At Unity Budget 2020, the Government announced:

(a) Senior Worker Support Package (which includes SEC and CTO) to support employers in implementing the key recommendations by the Tripartite Workgroup on Older Workers on increasing the Retirement Age, Re-employment Age, and CPF contribution rates of senior workers; and

(b) EEC, a new wage offset scheme to support the employment of persons with disabilities.

September 2021 Payout:

If your company has an existing GIRO arrangement with IRAS or is registered for PayNow Corporate as at 19 Sep 2021, you will receive a payout titled “Senior Employment Credit / Enabling Employment Credit” (GIRO) or “GOVT” (PayNow Corporate) in your bank account from 23 Sep 2021. SEC / EEC payouts will no longer be made via cheques.

Selected companies will receive a letter from IRAS to submit supporting documents for review. If you are selected for review, your Sep 2021 payouts will be withheld and you may be required to provide a declaration or documents, in order to substantiate your eligibility for SEC / EEC payout. The payout will only be disbursed after the completion of the review.

What is the SEC, CTO and EEC?

Senior Employment Credit (SEC)

Under the SEC, the Government provides wage offsets to help employers that employ Singaporean workers aged 55 and above adjust to the higher Retirement Age and Re-employment Age.

The wage offset applies to Singaporean workers aged 55 and above and earning up to $4,000 per month. More support will be given for the higher age bands. 

The SEC will take effect from 1 January 2021 to 31 December 2022. For wages paid during this period, employers will receive up to 8% of the wages paid to Singaporean workers aged 55 and above, depending on the workers’ age and wage.

SEC

CPF Transition Offset (CTO)

To alleviate the rise in business costs due to the increase in CPF contribution rates for senior workers, the Government will provide employers with a transitionary wage offset equivalent to 50% of the increase in employer CPF contribution rates in 2022, for every Singaporean and Permanent Resident worker they employ aged above 55 to 70.

The offset to employers will be based on employees’ monthly incomes1 paid up to the CPF salary ceiling of $6,000 per month.


1Gross monthly wages include employee CPF contributions, but exclude employer CPF contributions.

CTO

Enabling Employment Credit (EEC)

To support the employment of persons with disabilities, the EEC will be given to employers that hire Singaporean employees with disabilities aged 13 and above and earning below $4,000 per month.

The EEC provides a wage offset of up to 20% of the employees’ monthly income, capped at a maximum of $400 per month for each employee.

In addition, employers hiring Singaporean employees with disabilities who have not been working for at least six months will receive an additional 10% wage offset, capped at $200 per month for each employee, for the first 6 months of employment.

The EEC will be available for five years from 2021 to 2025. To ensure that the EEC remains helpful for PwDs to find and remain in employment, the Ministry of Manpower will review the EEC after two years and make adjustments if necessary.

EEC

Who qualifies for the SEC, CTO and EEC?

who qualifies

Local government agencies, International Organisations and businesses not registered in Singapore do not qualify for the schemes.

See the full employer exclusion list

  1. Local Government Agencies including Organs of State, Ministries and Departments, Statutory Boards
  2. Government and Government-Aided Schools
  3. PA Services and Grassroot Units
  4. High Commissions, Embassies, Trade Offices, Consulate
  5. Unregistered Local/Foreign Entities
  6. Foreign Military Units
  7. Representative offices of:
    1. Foreign companies
    2. Foreign Government Agencies
    3. Foreign Trade Associations/ Foreign Chambers/ Foreign Non-profit Organisations
    4. Foreign Law Practices
  8. Bank Representative Offices/Insurance Representative Officers/Other Financial Representative Offices (registered with MAS); News Bureaus (which are representative offices);
  9. International Organisations
  10. Entities which pay CPF but are not registered in Singapore

How do employers apply for the payouts?

Employers do not need to apply for the payouts. IRAS will notify eligible employers regarding the amount payable to them electronically based on their notification preferences for Income Tax/GST, as updated with IRAS. To receive timely notifications when your notices are ready for viewing, please update your notification preferences in myTax Portal at IRAS website.

When will employers receive the payouts?

For wages paid from January to June, employers will receive the payout in September the same year. For wages paid from July to December, employers will receive the payout in March the following year.

How do employers receive the payouts?

In line with Singapore’s Smart Nation efforts, all payouts will be disbursed through GIRO or PayNow Corporate. No cheques will be issued for the payouts.

Payouts will automatically be credited to employers' GIRO bank account for Income Tax/GST. For those without GIRO accounts, the payout will be credited to their bank account that is registered with PayNow Corporate. Employers who are not already on these direct crediting modes have to sign up for these modes – GIRO or PayNow Corporate4 to receive their payouts.


4Organisations can sign up for PayNow Corporate by linking their organisation’s UEN (without suffix) [e.g. ROC (2019XXXXXA), ROB (531XXXXXA), UEN (T19LLXXXXA)] to their bank account via internet banking. The nine banks participating in PayNow Corporate are United Overseas Bank, DBS Bank/POSB, OCBC Bank, Citibank, HSBC, Maybank, Standard Chartered Bank, Bank of China and Industrial and Commercial Bank of China Limited. For assistance, please approach these banks.

How is each payout computed?

Senior Employment Credit (SEC)

For wages paid from 1 January 2021 to 31 December 2022, employers will get up to 8% of the wages paid to senior Singaporean workers aged 55 and above, and earning up to $4,000 per month. The wage offset is dependent on the workers’ age and wage. More support will be given for the higher age bands and for those earning below $3,000 per month.

Monthly SEC payouts per employee for 2021:

Monthly wage of employeeAged 55-59
(>=55 yrs and <60 yrs)
Aged 60-64
(>=60yrs and <65yrs)
Aged 65-66
(>=65yrs and <67yrs)
Aged 67 and above
(>=67yrs)
Up to $3,0002% of wage3% of wage5% of wage8% of wage
>$3,000 to $4,000$240 – (0.06*wage)$360 – (0.09*wage)$600 – (0.15*wage)$960 – (0.24*wage)

Monthly SEC payouts per employee for 2022:

Monthly wage of employeeAged 55-59
(>=55 yrs and <60 yrs)
Aged 60-64
(>=60yrs and <65yrs)
Aged 65-66
(>=65yrs and <67yrs)
Aged 67 and above
(>=67yrs)
Up to $3,0001% of wage3% of wage5% of wage8% of wage
>$3,000 to $4,000$120 – (0.03*wage)$360 – (0.09*wage)$600 – (0.15*wage)$960 – (0.24*wage)

CPF Transition Credit (CTO)

The Government will provide employers with a transitory wage offset equivalent to half of the increase in employer CPF contribution rates for senior workers in 2022. The CTO is calculated based on employee's wages paid up to the current CPF salary ceiling of $6,000 per month.

Age BandsIncrease in Employer CPF Contribution from 1 January 2022CTO for Employers in 2022
≤ 55No change
> 55 to 60+ 1% point0.5% point
> 60 to 65+ 1% point0.5% point
> 65 to 70+ 0.5% point0.25% point
> 70No change

Enabling Employment Credit (EEC)

The EEC will be paid to employers of Singaporean persons with disabilities (PwDs) aged 13 and above, and earning below $4,000 per month. In addition, employers who hire persons with disabilities who have not been in employment for the past six months will receive an additional wage offset for the first six months of employment.

Monthly Wage of Employee with disability ($)PayoutAdditional payout if employee was not employed for the past six months, for up to the first 6 months of employment only
≤ $200020% of wage10% of wage
> $2,000$400$200
> $3,000 to $4,000$1,600 - 0.4*wage$800 - 0.2*wage

 Note: Employees eligible for EEC will not be eligible for the SEC (i.e. not stackable).

Employers can use the following calculators to calculate their respective payout amount(s) and check their eligibility.

SEC Calculator (XLSX, 110KB)

EEC Calculator (XLSX, 73KB)

CTO Calculator (XLSX, 110KB)

How do employers submit request for breakdown of the payouts?

You may put up a request for a detailed breakdown of the individual amount of your employees.

Can employers appeal to qualify for the schemes?

For SEC and EEC, employers have up to 2 months from the month of payout to lodge an appeal. For instance, if the payout is in the month of March, employers must complete the SEC appeal form (PDF, 382KB) or EEC appeal form (PDF, 381KB) (where applicable) and send it via email to [email protected] by 31 May. Late appeals i.e. those received after the 2-month window will not be considered.

Appeal in relation to the CTO scheme is currently not available.

How will the Government detect abuse of the schemes?

The Government takes a serious view on any attempt to abuse the scheme. Offenders may have their payouts denied and can be charged under Section 420 of the Penal Code, where they may face up to 10 years of imprisonment and a fine.

Businesses or individuals who wish to report to IRAS any malpractices or potential abuses of the schemes may do so via email to [email protected]. IRAS will ensure that the identities of informants are kept strictly confidential.

Contacting IRAS

Please submit your enquiry via FormSG. For urgent assistance, you may call 6351 3288 (8 a.m. - 5 p.m. from Mon to Fri, excluding public holidays).

FAQs

A. Claiming and computing

How is the payout computed for employees with two or more employers?

Each employer will receive the payout based on the wage that they paid to that employee.

B. Payment Mode

Can I instruct IRAS to make the payout to a third party?

No. The payout can only be paid to the employer which made CPF contributions for its employees.

Why is IRAS not issuing cheques for the schemes?

In line with Singapore’s Smart Nation efforts, all payouts will be disbursed through GIRO or PayNow Corporate. ePayment is also the fastest way for employers to receive money from the Government.

C. Declining and Returning Payout

Can I decline the payout if I do not need the support?

Yes. You can email to [email protected] and indicate whether you are declining the next payout or all future payout of the specific scheme(s).

How do I decline SEC and/or EEC payouts?

If you wish to be excluded from current and all future SEC and/or EEC payouts, please sign up using the Decline SEC EEC form.

Returning SEC payouts
To return a SEC payout that you have received, please do so via internet banking fund transfer. IRAS’ bank account details are as follows:

Payee: IRAS-SEC SUB-FUND
Account Type: DBS Current Account
Account No.: 072-033405-1
DBS Swift Code: DBSSSGSG

To facilitate the processing of your return, please indicate your business name and purpose (e.g. ABC Pte. Ltd. Decline SEC and/or EEC) under the “Beneficiary Reference / Purpose of Payment / Remittance Information / Payment Details” field.

Returning EEC payouts
To return a EEC payout that you have received, please do so via internet banking fund transfer. IRAS’ bank account details are as follows:

Payee: IRAS-EEC SUB-FUND
Account Type: DBS Current Account
Account No.: 072-033407-8
DBS Swift Code: DBSSSGSG

To facilitate the processing of your return, please indicate your business name and purpose (e.g. ABC Pte. Ltd. Decline SEC and/or EEC) under the “Beneficiary Reference / Purpose of Payment / Remittance Information / Payment Details” field.

Please do not send cheques for the return of SEC and EEC.

D. Other Questions

Do I get taxed on the payout?

The payout will be taxable in the year of receipt.

SEC, CTO and EEC are wage offsets to support the employment of senior workers and persons with disabilities. Hence the payout is considered revenue in nature as it is directly connected to their businesses to defray operating costs.

Individuals (including sole proprietors) and partnerships are not required to declare the scheme payouts received in their income tax returns (Form B/B1 or Form P) as this will be automatically included by IRAS in their tax assessments for the relevant YA.

Companies are however, required to declare the payout received in their income tax return (Form C/Form C-S) for the relevant YA.