Singapore government admits to overpaying wage relief by S$370M

A general view of Singapore’s financial business district is seen from Marina Bay in Singapore on July 12, 2019. (Photo by Roslan RAHMAN / AFP)
A general view of Singapore’s financial business district is seen from Marina Bay in Singapore on July 12, 2019. (Photo by Roslan RAHMAN / AFP)

Singapore’s government has just admitted to a massive data error that resulted in nearly S$400 million (about US$300 million) worth of COVID-19 financial aid being paid out to companies by mistake. 

An excess of about S$370 million in wage subsidies, as well as about S$1.2 million in foreign worker levy waivers and rebates were mistakenly paid out to upward of 5,000 companies due to miscalculated business reopening dates following last year’s “circuit breaker” lockdown. 

The government said it is now seeking the return of the money from those companies, which were mainly in the construction, marine, and manufacturing sectors. 

“Government agencies received and reviewed more than 1.8 million applications from businesses to resume their operations. These were then consolidated by MTI,” a joint statement by the trade, finance, manpower ministries said. 

It went on to blame short notice and manual processes used to grant approval for businesses to reopen. 

“Unfortunately, in so doing, mistakes were made with the reopening dates and concomitantly the JSS payouts and FWL waiver/rebates payable,” it continued.

The amount of financial aid each company received depended on the length of time it had to shut down, which means that those that had to close for longer would receive more money. But after a mix-up between the start date of projects and the reopening of all companies, some firms ended up being recorded as having shut down for longer and received more wage subsidies as a result. 

A total of 5,400 companies received more wage subsidies than they should in October, and 360 businesses received more waivers or rebates in June and July. 

The issue was raised by several companies as well as the Inland Revenue Authority before the Ministry of Trade and Industry launched a formal investigation. The government will work to claim all the money by offsetting S$140 million in upcoming payments under its Job Support Scheme wage subsidy program. 

MTI said that some companies have promised to return the extra money paid to them – about S$200 million worth. Another S$30 million was paid to over 1,000 companies the government plans to reach out to. Losses through the excess foreign worker levy waivers and rebates between June and July will be claimed through the companies’ future bills. 

The government said it was also engaging an external auditor to look into the matter and help fix its processes. 

The Job Support Scheme was launched last February to help companies retain local workers amid the pandemic. The government said that it had committed over S$25 billion to the scheme, which has been extended through September to support aviation and other industries.

The Manpower Ministry announced in April that it had committed S$675 million to foreign worker levy rebates. 

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