Self-Employed Person Income Relief Scheme (SIRS): Broadened Support Announced During Solidarity Budget
How Will the Resilience Budget 2020 and Solidarity Budget 2020 Help Self-Employed Persons (SEPS) and Freelancers?
If you’re a Self-Employed Person (SEP), your livelihood has most likely been hit pretty hard because of this whole COVID-19 situation.
It doesn’t help that the stricter Circuit Breaker measures have been announced which will last all the way till 4 May 2020.
Personally, a lot of close friends around me are self-employed — or what we call freelancers — which is why I have a first-hand experience of the hardship that they are going through.
The good news is that the government has announced plenty of measures during the Resilience Budget to help SEPs such as the SEP Income Relief Scheme (SIRS) and Workfare Special Payment.
And if you find them lacking, you’ll be pleased to note that the Solidarity Budget includes enhancements to be made to SIRS.
With the enhancements, approximately 100,000 Self Employed Persons (up from 88,000 previously) will automatically be eligible for the SIRS.
And if you are eligible, you will receive three payments of $3,000 each in May, July, and October 2020.
TL;DR: Solidarity Budget Broadens Support For Self-Employed Persons
What Are The Solidarity Budget Enhancements to SIRS?
The two enhancements are:
- Automatic inclusion of self-employed persons who also earn a small income from employment work
- Current Annual Value threshold to be raised from up to $13,000 to up to $21,000 (to include those who live in condominiums and private properties)
Previously, you could not also earn an income as an employee.
And you cannot be living in a property with an Annual Value higher than $13,000.
The other criteria remain unchanged.
Why These Changes?
After the Resilience Budget was announced, DPM Heng Swee Keat shared that he received feedback from many SEPs that the criteria governing the SIRS were too stringent.
Some SEPs mentioned that they might also engage in employment work to supplement their incomes.
While others might have bought an executive condominium years ago but their current incomes have been severely affected by the COVID-19 pandemic.
DPM Heng also explained that SEPs are a very diverse group.
Consisting of own-account workers, like taxi-drivers, whose business does not employ any paid workers.
And dole proprietors, who own small businesses, that have employees and a network of business relations.
By helping the SEPs, they will be able to help their networks and workers and in turn, help keep the spirit of enterprise alive.
What is Self-Employed Person Income Relief Scheme (SIRS)?
The Self-Employed Person Income Relief Scheme or SIRS was first announced during the Resilience Budget 2020 and is an initiative introduced by the Ministry of Manpower (MOM) to support SEPs with less means.
The intent is to help SEPs tide over this period of economic uncertainty.
Here’s a look at the various schemes and payments announced during the Resilience Budget which are meant to support SEPs:
|Schemes||How Does It Help?|
|SEP Income Relief Scheme (SIRS)||Eligible Singaporean SEPs will receive $3,000 a month, for 3 months|
|SEP Training Support Scheme|
(Extended till end-2020)
|From 1 May 2020, training allowance enhanced to $10/hour|
|Point-to-Point Support Package||Special Relief Fund payments of $300 per vehicle per month for taxi hirers and private hire car drivers, till end-Sep 2020|
|Workfare Special Payment [Enhanced]||$3,000 paid over two equal payments of $1,500 each, in July and October 2020.
Benefits about 50,000 lower-income SEPs.
Note: SIRS-eligible individuals will receive three payments of $3,000 each in May, July, and October 2020.
On top of this, SEPs can choose to defer income tax payment, for income earned in 2019, till August 2020 instead of May 2020.
You can refer to this handy income tax guide to find out how to file your income tax and defer your income tax!
How to Qualify For Self-Employed Person Income Relief Scheme (SIRS)?
For all of my friends out there who are slightly confused about what it means to be self-employed or freelancers.
Here are some guidelines to check if you are eligible for this support package.
SIRS Eligibility Criteria for Singaporean Self-Employed Persons or Freelancers
Singaporean self-employed persons and freelancers are eligible for SIRs if you meet the following:
- Started work as a self-employed person on or before 25 March 2020
- Do not earn income as an employee [Solidarity Budget update: Self-employed persons who also earn a small income from employment may also qualify]
- Earn a net trade income (gross income less allowable expenses and trade losses) of no more than $100,000
- Live in property with an annual value of no more than $13,000 [Solidarity Budget update: no more than $21,000]
- Do not own two or more properties
For Singaporean SEPs who are married, you and your spouse:
- Cannot own more than two properties
- Your spouse’s assessable annual income should be $70,000 or less
But… What If I Miss The SIRS Criteria Slightly?
MOM has mentioned that they will “look into appeals for those who miss the criteria slightly”.
Examples of Self-Employed Persons and Freelancers
To make it even clearer.
If we were to peg the criteria of Self-Employed Person (SEP) to the Inland Revenue Authority of Singapore (IRAS) definition, here are some examples of SEPs:
- Commission agent (e.g. insurance agent, real estate agent)
- Direct seller
- Freelancer (e.g. you receive fees for providing services as a delivery rider, consultant, bookkeeper, graphic designer)
- Hawker (you are the owner of a hawker business or a food stall)
- Owner of a business that buys and sells goods and/ or services
- Owner of online business (i.e. you buy and sell goods or provide services through the Internet)
- Owner of your own practice (e.g. accountant, architect, doctor, lawyer)
- Private tuition teacher (you look for your own students by yourself or through agencies and do not receive a salary from a tuition centre)
- Taxi driver or Private-hire car driver
If you’re wondering how IRAS considers someone as being a SEP or freelancer, here’s what the criteria look like:
|Determining Factors||More Details|
|Exposure to financial risk||You are financially liable if the obligations of the contract are not fulfilled.
You pay your hired helpers.
You may perform a substantial amount of work from your own workspace (i.e. premises that are not provided by the payer), hence you incur expenses relating to the operation of the place (e.g. rental cost and utility bills).
You incur on-going business fixed costs regardless of whether work is currently being performed or not.
You have capital investment in the business.
You can negotiate the price or unilaterally set the price for your goods or services.
You can manage expenses to maximise your net earnings.
|Payment received||You are paid a fee on a per-job basis.
You have the right to negotiate with the payer the exact amount you would be paid for.
|Level of control||You do not have anyone overseeing you.
You control your own hours of work in fulfilling the job obligations.
You can accept or refuse work from the payer.
You may not have to perform the services personally.
You are free to hire other people to do the work you have agreed to undertake at your own expense.
The payer typically has no control over whom you hire.
|Flexibility to provide the service to more than one person/business||You can provide the same services to more than one person/ business at the same time.
You advertise and maintain a visible business location. You are available to work in the relevant market.
|Provision of necessary equipment required to do your work||You are responsible for the costs of repair, insurance and maintenance to the tools, equipment and machinery.
You typically make significant investments in the tools and equipment required to do the work, and therefore retain a right over the use of the assets.
|CPF Contributions||You do not receive any protection or benefits from the payer.
You provide your own medical and insurance coverage.
You are required to contribute to your own CPF Medisave account.
You are required to pay employer's CPF contribution to your workers.
How to Apply For Self-Employed Person Income Relief Scheme (SIRS)?
If you are a SEP who is 37 years old and above (in 2020) and have already declared positive SEP income to IRAS or the CPF.
You will be automatically notified of your eligibility through SMS or letter.
[Solidarity Budget update: automatic inclusion of SEPs who also earn a small income from employment work]
What If I Want to Apply or Appeal for SIRS?
As announced during the Solidarity Budget, NTUC has agreed to step up and help administer the application and appeal for SIRS.
We’ll update again once we get more information on how you can do so!
While we understand that some of us are really concerned about our eligibility and if any of these benefits apply to us, we’ll constantly update this article as soon as we receive more information.
As for now, stay home and stay safe!