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| Half of the Self-Employed have yet to fully pay their Medisave |
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Under the Medisave for the Self-Employed scheme, self-employed persons (SEP)s with a yearly net trade income of above $6,000 are required to contribute to their Medisave accounts. This is to help them set aside part of their monthly income for the healthcare needs of themselves and their families.
Ms Lee Lee Chay, self-employed for more than 10 years, sees the benefit of contributing to Medisave. "I see it as compulsory savings for my own good. After all, the money goes to my own Medisave Account and earns 4% interest. You will never know when Medisave will come in handy. It is always good to be prepared." she said.
However, not all self-employed persons have complied with the requirement to pay Medisave contributions. As at 31 May 2004, only half of the self-employed have paid their Medisave contributions in full. Another 33% have made partial payments, while 17% have not contributed at all.
The CPF Board will be stepping up enforcement actions against those who fail to pay their Medisave contributions. Failure to pay Medisave contributions is an offence under the CPF Act and legal actions may be taken against self-employed persons who fail to pay. |
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| Facts
at a glance |
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| Total no. of self-employed persons (SEPs) who have to pay Medisave = 289,000 |
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| Ask Our Customer Service Officer |
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Q: What is the grace period for me to pay my Medisave contributions?
A: The Inland Revenue Authority of Singapore (IRAS) will assess your net trade income and issue a Notice of Computation (NOC) on the amount of Medisave you need to contribute. You have 30 days from the date of the NOC to make payment.
Q: What if I have difficulties paying my Medisave contributions in one lump sum?
A: If you have difficulties paying your Medisave contributions in one lump sum, you can apply to pay by monthly instalments. You will have to pay a certain amount first, before paying the rest by monthly instalments. |
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| A painful lesson learnt by an employer |
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When working for Company Y, an employee, Mr Yeo, asked the company not to pay his CPF contributions so that he could have a higher take-home pay of $1,200 per month. Company Y agreed to his request on compassionate grounds. Mr Yeo was subsequently laid off after 20 months. Disgruntled, he filed a complaint against Company Y a year later on non-payment of his CPF contributions.
The above is a common scenario that happens to employers who violate CPF rules by agreeing to such illegal arrangements with their employees. Once discovered by the CPF Board, the employer ends up having to repay the amount owing, which includes both the employer’s and employee’s share of CPF contributions, plus the penalty interest on the late contributions.
It would not be easy for the employer to recover the employee’s share of the CPF contributions. An employer who wants to recover the employee’s share of the CPF contributions must do so within six months from the time the last wage was paid, and prove that non-payment was not caused by his negligence.
For Company Y, it lost its right to recover Mr Yeo’s share of the CPF contributions, as more than six months had passed since it last paid wages to Mr Yeo. It ended up paying back 20 months of CPF contributions with penalty interest into Mr Yeo’s CPF account.
It was a painful and expensive lesson, and an unnecessary one too. |
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| E-submitting CPF saves time and money |
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Taka Jewellery is one happy employer who has benefited from submitting CPF contribution details electronically. Employing about 100 staff, manually submitting CPF contribution details using the Payment Advice form was tedious and time-consuming. The company made the decision to go “e” 16 months ago and has not looked back since.
"We are opening more outlets in Singapore. Submitting CPF contribution details manually for our increasing number of employees was tedious and took a lot of time," said Ms Wong from Taka Jewellery. "Switching to e-submission was the next logical thing to do."
Since April 2003, many employers have switched to the electronic modes of submission and payment of CPF contributions.
Come January 2005, employers with 11-99 employees will be charged a processing fee if they continue to submit CPF contribution details manually using the Payment Advice form. The processing fee per employee is $7 per month.
To help these employers save on the processing fee, the Board has been actively encouraging them to go 'e'. Over the past few months, the Board has conducted seminars on how to make electronic CPF submission and payment to more than 10,000 employers. The Board also provided employers with free information booklets, software and consultation services to ensure a smooth transition for the employers.
"I have no problem switching to the CPF e-submission service at all. It is convenient and saves time. Best of all, we don't have to pay a single cent for this e-service," added Ms Wong.
So, if you are still submitting CPF details manually using the Payment Advice form, go the "e"asy way now, and save on the processing fee! To find out more about e-submission, call the CPF Call Centre or email us at
Er-Con@cpf.gov.sg. You can sign up for the seminars at www.cpf.gov.sg. |
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| Revised SDF Salary Ceiling |
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To encourage employers to upgrade their employees’ skills, the Skills Development Fund (SDF) provides financial assistance to employers who send their employees for training.
With increasing demand for skills upgrading, the salary ceiling for the SDF levy has been revised from $1,500 to $1,800 since 1 July 2004. This means that the levy is payable for employees whose monthly remuneration is $1,800 or less. For more information, please visit www.wda.gov.sg. |
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| One hotline to remember |
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Whether you are a CPF member, a CPF employer or a self-employed, you can now reach us by calling one number, 1800-227 1188. You no longer need to call a different hotline for enquiries relating to employer, foreign worker levy and self-employed matters. |
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| Contact
Us |
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CPF Call Centre: 1800-227 1188 (Press 2)
Website: www.cpf.gov.sg
Email: cpfboard@cpf.gov.sg |
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