Over S$370m wrongly disbursed to 5,760 firms due to government admin error; another 2,300 firms underpaid
SINGAPORE — The Government has erroneously credited over S$370 million in payouts under the Jobs Support Scheme as well as wrongfully granted S$1.2 million in foreign worker levy waivers and rebates to firms. This was after an administrative error led to the miscalculation of reopening dates for businesses following the circuit breaker period.
- Incorrect reopening dates were used to compute payouts to the Jobs Support Scheme
- The dates also determine if businesses were eligible for foreign worker levy waivers and rebates
- The payouts were given mainly to firms involved in construction, marine and process projects
- The companies do not have to take any action for now, Iras will offset the excess amount against future payouts
- The Government will contact companies to claw back the foreign worker levy waiver and rebate sums
SINGAPORE — The Government has erroneously credited more than S$370 million in payouts under the Jobs Support Scheme as well as wrongfully granted S$1.2 million in foreign worker levy waivers and rebates to firms. This was after an administrative error led to the miscalculation of reopening dates for businesses following the circuit breaker period.
As a result, about 5,400 companies received extra money under the Jobs Support Scheme in their bank accounts last October, and another 360 companies had excess levy waivers and rebates granted to them in June and July last year.
The Ministry of Trade and Industry (MTI), Ministry of Finance (MOF) and Ministry of Manpower said these in a press release on Thursday (April 8).
About S$340 million, or more than 90 per cent of the wrongly disbursed funds, will be recovered through automatic offsets from subsequent payouts and commitment of larger firms to return excess payment.
The Government introduced the Jobs Support Scheme as a way to help companies retain jobs during the Covid-19 crisis by offsetting the salaries of Singapore employees. Foreign worker levy waivers and rebates were another relief measure granted to firms.
In uncovering this error, the Government also found that it had underpaid 1,100 businesses a total of S$5.5 million under the scheme and underpaid 1,200 businesses a total of S$6 million in foreign worker levy waivers and rebates.
WHAT CAUSED THE ERROR
The Inland Revenue Authority of Singapore (Iras) first detected the anomalies in November last year as part of its regular checks on the scheme.
Around the same time, several businesses also alerted Iras to the excess payouts that they had received.
Iras then traced the cause of the overpayments to discrepancies in companies’ reopening dates last December and alerted MTI, which then launched an extensive investigation involving other agencies.
In their press release, the ministries said that the mistake came about when “agencies had to process, at short notice, more than 1.8 million applications” from businesses to resume operations when the circuit breaker or partial lockdown period, imposed to help curb the spread of Covid-19, ended on June 1 last year.
As MTI was using existing systems and manual processes to grant the approvals, its officers made mistakes when compiling and processing business reopening dates, the ministries added.
Firms supporting businesses in the construction, marine and process sectors, such as subcontractors or manufacturing firms, are the ones primarily affected.
The ministries explained that construction, marine and process, as well as tourism businesses were only allowed to reopen upon MTI’s approval, unlike most businesses, which were permitted to reopen in phases after the circuit breaker was lifted.
When computing the Jobs Support Scheme amounts and foreign worker levy waivers and rebates for these groups, MTI had to apply the approved reopening dates.
But when doing so, it incorrectly tagged these later reopening dates to some businesses supporting the yet-to-be-opened industries although they might have already reopened for business.
For instance, for firms that had to remain closed and receiving the highest support for wages, other firms supporting them that were already allowed to open, such as a bank that was a client for a construction project, also came to receive the highest tier of wage support, when they were not eligible for that anymore.
Some of these businesses may also have been granted foreign worker levy waiver and rebates based on the incorrect reopening date, even though they were already operating.
As for the underpayment, the ministries said that it occurred when the date of conditional approval granted, which is usually an earlier date, was incorrectly applied as the reopening date of the firm, instead of the firm’s actual reopening date.
HOW MONEY WILL BE RECOVERED
The S$370 million in excess payouts constituted about 6 per cent of the total amount disbursed in October last year, with the 5,400 companies affected making up 3.6 per cent of all firms that received payouts.
The ministries noted that fewer than 100 large firms received S$200 million of the excess payment in total, while the excess payouts would have been smaller than S$10,000 in total for more than two-thirds of the affected firms.
A total of S$140 million will be recovered through automatic offsets from subsequent payouts under the scheme.
MTI and other agencies have also received the commitment from larger businesses to return the total of S$200 million.
Asked by TODAY how the ministries intend to get back the remaining S$30 million, they would only say that firms facing difficulties in returning excess payouts will be given the option of repaying in instalments to help ease their cash-flow issues.
The authorities will also consider extending the instalment period or refer them to appropriate schemes for cashflow assistance for businesses that write in through email (reopeningdate [at] mti.gov.sg) seeking further help.
WHAT COMPANIES NEED TO DO
The ministries said companies that were overpaid do not have to take any action for now.
To get back the excess payouts, Iras will first offset the excess amount against businesses’ future payouts.
If future payouts are not enough to offset the amount of excess payment, MTI, MOF and Iras will inform affected businesses of any outstanding excess amount to be returned after the businesses’ final payout.
To help businesses facing cash-flow issues, instalment payment arrangements will also be available for those that need them, the ministries said.
Businesses that wish to return the outstanding excess sums upfront may also do so through Iras.
As for the overpayments linked to foreign worker levy waivers and rebates, MTI and MOM will be reaching out to the affected businesses by May this year.
For businesses affected by underpayments, the ministries said that the additional Jobs Support Scheme payouts will be credited to the affected businesses by the end of this month.
The owed foreign worker levy waiver will be automatically adjusted from the businesses’ future levy bill while the rebate will be credited to businesses directly.
Affected businesses will be notified by letters and emails or they may log on from Saturday onwards to their CorpPass account, the Government’s online portal for corporate transactions with governmental agencies.
HOW TO PREVENT MISTAKES IN FUTURE
The ministries said that MTI has worked with MOF, MOM and Iras to rectify the processes and instituted more checks to detect and flag possible errors.
An external auditor was also engaged to conduct a thorough check to verify the reopening dates used in the computation of Jobs Support Scheme payouts.