Rationale for Extending Wage Subsidies under Jobs Support Scheme as COVID-19 Measures to Company Shareholders Employed as Directors

The following question stood in the name of Mr Gan Thiam Poh –

To ask the Deputy Prime Minister and Minister for Finance what is the rationale for extending the wage subsidies under the Jobs Support Scheme to shareholders who are also employed as directors, whose companies have made CPF contributions for their salaries, and whose assessable incomes do not exceed $100,000 in the Year of Assessment 2019.

Mr Speaker, Sir, the Jobs Support Scheme (JSS) is designed to support employers to retain their local employees. As such, it previously did not cover the wages of business owners, who are both shareholders and directors of a company or shareholder-directors.

We have since received feedback from some shareholder-directors, especially from smaller companies and start-ups. Although they receive support through the JSS for their employees’ wages, their own personal wages formed a significant portion of their companies’ wage bills but were not covered by the JSS. They also did not qualify for the Self-Employed Person Income Relief Scheme.

We recognise the challenges faced by these shareholders-directors. We have therefore reviewed our policy to include their wages under the Jobs Support Scheme. By supporting them, we hope that these shareholder-directors will be able to retain their own wages and livelihoods, just as we would like them to retain their local employees.

At the same time, by setting an assessable income criterion of $100,000, we can better target the JSS support at shareholder-directors who need the support more.

We estimate that this enhancement will benefit about 50,000 shareholder-directors. The May 2020 and subsequent JSS payouts will include support for qualifying shareholder-directors. The May 2020 payout will also include back-payment for companies with qualifying shareholder-directors who were excluded from the first JSS payout in April 2020.