Singapore Budget 2023 Summary

On 14 February 2023, Deputy Prime Minister and Minister of Finance, Mr Lawrence Wong, delivered the Singapore Budget Statement for FY2023. By “Moving Forward In A New Era” following the pandemic, Budget 2023 sets out key moves to secure a brighter future and build the country’s resilience.

Here is a summary of highlights from Budget 2023 relevant to employers.

JOB-SKILL INTEGRATORS

Alongside efforts that develop labour market intermediaries to bridge the nation’s workforce skill gaps, Job-Skills Integrators will connect with industry, training and employment facilitation partners in the Precision Engineering, Retail and Wholesale Trade sectors, where there are higher concentrations of mature workers and small and small-medium enterprises. As Integrators, they are to work with key industry players, training, and employment partners to identify manpower trends and skill gaps and optimise training and job placement. Details to be announced during the Committee of Supply.

EMPLOYMENT ASSISTANCE FOR SENIOR CITIZENS

The Senior Employment Credit (SEC) will be extended until 2025 to continue providing wage offsets to employers that hire senior Singaporean workers aged 60 & above and earning up to $4000/month. The Part-time Re-employment Grant will also be extended until 2025, to encourage employers to offer part-time re-employment, other flexible work arrangements and structured career planning to senior citizens.

EMPLOYMENT CREDIT FOR PERSONS WITH DISABILITIES AND EX-OFFENDERS

To support employers hiring Singaporeans with disabilities (PwDs), who are aged 13 and above and earning below $4000 per month, the Enabling Employment Credit (EEC) will be enhanced to cover a higher proportion of wages and a longer duration for PwDs who have not been working for at least six months.

An Uplifting Employment Credit will also be introduced as a time-limited wage offset to encourage firms to employ ex-offenders.

PROGRESSIVE WAGE CREDIT SCHEME

First introduced in 2022, the Progressive Wage Credit Scheme fund will receive a top up of $2.4 billion for lower-wage workers, and a higher government co-funding share of eligible wage increases will be maintained.

FLEXIBLE WORK ARRANGEMENTS

By 2024, the Tripartite Standard on Flexi-Work Arrangements will be implemented, which means that employers will be required to consider staff requests for such flexi-work arrangements fairly and properly.

LEAVE ENTITLEMENTS

The Government-Paid Paternity Leave will be doubled from two weeks to four weeks for eligible working fathers of Singaporean children born on or after 1 January 2024.

The extra two weeks will first be given on a voluntary basis, so that employers who are ready to grant the additional leave will be reimbursed by the Government. This is also to give more time for employers to adjust, especially with the existing economic conditions and manpower and operational challenges that many employers face.

Unpaid Infant Care Leave is also set to increase for each parent during the child’s first two years, from the current six days per year to 12 days per year. This will take place from 1 January 2023 onwards for all eligible working parents – who have worked with their employer for at least three months continuously – with Singaporean children below two years of age.

CENTRAL PROVIDENT FUND (CPF)

The Government has announced acceptance of the Advisory Committee’s recommendations, to align the CPF contribution rates of Platform Workers and Companies with those of employees and employers. This increase in CPF contributions will be phased over five years.

Platform Workers who are below 30 years old when the changes come into force will be required to make increased CPF contributions. Platform Companies will also be required to pay CPF contributions for these Platform Workers.

For the first four years after implementation, the Platform Worker CPF Transition Support (PCTS) will be introduced to support lower-income Platform Workers who see an increase in their CPF contribution rates.

The PCTS will offset part of the Platform Worker’s share of the year-on-year increase in their CPF Ordinary and Special Account (CPF-OSA) contribution rates from Years 1 to 4. Singaporean Platform Workers earning $2,500 or less per month will be eligible for the offset if they are required to or choose to make contributions based on the Aligned CPF Contribution Rates. This scheme will affect platform work and other employment sources.

For senior workers aged 55 to 70, the next increase in CPF contribution rates will take effect on 1 January 2024. The first two stages of the gradual rate change took effect on 1 January 2022 and 1 January 2023 respectively.

Table 1: Current and Target CPF Contribution Rates (Employer + Employee) by Age Band

Employers will be provided a one-year CPF Transition Offset equivalent to half of the 2024 increase in employer CPF contribution rates for every Singaporean and Permanent Resident worker they employ aged above 55 to 70. (Table 2)

Table 2: CPF Contribution Rates for Senior Workers from 1 January 2024

The minimum CPF monthly payout will also be increased to $350 from 1 June 2023 for all seniors on the Retirement Sum Scheme (RSS). Seniors currently receiving less than $350 per month will benefit from the increase. Retirement Sum Scheme (RSS) Payouts will continue until CPF savings are fully utilised. Seniors before the age of 80 may opt to join CPF LIFE to receive lifelong payouts.

Lastly, from 1 September 2023 onwards, the CPF monthly salary ceiling will be progressively increased over the next four years from $6,000 to $8,000 by 2026.

Table 3: Changes in CPF Monthly Salary Ceiling

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Additional Resources:

1. Job-skill Integrators: https://www.ssg-wsg.gov.sg/budget2023.html
2. Senior Employment Credit: https://www.iras.gov.sg/schemes/disbursement-schemes/senior-employment-credit-(sec)-cpf-transition-offset-(cto)-and-enabling-employment-credit-(eec)
3. Uplifting Employment Credit: https://www.iras.gov.sg/docs/default-source/budget-2023/budget-2023---overview-of-enterprise-disbursements.pdf?sfvrsn=812f2368_5#:~:text=Uplifting%20Employment%20Credit%20(UEC)%20New,Committee%20of%20Supply%20(COS).
4. Progressive Wage Credit: https://www.iras.gov.sg/schemes/disbursement-schemes/progressive-wage-credit-scheme-(pwcs)
5. Paternity Leave and Unpaid Infant Care Leave: https://www.madeforfamilies.gov.sg/docs/default-source/media-downloads/greater-support-for-singaporeans-in-starting-and-raising-familieseb86e00ef8424544b150fc4ddf5ecf3f.jpeg?sfvrsn=efc4a575_0 

• Central Provident Fund:
  https://www.cpf.gov.sg/member/infohub/news/cpf-related-announcements/budget-highlights-2023?cid=cpfprel:bn:bau:alsgm:cpfoverview:cpf101:announcements
• Seniors Adequacy Measures: annexe4.pdf (mof.gov.sg)
• CPF Transition Support Scheme (Platform Workers): https://www.mof.gov.sg/docs/librariesprovider3/budget2023/download/pdf/annexe3.pdf