The Wage Credit Scheme
The disparity in resource distribution has seen the world devise various methods to try and mitigate this and get something for the less fortunate. The rich, however, continue to enrich themselves and hence the slogan, ‘it takes money to make money.’ The rich have come up with a trick to do this by creating credit facilities and lending out their surplus to the poor for a cost of course. A loan is simply a debt given to a person or organization at a cost (interest) for a period. In Singapore, for instance, the government has gone ahead to come up with schemes to govern the credit offering business. Hence the introduction of the Wage Credit Scheme.
In the period between 2013 and 2015, the government of Singapore would, according to the scheme. Co-fund a forty percent (40%) wage increment for the citizens who were making less than $4000 or less as their gross monthly pay. The co-funding would, however, only benefit those who were already employed. Firms, however, need more time to adjust to these growing conditions in the wage rate and hence the period was extend to 2017. The extension would see the co-funding levels decline with the increased time.
In the term of 2016-2017, the co-funding would go down from 40% to 20%. But the condition remains for citizens making $4000 or less.
Other qualifications for the wage credit scheme included:
- should not be the owners of the business being award the funding by the government
- should be having a minimum of $50 monthly salary increase
- for three consecutive calendar months in the qualifying year, they should have worked in the company
- should be earning a maximum of $4000
- should have received CPF contributions from one employer in the prior year.
Under the following situations, an employer is not eligible for pay increase to an employee:
- If they didn’t carry out any substantive work for the employer
- Who has the power to control decision making or is an effective control over the employer
Like it is human nature to take advantage of such opportunities, the wage credit scheme has been reported to be abused by malicious employers. The government has placed strict measures and is on the lookout for companies who submit irregular and significant changes in wages or collisions between employees and employers to trick the system. Such fraudulent and wilful misrepresentations aimed at benefiting from the scheme can be use as grounds to discredit the organization from any other government project if convicted.
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