About $ 370 million in payments wrongly credited to businesses under the employment support program in October

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SINGAPORE: Around $ 370 million in government payments under the Employment Support Program (JSS) were wrongly credited to around 5,400 businesses in October last year, after errors in calculating disbursements .

The overpayments represent about 6% of the total amount paid under the JSS last October, the Ministry of Trade and Industry (MTI), Ministry of Finance (MOF) and Ministry of Finance (MOF) said on Thursday (April 8). Labor (MOM). ).

Explaining what happened, the ministries said the payments were calculated based on the dates when businesses reopened after the COVID-19 “breaker”, which ended in June of last year.

However, there had been “errors in compiling and processing dates for reopening businesses,” the ministries said in a press release. Businesses that received a supplement were falsely labeled as having reopened later, which qualified them for a higher payment.

About 5,400 businesses were affected, or about 3.6% of all businesses that received payments.

The businesses affected are mainly those supporting projects in the construction, marine and process and tourism sectors, the ministries said.

The government expects to recover most of the money through automatic clearings of subsequent JSS payments, as well as companies repaying overpayments, the ministries said.

READ: Budget 2021: Expansion of employment support program for worst affected sectors as part of S $ 11 billion program

The JSS was introduced in the February budget last year to help companies retain local workers by subsidizing their wages. The government subsequently expanded the program to provide more support for businesses, as most had to shut down during the breaker from April 7 to June 1.

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Authorities had said last month that around 5,500 employers would see their March 2021 payments delayed until the end of April, “pending a reconciliation” by MTI on the reopening dates of the businesses used in the payment calculation.

HOW THE ERROR OCCURRED

While most businesses were allowed to reopen in stages when the breaker ended, businesses in the construction, marine, and process and tourism industries were only able to reopen with MTI approval. .

Government agencies received more than 1.8 million requests, which were then consolidated by the MTI.

READ: Employers to receive over S $ 3 billion under employment assistance program from March 30

“With the business resumption processes to be implemented at short notice, MTI used existing systems and manual processes to grant permits to reopen businesses,” the ministries said in the press release.

“Unfortunately, in doing so, errors were made with the reopening dates and concomitantly the JSS payments and the foreign worker tax / exemption to pay,” they added.

“The error meant that these businesses were deemed to have been closed for a longer period of time, and therefore allocated a higher JSS payment.”

READ: Singapore to roll out of breaker on June 1, parent visit, places of worship allowed with restrictions

For example, a bank that could resume operations after the breaker ended was tagged with a later reopening date because it was a customer in a construction project that required approval from MTI.

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RECOVERY OF SURPLUS PAYMENTS

Of the S $ 370 million that was disbursed in error, $ 140 million will be recovered through automatic offsets from subsequent JSS payments, and $ 200 million will be recovered through “larger business engagement. affected parties contacted by MTI and other agencies to return the excess. payment, ”the ministries said.

The Singapore Tax Authority (IRAS) will first offset the excess amount with future JSS payments from companies. If future payments are insufficient to make up the amount of the overpayment, authorities will notify the relevant businesses of any excess amount remaining to be reimbursed after the final payment of the JSS of the companies, they said.

“Installment payment agreements will also be available for businesses that need them,” authorities said. No action is required from the companies concerned at this time, they added.

Companies wishing to repay the excess amount in advance can do so through IRAS. Instructions will be included in the letters to the companies concerned.

At the same time, 1,100 companies were identified as eligible for additional JSS payments, amounting to SS $ 5.5 million. The additional allocation from the JSS will be credited to businesses by the end of April 2021, the ministries said.

Due to incorrect labeling of business reopening dates, exemptions and excess rebates of foreign worker taxes amounting to around S $ 1.2 million were also granted to 360 businesses in June and July 2020. , the ministries said.

MTI and MOM said they would contact the affected companies to recover the excess waiver and discount.

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About 1,200 companies will receive S $ 6 million in waivers and additional discounts after being identified as eligible. The waiver will automatically be adjusted from the future business debit invoice, while the rebate will be credited directly to businesses.

No action is required from the affected companies at this time. MTI and MOM will notify affected companies of any follow-up action required by May of this year, the ministries said.

HOW THE ERRORS WERE DISCOVERED

According to the ministries, the IRAS first detected anomalies in November last year as part of its regular processing checks on the JSS.

Subsequently, several companies also informed IRAS that they may have received excess JSS payments.

“In December 2020, the cause of the overpayments was then attributed to discrepancies in the dates for reopening businesses,” they said.

After being informed by IRAS of the discrepancies, MTI launched a “full investigation” with other agencies.

“MTI has established that there were errors in the compilation and processing of business reopening dates, which were used for calculating JSS payments and determining business eligibility for the levy waiver and reimbursement, “authorities said.

To prevent the problem from recurring, MTI worked with MOF, MOM and IRAS to rectify processes and implement additional controls to detect and report possible errors, the ministries said.

They added that an external auditor had been hired to perform a “thorough check” to verify the reopening dates used in the calculation of JSS payments.

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