Special Employment Credit (SEC)

Summary: An initiative offering wage offsets for hiring older employees.

The Special Employment Credit (SEC), which began as a budget initiative in 2011, is a benefit conferred to employers who hire individuals between 55 and 60. Its initial goal was to boost the employment rate among older individuals. By 2012, the scope was expanded to include Persons with Disabilities (PWDs).

In 2017, the government extended this provision to three years – from 2017 to 2019. The 2016 budget included a provision for employers to be granted a wage offset for every mature employee hired, possibly earning them up to $4,000 per older Singaporean employee. In the 2019 budget, coverage of the SEC was extended again, this time until 2020.

 

How Much is the SEC?

Specifically, employers of Singaporean individuals aged 55 to 60 can receive the SEC up to 50% of the employer’s monthly CPF contributions. For Singaporean employees over age 60, the SEC goes up to 80% of the employer’s CPF contributions.

A Central Provident Fund (CPF) contribution constitutes 37% of an individual’s salary, kicking in from the onset of employment. Of this, 17% is contributed by the employer and the other 20% is by the employee.

 

How is the SEC Payout Processed?

The payout amount relies on the age and income of the mature employee, as well as the employer’s CPF contributions. SEC payouts are given twice a year and once issued, typically continue for three years. Eligible employers automatically receive the SEC in bank accounts linked to the GIRO payment of CPF contributions. Employers without an active GIRO arrangement with the CPF Board will receive their SEC by cheque.