Schemes/AdjustmentOfCpfPayment/Home
- Submission of Self-review Declaration
For September 2022 Payout
If you have been selected for self-review for: Please submit your Declaration of Review via: JGI only
as stated in the self-review letter sent to you.
Both JGI and SEC/EEC/CTO
as stated in the self-review letter sent to you.
Please note that only declarations made by either the Business Owner (for sole-proprietorships or partnerships) or ACRA-registered Director (for companies) will be accepted.
- Disclosing Errors Discovered
If there are any errors discovered, please list the details of errors made in accordance with the format below and submit it with your declaration of self-review.
Self-review for Format to list errors JGI only JGI Annex B_Declaration of Error Both JGI and SEC/EEC/CTO JGI & SEC EEC CTO Annex B_Declaration of Error
Illustrations of Unacceptable Practices
IRAS has observed the following instances of unacceptable practices where employers engage in arrangements to alter their CPF contribution data, such that the data do not correspond with employees’ wages. As the payouts are automatically computed based on CPF contribution data, these employers then stand to gain a higher amount of the cash subsidy than due to them.
Example 1: Making mandatory CPF contributions for non-genuine employees
This is a fraudulent arrangement. Employers should not make any mandatory CPF contributions to individuals who are not their genuine employees.
Individuals are reminded that providing their personal information to some employers to facilitate such schemes may make them accomplices to the fraud, resulting in criminal liability for the individuals.
Individuals should not give out their personal information such as NRIC, Singpass or bank account details in exchange for CPF contributions and/or money.
Example 2: Continuing mandatory CPF contributions for employees whose employment has been ceased or put on no-pay leave
Employers should stop making mandatory CPF contributions for employees who have been retrenched or are on no-pay leave.
However, employers can continue to make voluntary CPF contributions to the CPF accounts of employees on no-pay leave by applying for a separate CPF submission number with CPF Board.
(For more details on making voluntary CPF contributions for employees, please find out more at the CPF Board website).
Example 3: Maintaining mandatory CPF contribution amounts based on past wages for employees who have suffered wage cuts
CPF mandatory contributions are based on employees’ wages, age and citizenship. A wage cut on the employees’ part should see a corresponding decrease in the CPF contribution.
However, employers can continue to make voluntary CPF contributions to the CPF accounts of employees whose wages have been cut by applying for a separate CPF submission number with CPF Board.
(For more details on making voluntary CPF contributions for employees, please find out more at the CPF Board website)
Example 4: Increasing CPF contributions for employees without any actual wage increase
CPF mandatory contributions are based on employees’ wages, age and citizenship. The prevailing CPF contribution rates can be found on the CPF website.
Example 5: Inflating mandatory CPF contributions and deducting these excess contributions from employees’ wages in cash
This is a fraudulent arrangement. Employers should only make the correct amount of mandatory CPF contributions based on the actual wages paid to their employees.
Example 6: Making purported mandatory CPF contributions for purported wages paid without expectation of any work to be done (e.g. solely to fulfill regulatory requirements or quotas, or family members who are not involved in the business)
Employers should only make mandatory CPF contributions to employees for wages paid for work performed as part of a contract of service.
Example 7: Making purported mandatory CPF contributions for wages that are not commensurate with the volume or nature of work of the employees
Employers should only make mandatory CPF contributions to employees for wages paid that are commensurate with the volume or nature of work of the employees, instead of making purported mandatory CPF contributions based on inflated wages to increase the amount of subsidy.
Example 8: Wilfully delaying or omitting mandatory CPF contributions for existing employees in the month of August 2020 / February 2021 / September 2021 to reduce the firm’s baseline headcount as of August 2020 / February 2021 / September 2021
CPF contributions are payable for Singaporeans and Singapore PRs who are employed under a contract of service, including part-time and casual employees and employees on term employment contracts.
It is a criminal offence under the CPF Act for late and/non-payment of CPF contributions. (For more details on CPF compliance matters, please find out more at the CPF Board website)
Example 9: Excessive firing or retrenchment of existing employees and subsequent replacement with new employees
Employers are encouraged to take a long-term view of their manpower needs, including the need to maintain a strong Singaporean core.
When managing excess manpower, retrenchment should always be the last resort after all options have been considered and found to be unworkable.
Example 10: Transferring employees across business entities
Employers should not transfer employees without any genuine or commercial basis. The JGI is only for genuine new hires.
In general, employee transfers across business entities would not qualify for JGI payments. Any appeals would be granted on a case-by-case basis, and would only be given if IRAS is satisfied that the purpose or effect of any arrangement is not abusive or avoidable, e.g. due to cessation of business operations/functions, where the transferred employee would have been retrenched if not for the transfer
Example 11: Artificially splitting the wages of employees across multiple related business entities
*CPF contributions for wages exceeding the JGI wage ceiling ($5,000 for all new local hires and up to $6,000 for all new mature local hires aged 40 and above, new local PwDs hired and new ex-offenders hired from March 2021 onwards) are excluded in the computation of JGI payouts.
Employers should only make mandatory CPF contributions to employees for the business entities they are working for, instead of artificially splitting the wages of its employees across related business entities to circumvent the JGI wage ceiling.