The Inland Revenue Authority of Singapore (IRAS) has reminded all employers to ensure they've made the correct mandatory CPF contributions for their employees, for the months of February, March, and April 2020.
Employers are also to ensure the amount of mandatory CPF contributions made in the subsequent months are accurate, in order to receive the right amounts of Jobs Support Scheme (JSS) payouts in July.
The IRAS said it is aware of possible abuse by employers in order to obtain higher JSS payouts, citing them as "dishonest" and "unfair to the employees, other employers and society at large."
Employers who are found to be abusing the JSS payouts could face severe penalties and be charged under Section 420 of the Penal Code. They may also face up to 10 years of imprisonment and a fine.
Some unacceptable practices called out by IRAS include:
- Making purported mandatory CPF contributions for non-genuine employees;
- Continuing purported mandatory CPF contributions for employees who have been retrenched or put on no-pay leave;
- Maintaining purported mandatory CPF contribution amounts based on past wages for employees who have suffered wage cuts;
- Increasing purported mandatory CPF contributions for employees without any actual wage increase;
- Inflating purported mandatory CPF contributions and deducting these excess contributions from employees’ wages in cash; and
- Artificially splitting the wages of employees across multiple related business entities to overcome the salary limit for the JSS payout.
More details on these can be found here.
"(The) IRAS takes a very serious view on any attempt to abuse the JSS. To detect possible abuses, IRAS has instituted a robust anti-gaming framework leveraging data from multiple sources to identify risks. It has also established a dedicated team to prevent and detect abuses."
As part of this framework, it may write in to employers requesting them to conduct self-reviews, and to provide declarations or documents to substantiate their eligibility for JSS payouts.
These payouts will be made only after the employers have submitted their declarations, and once the IRAS has verified.
How employers can report their past mistakes and malpractices in CPF contributions
- Employers who would like to declare their incorrect mandatory CPF contributions for February, March, April, and the subsequent months this year may do so here.
- Employers must do this before 30 June 2020, and the JSS payouts will be made after rectifications to CPF contributions have been processed.
- They will also need to rectify the errors via the CPF Online Application service portal; no actions will be taken if the disclosure is accurate and complete.
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