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Budget 2020: More support for transformation of workforce, including SkillsFuture top-ups

Budget 2020: More support for transformation of workforce, including SkillsFuture top-ups

File photo of workers outside an MRT station in Singapore's Central Business District. (Photo: TODAY)

SINGAPORE: More support will be given to enterprises and workers in their transformation journey in the midst of major structural changes in the global economy.

A one-off S$500 SkillsFuture top-up will be made available for every Singaporean aged 25 and above, as part of the Government’s efforts to support workers to develop new skills.

The top-up will be available for use from Oct 1 this year, and will remain valid for five years, until Dec 31, 2025.

“This is to encourage Singaporeans to take action early to learn new skills, and to make the best use of this period of economic slowdown,” said Deputy Prime Minister Heng Swee Keat, as he delivered the Budget statement in Parliament on Tuesday (Feb 18).

Enterprises will also benefit from the Government’s investment into the “next bound of SkillsFuture”, with a new SkillsFututre Enterprise Credit.

Meant to “encourage employers to embark on the transformation of their workforce and enterprise in tandem”, each enterprise will receive S$10,000 to “defray 90 per cent of out-of-pocket costs of business transformation, job redesign and skills training”, said Mr Heng, who is also the Minister for Finance.

To encourage employers to transform their workforce, S$3,000 out of the S$10,000 will be reserved for workforce transformation programmes.

This is expected to benefit about 39,000 enterprises, and there will be four qualifying windows up until Mar 31, 2021 for employers to apply. After qualification, employers may make claims on supported programmes from Apr 1, 2020 until Jun 30, 2023.

Job redesign will get a boost as the Government will expand the Productivity Solutions Grant to include job redesign consultancy services. Currently, the grant supports companies to adopt long-term technology investments to enhance their business processes.

The Government also aims to train sectors and value chain partners of up to 40 large anchor enterprises.

“Anchor enterprises are supported by many SMEs (small and medium enterprises). By helping raise the skills of workers in these SMEs, the entire supply chain benefits,” Mr Heng said.

Deputy Prime Minister and Finance Minister Heng Swee Keat delivers Budget 2020 in Parliament on Feb 18, 2020.

About 4,000 small- and medium-size enterprises (SMEs) will benefit from the initiative over the next five years.

The capacity of SkillsFuture Work-Study programmes will more than double by 2025.

“Our aim is to make this a mainstream pathway, with 12 per cent of each cohort going through these pathways, up from 3.5 per cent today,” said Mr Heng. 

Mr Heng added that the Government will “deepen workplace learning capabilities”. The National Centre of Excellence for Workplace Learning, now based at Nanyang Polytechnic, will expand to two more Institutes of Higher Learning and benefit more than 1,200 enterprises.

“In line with our focus on the role of industry in SkillsFuture, we will also recalibrate Government funding towards training providers and courses with a stronger link to job and wage outcomes,” said Mr Heng.


A SkillsFuture Mid-Career Support Package aimed at Singaporeans in their 40s and 50s will be introduced.

This will “help them stay employable and move on to new jobs or new roles”, said Mr Heng. The aim is to double the placement of locals in their 40s and 50s, to about 5,500 by the year 2025.

More workers will also be able to apply for reskilling programmes, as the Government plans to increase capacity for the Professional Conversation Programme, career transition programmes by Continuing Education and Training (CET) centres, and Place-and-Train programmes for rank-and-file workers.

To support reskilling, each Singapore aged 40 to 60 in 2020 will also receive an additional S$500 SkillsFuture Credit this year, in addition to the S$500 offered to all Singaporeans. This will also expire in five years, “to encourage early action”, said Mr Heng.

This can be used from Oct 1 on about 200 career transition programmes by CET centres.

READ: Budget 2020: S$4 billion stabilisation and support package for workers, firms amid COVID-19 outbreak

The Government will assemble a group of volunteer career advisors to provide career guidance to mid-career workers.

Employers will also have to “step up to recruit, retain and retrain our local mid-career workers”, said Mr Heng.

Companies which hire Singaporeans aged 40 and above through reskilling programmes will receive 20 per cent salary support for six months, capped at S$6,000 in total.

“As enterprises restructure, the nature of jobs has changed … At the same time, with broader global shifts, exciting jobs will emerge. Our mid-career workers can seize these opportunities and do better for themselves and their families,” said Mr Heng.


To ease the impact on employers and workers from the expected increase in retirement and reemployment ages and higher CPF contribution rates for workers aged 55 to 70, a Senior Worker Support Package will be introduced.

It comprises four measures.

A Senior Employment Credit will replace the Special Employment Credit and the Additional Special Employment Credit from 2021. Employers will receive wage offsets when they employ Singaporeans 55 years and above, with support “tapering down over time” as the Government raises the retirement and re-employment ages.

READ: NDR 2019: New retirement, re-employment ages of 65 and 70 by 2030; higher CPF contributions for older workers

When employer CPF contributions increase next year, the Government will offset half of the increase with a CPF Transition Offset for the year.

Employers who raise their own retirement and re-employment ages ahead of the national schedule will receive a Senior Worker Early Adopter Grant from Jul 1, 2020 to Jun 30, 2023.

To encourage enterprises to “formalise part-time re-employment provisions”, there will also be a Part-Time Re-employment Grant, for companies who commit to offering part-time re-employment to eligible older workers who wish to take on such positions.


The S-Pass sub-Dependency Ratio Ceilings (DRCs) of the Construction, Marine Shipyard and Process sectors will fall to 15 per cent this year.

The DRC is the maximum permitted ratio of foreign workers to the total workforce that a company is allowed to hire. 

The cuts will be in two steps. The first, from 20 per cent to 18 per cent on Jan 1, 2021; and subsequently to 15 per cent on Jan 1, 2023.

There will not be any reduction for the manufacturing sector, “given the economic uncertainties”, said Mr Heng. But the Government intends to tighten the ratio in time.

“At the same time, we recognise potential concerns of enterprises about the availability of skilled manpower in these sectors,” said Mr Heng.

He added that SkillsFuture Singapore and Workforce Singapore will match local graduates and older local professionals with employers, and enterprises with specific needs “can continue to apply for additional manpower flexibilities in exceptional cases”.

Foreign worker levy rates will remain the same for all sectors for 2020.

“The growth in S-Pass holders must be sustainable. The Government has been working closely with industry and educational institutions to build up a pipeline of local manpower, including mid-career workers,” said Mr Heng.

“We want them to have fair opportunities to grow, while supporting the manpower needs of enterprises.”

Source: CNA/cc


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