New $1.5 Billion Support Package Overview: To Help Singaporeans & Businesses Cope With Inflation

HALP lah, we’ve all been hit hard by inflation lately and the prices of food and petrol seemed to be climbing non-stop.

Heng ah, the Government will be pushing out a $1.5 Billion Support Package to support Singaporeans!

The support package is funded from surpluses as there were higher revenues from the financial year 2021.

Due to the stronger economic recovery, spending on COVID-19 measures by the Government was lower than anticipated. There will be no further draw on past reserves.

A closer review of the support package actually shows that it’s tilted towards helping the lower-income and vulnerable groups, but it also didn’t neglect all households, businesses, workers and self-employed persons.

Here’s an overview of the key measures and what you need to know!

TL;DR: $1.5 Billion Support Package And Who Can Benefit From It

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• One-off $300 Special GST voucher in August 2022
• All Singaporean households to receive $100 utility credits in September 2022
• Enhancements to ComCare assistance schemes and Singapore Allowance
• Enhancements to support lower-wage workers, vulnerable groups and Self-Employed Persons
• Enhancements to subsidies, schemes and grants for local businesses

Note: As the story is still developing, we will update the article when more details are released.

1.5 Million Singaporeans To Receive $300 Cash As Special GST Vouchers

“The inflation situation will eventually stabilise both globally and within Singapore, but for now we must expect price increases to continue in the coming months…In particular, energy prices are likely to remain elevated for the rest of the year.” – Singapore’s Deputy Prime Minister and Finance Minister, Lawrence Wong

If you recall, in Budget 2022, the Ministry of Finance (MOF) announced three support schemes to help lower to middle-income Singaporean households cope with the impending GST increase in 2023 and 2024.

With the latest announcement, about 1.5 million eligible Singaporeans will receive a special GST Voucher payment of up to $300 in August 2022.

You will need to be 21 years and above in 2022, have an assessable income of less than $34,000 for 2021, and whose homes have an annual value under $21,000 to qualify for this.

This also means that when combined with the previously announced GSTV-Cash, eligible Singaporeans can get up to $700. 

It’s not a lot, but mai hiam buay pai lah (if you’re not fussy, it’s not bad).

A little goes along the way since this disbursement is to help Singaporeans who are disproportionately impacted by the effects of inflation, particularly the low to middle-income workers, as well as retirees.

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All Households To Receive A $100 Utilities Credit To Offset Bills

Yay, this measure benefits Singaporean households, including those staying in private properties!

If you’ve noticed by now, energy prices are likely to remain elevated for the rest of the year.

The utility credit will help you offset your utility bills and it will be disbursed by September 2022.

This is also a timely reminder to start reviewing your electricity bills or look into cost-saving methods for your utilities.

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Enhancements to ComCare Scheme & Singapore Allowance

There are also enhancements to support the lower-income and elderly.

The first enhancement is on ComCare, which is a social assistance scheme that provides short, medium or long-term assistance to low-income individuals and households.

With the latest changes, a one-person household that is on Long-Term Assistance (LTA) will be able to get financial support of $640 per month, up by $40 per month.

For those who are on ComCare Short-to-Medium-Term Assistance (SMTA) or are applying to renew their Comcare assistance, they would receive at least six months of assistance or additional three months of assistance, respectively.

Do note that the amount of cash assistance provided depends on the household composition, needs, and income.

The other scheme that will be enhanced is the Singapore Allowance, which targets pensioners who draw lower pensions.

With the latest enhancement, the monthly pension ceiling will be upped by $30 each, to $350 and $1,280 respectively.

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Enhancements To Support Lower Wage Workers, Vulnerable Groups & Self-Employed Persons

1. Higher Subsidies for Progressive Wage Credit Scheme

Apart from direct help for households, the $1.5 billion package is said to help lower-wage workers and businesses through the Progressive Wage Credit scheme (PWCS).

The PWCS was introduced in Budget 2022 as a co-fund scheme to provide transitional wage support to employers.

According to the Inland Revenue Authority of Singapore, the implementation of this scheme helps employers to adjust to the following:

• Mandatory wage increment for lower-wage workers covered by the Progressive Wage and Local Qualifying Salary requirements
• Voluntary wage increments by employers for lower-wage workers

For first-tier employees with gross monthly wages of up to $2,500, the Government will increase its co-funding for eligible wage increases in 2022 from 50% to 75%.

Similarly, for second-tier employees with a gross monthly wage between $2,500 and $3,000, the co-funding will be bumped up from 30% to 45%. 

2. Extension of Jobs Growth Incentive Scheme

The Jobs Growth Incentive Scheme is a new scheme introduced during the Budget this year.

It aims to support employers who hire vulnerable groups, including adult job seekers who have not been working for at least six months, people with disabilities and ex-offenders. 

The scheme will be extended from September 2022 to March 2023. 

3. Reliefs For Self-Employed Drivers

Targeted help is also provided to Self-Employed Persons who have been affected by fuel price hikes.

A one-time relief of $150 will be given to eligible taxi drivers and private hire car drivers.

Combi-bus and limousine drivers, delivery drivers and riders, will be eligible to apply for the National Trades Union Congress (NTUC)’s Freelancers and Self-Employed scheme (NTUC U FSE Relief Scheme), which will provide them with cash relief of up to $300 if they are successful.

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Enhancements and Support Measures For Local Businesses

1. Energy Efficiency Grant for Local Small And Medium Enterprises

The Government will roll out a new Energy Efficiency Grant for local small- and medium-sized enterprises (SMEs) in sectors that are significantly affected by higher electricity prices.

Eligible sectors include Food & Beverages, Food Manufacturing and Retail.

The grant is said to provide up to 70% support (i.e., capped at $30,000 per company) to adopt energy-efficient equipment in pre-approved categories e.g., LED lighting, air-conditioners, cooking hobs, refrigerators, water heaters and dryers.

This new scheme works to complement other energy efficiency initiatives such as a fund administered by the National Environment Agency that supports businesses in the manufacturing sector.

2. Enhancements to the Enterprise Financing Scheme

There are two types of Enterprise Financing Scheme that will be enhanced.

The first is Enterprise Financing Scheme – Trade Loan; the maximum loan quantum will be increased from $5 million to $10 million, from 1 July 2022 to 31 March 2023.

The Government will also continue to provide 70% risk-share for the scheme during this period.

Companies can also tap on the Temporary Bridging Loan Programme for their working capital needs from now until the end of September 2022. 

When this programme expires, the Enterprise Financing Scheme – SME Working Capital Loan will be enhanced, with the maximum loan quantum increased from $300,000 to $500,000.

This will be from 1 October 2022 to 31 March 2023.

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But…There’ll Be No Delay To GST Hike in 2023 and 2024

You read that right. 

Despite the inflation and support package, the Government will not delay the upcoming increase in GST. 

This means that from 1 Jan 2023, the GST will still rise from 7% to 8%, and this will be further increased to 9% in 2024.

Sigh, looks like we have to embrace this no matter what.

At least, in our personal capacity, we can always find ways to manage our living expenditures.

What are your thoughts on the new support scheme?

Share them with us at the Seedly Community, or just comment below!

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