The Uplifting Employment Credit (UEC) is a wage offset scheme introduced by the Government at Budget 2023 to support employers who hire ex-offenders.
What is the UEC?
Uplifting Employment Credit (UEC)
To support the employment of ex-offenders, the UEC will be given to employers who hire local ex-offenders (Singapore Citizen or Permanent Resident) earning below $4,000 and released within three years prior to employment.
The UEC provides a wage offset of up to 20% of the employees’ monthly income, capped at $600 per month for each employee for the first nine months of employment. The scheme will be applicable to ex-offenders hired from April 2023 to December 2025.
Who qualifies for the UEC?
Employers who hire ex-offenders earning a monthly wage of below $4,000 and have made timely mandatory CPF contributions for the employee will qualify for the payout. Wages paid to business owners1 or employers trading in their own personal capacity2 will not be eligible for the UEC, even if they made CPF contributions for themselves through their entity.
1Business owners are defined as follows:
a. Sole proprietor of a sole proprietorship
b. Partners of a partnership (including general partnerships, limited liability partnerships and limited partnerships); and
c. Both a shareholder and director of a company. The definition of director is as set out in Section 4(1) of the Companies Act. For companies limited by guarantee, this applies to employees who are both members and directors of the company.
2Employers trading in their own personal capacity include, but are not limited to, hawkers who do not have UEN, and employers hiring local personal drivers or local domestic helpers.
Local government agencies, International Organisations and businesses not registered in Singapore do not qualify for the schemes.
The full employer exclusion list is appended:
- Local Government Agencies including Organs of State, Ministries and Departments, Statutory Boards
- Government and Government-Aided Schools
- PA Services and Grassroot Units
- High Commissions, Embassies, Trade Offices, Consulate
- Unregistered Local/Foreign Entities
- Foreign Military Units
- Representative offices of:
- Foreign companies
- Foreign Government Agencies
- Foreign Trade Associations/ Foreign Chambers/ Foreign Non-profit Organisations
- Foreign Law Practices
- Bank Representative Offices/Insurance Representative Officers/Other Financial Representative Offices (registered with MAS); News Bureaus (which are representative offices);
- International Organisations
- Entities which pay CPF but are not registered in Singapore
How do employers apply for the payouts?
Employers who hire ex-offenders through Yellow Ribbon Singapore, Industrial & Services Co-operative Society (ISCOS) and halfway houses in contract with Singapore Prison Service do not need to apply for the payouts. Payouts will be disbursed automatically to eligible employers.
Other employers of ex-offenders can apply to IRAS via go.gov.sg/applyUEC from 1 April 2023. The applications will be processed according to the annual payout schedule.
IRAS will notify eligible employers of the UEC amount payable to them.
When will employers receive the payouts?
The UEC payout for wages paid from January to December will be disbursed in May of 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 be credited to employers’ GIRO bank account linked for the payment of Income Tax/GST. For those without IRAS GIRO arrangement, the payouts will be made to the bank account that is registered with PayNow Corporate3. To receive UEC payouts, employers who have yet to sign up for these payment modes are required to do so.
3Organisations 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.
How is each payout computed?
|Monthly Wage of ex-offender employee ($)||Payout|
|≤ $3,000||20% of wage|
|>$3,000 to <$4,000||$2,400 - (0.6*wage)|
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.
A. 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?
E-Payment is the fastest way for employers to receive money from the Government.
B. Declining and Returning Payout
Can I decline the payout if I do not need the support?
Yes. You can submit an enquiry via go.gov.sg/askUEC and inform us on whether you are declining the next payout or all future payouts.
C. Other Questions
Do I get taxed on the payout?
The payout will be taxable in the year of receipt. The UEC is a wage offset to support the employment of ex-offenders. Hence, the payout is considered as revenue as it helps businesses defray operating costs.
Individuals (including sole proprietors) and partnership 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 assessment for the relevant year of assessment.
Companies are required to declare the payout received in their income tax return (Form C/Form C-S) for the relevant year of assessment.
Why is my firm not automatically eligible for support under the UEC for hiring ex-offenders directly instead of going through Yellow Ribbon Singapore or its partners?
This is to protect the confidentiality of ex-offender’s status, as disclosure to employers during recruitment is not mandatory.