SINGAPORE: About S$370 million in government payouts under the Jobs Support Scheme (JSS) were erroneously credited to about 5,400 companies in October last year, after mistakes were made in computing the disbursements.
The overpayments make up about 6 per cent of the total amount paid out under JSS last October, said the Ministry of Trade and Industry (MTI), the Ministry of Finance (MOF) and the Ministry of Manpower (MOM) on Thursday (Apr 8).
Explaining what happened, the ministries said the payouts were computed based on the dates that the companies reopened after the COVID-19 “circuit breaker”, which ended in June last year.
However, there had been “errors in the compilation and processing of business reopening dates”, said the ministries in a media release. The companies that were paid extra were erroneously tagged as having reopened later, making them qualify for a higher payout.
About 5,400 firms were affected, or about 3.6 per cent of all companies that received payouts.
The affected businesses are mostly those that support projects in the construction, marine and process sector and tourism sector, said the ministries.
The Government expects to recover most of the money through automatic offsets from subsequent JSS payouts, as well as companies returning the excess payments, said the ministries.
READ: Budget 2021: Jobs Support Scheme extended for worst-hit sectors as part of S$11 billion package
The JSS was introduced during the Budget in February last year to help firms retain local workers by subsidising their salaries. The Government later expanded the scheme to provide more support to firms as most had to close during the circuit breaker from Apr 7 to Jun 1.
Authorities had said last month that about 5,500 employers will have their March 2021 payouts delayed until end-April, “pending a reconciliation” by MTI on firms' reopening dates used in the computation of the payouts.
HOW THE ERROR OCCURRED
While most businesses were allowed to reopen in phases when the circuit breaker ended, businesses in the construction, marine and process sector and tourism sector could only reopen upon approval from MTI.
Government agencies received more than 1.8 million applications, which were then consolidated by MTI.
“As the processes for the resumption of business activities had to be implemented at short notice, MTI used existing systems and manual processes to grant approvals for businesses to reopen,” said the ministries in the press release.
“Unfortunately, in so doing, mistakes were made with the reopening dates and concomitantly the JSS payouts and foreign worker levy/waiver payable,” they added.
“The error meant that these companies were deemed to have been closed for a longer period of time, and thus allocated a higher JSS payout.”
READ: Singapore to exit circuit breaker on Jun 1, visiting of parents, places of worship allowed with restrictions
For example, a bank that could resume operations after the circuit breaker ended was tagged with a later reopening date as it was a client in a construction project that needed approval from MTI.
RECOVERY OF EXCESS PAYOUTS
Of the S$370 million that was erroneously paid out, S$140 million will be recovered through automatic offsets from subsequent JSS payouts, and S$200 million will be through the “commitment of the larger affected businesses contacted by MTI and other agencies to return the excess payment”, the ministries said.
The Inland Revenue Authority of Singapore (IRAS) will first offset the excess amount against the businesses’ future JSS payouts. If future payouts are insufficient to offset the amount of excess payment, the authorities will inform affected businesses of any outstanding excess amount to be returned after the businesses’ final JSS payout, they said.
“Instalment payment arrangements will also be available for businesses that need them,” the authorities said. No action is required from affected businesses for now, they added.
Businesses that want to return the outstanding excess amount upfront may do so through IRAS. Instructions will be included in the letters to the affected businesses.
At the same time, 1,100 businesses were identified to be eligible for additional JSS payouts, amounting to SS$5.5 million. The additional JSS allocation will be credited to businesses by end-April 2021, the ministries said.
As a result of the incorrect tagging of businesses’ reopening dates, excess foreign worker levy waivers and rebates amounting to about S$1.2 million were also granted to 360 businesses in June and July 2020, the ministries said.
MTI and MOM said they will reach out to the affected businesses to recover the excess waiver and rebate.
About 1,200 businesses will be granted S$6 million in additional waivers and rebates after having been identified to be eligible. The waiver will be automatically adjusted from the businesses’ future levy bill, while the rebate will be credited to businesses directly.
No action is required from affected businesses for now. MTI and MOM will inform affected businesses of any follow-up actions required by May this year, the ministries said.
HOW ERRORS WERE DISCOVERED
According to the ministries, IRAS first detected anomalies in November last year as part of its regular processing checks on the JSS.
Subsequently, several businesses also informed IRAS that they might have received excess JSS payouts.
“In December 2020, the cause of the overpayments was subsequently traced to discrepancies in companies’ reopening dates,” they said.
After being informed by IRAS of the discrepancies, MTI embarked on an “extensive investigation” with other agencies.
“MTI established that there had been errors in the compilation and processing of business reopening dates, which was used for the computation of the JSS payouts and determination of businesses’ eligibility for levy waiver and rebate,” the authorities said.
To prevent a potential recurrence of the issue, MTI has worked with MOF, MOM and IRAS to rectify the processes and implement additional checks to detect and flag possible errors, the ministries said.
They added that an external auditor was engaged to conduct a “thorough check” to verify the reopening dates that are used in the computation of JSS payouts.