Government aims to recover all S$370 million wrongly paid to firms as part of Jobs Support Scheme

Government aims to recover all S$370 million wrongly paid to firms as part of Jobs Support Scheme

People walk along Raffles Place
People are seen at Raffles Place in Singapore on Sep 15, 2020. (Photo: AFP/Roslan Rahman)

SINGAPORE: The Government aims to recover the full amount of about S$370 million wrongly paid to companies in October last year as part of the Jobs Support Scheme (JSS).

"We will do all we can to recover the excess disbursements while ensuring that we minimise inconvenience to firms throughout the process,” said the Ministry of Trade and Industry (MTI), the Ministry of Finance (MOF) and the Ministry of Manpower (MOM) late on Thursday (Apr 8) in response to CNA's queries.

"The Government aims to recover the full amount of overpayment," they added.

“For firms that face difficulties in returning the excess payouts, we will provide them with the options of repaying in instalments. This will help firms to ease cashflow, especially for affected small and medium enterprises (SMEs).”

When asked what will happen if companies do not return the excess amount, and whether they will face penalties, the ministries said that businesses that need further assistance may write in.

“We will evaluate each request for support on a case-by-case basis, depending on the circumstances of each case,” they said.

READ: About S$370 million in payouts erroneously credited to firms under Jobs Support Scheme in October

It was announced on Thursday that about S$370 million was erroneously credited to about 5,400 companies in October last year, after mistakes were made in computing the disbursements.   

There were “errors in the compilation and processing of business reopening dates” after the COVID-19 "circuit breaker", 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.

Authorities had said they expect to recover most of the money through S$140 million in automatic offsets from subsequent JSS payouts, as well as companies returning S$200 million in excess payments.

Fewer than 100 larger firms account for S$200 million of the overpayment, the ministries said in an email response to CNA.

“For more than two-thirds of the firms, the excess payout would have been smaller than S$10,000,” the ministries said. They added that the remainder of excess payouts, about S$30 million, is spread out across 1,000 companies.

In computing the payouts, the incorrect reopening dates were applied primarily to businesses supporting projects in the construction, marine and process sector, but are not from these industries themselves. These firms include those in the services industry like banks, manufacturing industry and engineering industry, the ministries said.

FIRMS INFORMED AUTHORITIES OF EXTRA PAYOUTS

The JSS was introduced during the Budget in February last year to help firms retain local workers by subsidising their salaries.

Mr Paul Rachmadi, deputy chief executive of SME Security & Risk Solutions said that his company received a call from Enterprise Singapore about the overpayments.

He said his firm is waiting for official notice from the agencies to verify the amount that has been overpaid and that his firm would need to return.

On what his company might have done with the additional disbursements, he said: “It has enabled us to protect our employees' jobs and none were retrenched. We have been prudent in the use of the JSS for its main intent.”

About 85 per cent of his firm’s employees are local, he said.

READ: Employers to receive more than S$3 billion in Jobs Support Scheme payouts from Mar 30

Other companies said they noticed the discrepancy and informed the authorities, adding that they are prepared, or have made arrangements to return the additional money.

A spokesperson for security firm AETOS said that in November last year, it conducted its own assessment a month after the JSS payout and detected a “variance between the expected payout and the actual amounts paid”.

“We immediately notified the Inland Revenue Authority of Singapore (IRAS) of the inconsistencies. The disbursements were put on hold and not utilised. We understand that IRAS looked into the matter immediately after we notified them,” the spokesperson said.

Singtel and UOB similarly said that they noticed the excess disbursements and notified the authorities.

Singtel was prepared to return the additional disbursements once it noticed the excess payments, said the firm's chief group human resources officer Aileen Tan. She added that IRAS has since informed the company that the amount will be offset against future JSS payouts.

“We immediately set aside the excess funds to be returned in full, pending their investigations. We are reassured that a convenient process has been set up for companies to return the excess JSS funds,” said Mr Dean Tong, head of Group Human Resources at UOB.

A spokesperson for ST Engineering said that the excess payment is “a very small percentage of the total amount we received”, and while it was not detected earlier, the firm will return whatever is due.

Source: CNA/ja(gs)

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