Another new S$1.5 billion support package is introduced to counter inflated living costs and alleviate vulnerable households and businesses in Singapore. Here's what you need to know.
On Tuesday (21 June 2022), Deputy Prime Minister and Minister for Finance Lawrence Wong released a press statement announcing a new S$1.5 billion support package to assist the lower-income and vulnerable demographics in Singapore following sharper global inflation.
This support package comes at a time when “major structural changes [are occurring] in our operating environment” along with other pressing concerns regarding climate change, global warming, heightened geopolitical tensions and conflicts. All of which are somewhat pressuring humanity towards a “more bifurcated and decoupled world”, elaborated Mr Wong.
In lieu of these considerations, he was prompted to introduce a new S$1.5 billion support package dedicated to providing immediate alleviation for over 1.5 million Singaporeans. No doubt, this supplementary assistance here is music to Singaporeans’ ears on top of the measures announced in Budget 2022.
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What to Expect For This S$1.5 Billion Support Package 2022
|S$1.5 Billion Support Package Overview|
|For Households and Individuals||For Businesses and Self-Employed Workers|
|Additional GST Voucher – Up to S$300 Cash (Special Payment)||Up to 70% support given under an Energy Efficient Grant|
|S$100 Household Utilities Credit||Extension of Jobs Growth Incentive until March 2023|
|Permanent enhancements to Short-, Medium-, and Long-Term Assistance Schemes under Comcare||S$150 one-off relief for eligible taxi main hirers and private-hirers|
|Increased allowance and monthly pension ceiling for eligible elderly||Boosted NTUC Freelancers and Self-Employed Unit (U FSE) Relief Scheme|
|More government co-funding given for Progressive Wage Credit Scheme (PWCS)|
|Increased maximum loan quota for both Enterprise Financing Scheme — Trade Loan and Enterprise Financing Scheme — SME Working Capital Loan|
For households and individuals
On top of the existing Goods & Services Cash Voucher (GSTV) of up to S$400 previously announced in Budget 2022, there will be an additional GSTV – Cash Special Payment* of up to S$300 to be issued out in August 2022.
This additional voucher will provide targeted relief to 1.5 million vulnerable members of the population, consisting of households from middle-income, lower-income and retirees without income.
We can also rejoice over the fact that every Singaporean household will receive S$100 Household Utilities Credit each to combat rising utility bills. This is stipulated for disbursement by September 2022.
The social support scheme ComCare will be permanently enhanced for its recipients under the Short-, Medium-, and Long-Term Assistance schemes. For instance, a one-person household with Long-Term Assistance is entitled to S$640 per month, up from the original S$600 initially.
Apart from social support benefits, elderly folks will also stand to benefit from the increased allowance and monthly pension ceiling. This will apply to those drawing lower pensions. Both the allowance and monthly pension ceiling will be increased by S$30 each, bringing each of the new values to S$350 and S$1,280 respectively.
*Eligibility criteria for GSTV - Cash Special Payment is as follows:
(i) Singaporean aged 21 and above in 2022; (ii) Assessable Income (AI) for Year of Assessment (YA) 2021 not more than $34,000; (iii) Annual Value (AV) of home (as indicated on NRIC) not more than $21,000; and (iv) does not own more than one property.
For businesses and self-employed workers
There is much to gain for our local SMEs under this new support package too.
Up to 70% support will be given under a new Energy Efficient Grant being rolled out. It mainly targets businesses in the food service, food manufacturing and retail sectors. This support will largely come in the form of assimilating to more energy-efficient equipment and mitigating rising business costs.
Moreover, the Jobs Growth Incentive will be extended by six months until March 2023 to afford greater assistance to hired or self-employed workers relying on vehicles or affected by the chicken export ban in their livelihoods.
For example, one month of foreign worker levy waiver will be issued to Singapore’s 11 chicken slaughterhouses.
Speaking of self-employed workers, the government will also disburse a S$150 one-off relief for eligible taxi main hirers and private-hire drivers in August 2022.
To further that, NTUC Freelancers and Self-Employed Unit (U FSE) Relief Scheme will receive a boost too. Association members* who are combi-bus, limousine, delivery drivers and delivery motorcycle riders stand to enjoy up to S$300 cash under the programme. Do note the benefit isn’t automatic and application is required.
Other than that, the government also vows to allocate more support to lower-wage workers under the Progressive Wage Credit Scheme (PWCS). Support for wage increases will be delivered across two tiers:
- Government will co-fund 75% of eligible wage increases (up from 50%) for employees earning a gross monthly income of up to S$2,500.
- Government will co-fund 45% of eligible wage increases (up from 30%) for employees earning a gross monthly income between S$2,500 to S$3,000.
Not to mention, the Enterprise Financing Scheme – Trade Loan will be enhanced to raise the maximum loan quantum from S$5 million to S$10 million between 1 July to 31 March 2023. During this period, the government will continually provide 70% risk-share to the scheme.
Similarly, the maximum loan quantum for the Enterprise Financing Scheme – SME Working Capital Loan will also be ramped up from S$300,000 to S$500,000 between 1 October to 31 March 2023. This will commence after the current Temporary Bridging Loan Programme expires in September.
*This refers to members of the National Private Hire Vehicles Association and the National Delivery Champions Association.
What else can you do?
Don’t stop saving or investing
The best way to maximise the benefits reaped from this support package is to ensure your savings are properly accounted for. Meaning to say, you should possess at least six months’ worth of salary stored in your emergency fund to withdraw anytime.
If you’ve been diligent up till this point, good job! We recommend investing any leftover funds with a robo-advisor or setting up an online brokerage account to not let your cash sit idly. After all, inflation will erode your savings away if left untouched.
You work hard for your money, but let your money work smarter for you in return.
Earn rebates wherever possible
Asides from that, continue to earn rewards and cash rebates whenever you can. Your cashback credit card will come in extra handy here! While reducing variable expenses like entertainment, shopping, music or show-streaming platforms can help minimise daily costs, some expenditures are unavoidable.
For example, your groceries, utility bills, transportation costs, and mortgage payments are all necessary expenses. This is why tagging on an effective cashback credit card catering to your needs and lifestyle can double up as a smart money-saving tool (against inflation especially)!
You also don’t have to be affluent or well-off to afford a cashback credit card. There are plenty of options available for lower-income households in Singapore.
Practising good credit card habits will also go a long way.
A silver lining behind a looming dark cloud
Although talks about recession right now are frightening, we shouldn’t be panicking. Despite valid concerns of “stimulus inciting more inflationary pressures”, this support package was carefully curated to both curb and not “spark more inflation”, assured Lawrence Wong.
Indeed, the lower-income members of society are already intrinsically marginalised. Slap on inflation and a recession, and they’re even more disproportionately affected. As the vulnerable strata of society, this fiscal policy is specifically geared towards bearing the brunt of financial discrimination faced by those in need within our population.
While we can’t avoid or escape economic troubles, we can stand stronger as a nation to support one another through these tough times.
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