S$370m in excess JSS payouts wrongly credited to 5,400 businesses last Oct

Singapore

PROCESSING errors caused S$370 million in excess Jobs Support Scheme (JSS) payouts to be credited to 5,400 businesses last October, the Ministry of Trade and Industry (MTI), Ministry of Finance (MOF), and Ministry of Manpower (MOM) said in a joint media statement on Thursday.

Such errors also resulted in S$1.2 million in excess foreign worker levy waivers and rebates being granted to 360 businesses in June and July.

Incorrect reopening dates - which affected the level of support firms were meant to receive - had been assigned to the affected businesses within the government's database.

These were mostly firms involved in construction, marine, and process (CMP) projects, but not part of that sector. In response to queries, MTI said these included "manufacturing and service firms supporting construction projects", and clients of construction projects, such as banks.

Of the S$370 million in JSS overpayment, some larger firms - fewer than 100 - account for S$200 million. They have been contacted by MTI and other agencies, and have committed to returning the excess.

Another S$140 million will be recovered from other firms via deductions from future JSS payouts.

The remaining S$30 million, spread out over more than 1,000 firms, is in excess of future JSS payouts and thus cannot be reclaimed via offsets. Affected businesses will have to repay this in cash.

Instalment payment arrangements will be available for businesses that need them, said the ministries.

Overall, for more than two-thirds of affected firms, the excess payout would have been less than S$10,000.

For the excess foreign worker levy waivers and rebates, MTI and MOM will reach out to affected businesses to recover the sums.

Explaining the error, the ministries said that the incorrect dates were assigned when applications to resume work were processed.

For wages paid in April and May 2020, during the "circuit breaker", all sectors were eligible for the highest Tier 1 level of JSS support.

Most sectors then reopened in phases, receiving lower tiers of support as they did so. Businesses in the tourism and CMP sectors, however, had to apply for approval to reopen. More than 1.8 million such applications were processed.

Some of these applications to resume work included other firms which were involved in the projects. As part of the manufacturing or services sectors, such firms would have already reopened, and would no longer be eligible for Tier 1 support.

But when the applications were processed, the new project resumption date "overwrote" the true re-opening date for the non-CMP firms.

This meant that the firms appeared to have been closed for longer than they actually were, and thus received higher JSS payouts in October - for wages paid out from May to August - than they should have.

The S$370 million figure is about 6 per cent of the total S$5.9 billion in JSS payouts in October, and the affected firms are about 3.6 per cent of all firms which received payouts.

Separately, another error meant that some firms received lower JSS payouts or foreign worker levy waivers and rebates than they should have. These firms were granted conditional approvals to go on-site, but not to resume business per se. The conditional approval dates were wrongly applied as reopening dates, such that the firms seemed to have resumed business earlier than was the case.

As a result of this error, some 1,100 businesses are eligible for additional JSS payouts, amounting to S$5.5 million. This will be credited to them by the end of April.

Due to the same error, about 1,200 businesses are eligible for an additional S$6 million in foreign worker levy waivers and rebates. The waiver amount will be applied to future levy bills, and the rebates will be credited directly.

The Inland Revenue Authority of Singapore (Iras) had first noticed anomalies in November as part of regular checks on the JSS. Several businesses also informed Iras that they might have received excess payouts.

In December, the cause of overpayments was traced back to discrepancies in reopening dates. Iras informed MTI, which started investigations with other agencies and discovered the errors in the compilation and processing of business reopening dates.

The ministries said extra checks have been put in place to detect and flag errors. An external auditor was engaged to verify the reopening dates for computation of future payouts.

All affected firms will be notified by letters and emails. From April 10, businesses may also log in at https://go.gov.sg/reopeningdate using their CorpPass to check if they are affected.

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