Singapore Budget 2025: new measures to enhance recruitment and workforce resilience

Employment law expert Mayumi Soh at Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, shared her insights after Lawrence Wong, Singapore’s prime minister and minister for finance, delivered his government’s Budget statement in parliament.

“The measures outlined in the Singapore Budget 2025 highlight the government’s strong commitment to enhancing employment opportunities and fostering an inclusive workplace for all Singaporeans,” Soh said. “Employers should ensure that they familiarise themselves with the new regulations and consider utilising the wage subsidies and support schemes to manage their operational costs.”

Initiatives aimed at driving recruitment of older workers and ex-offenders, as well as the upskilling of existing employees, were among those announced by Wong in his speech.

For example, Wong confirmed that the Senior Employment Credit (SEC) scheme will be extended by one year, until the end of 2026. The SEC provides wage offsets for employers who hire Singaporeans aged 60 and above, where they earn less than S$4,000 (US$2,990) a month. The qualifying age for the highest SEC wage support tier will be increased from 68 to 69 years old, in line with the increase in re-employment age to 69 years old. The government will reimburse employers up to 7% of the wages that they pay workers aged 69 and above as part of the SEC scheme.

Wong added that the Tripartite Workgroup on Senior Employment will be convened later this year to undertake “a holistic and longer-term review of senior employment policies, to improve the employability of seniors, and increase the availability of jobs that better suit their needs”.

Another measure, the Uplifting Employment Credit scheme, which is designed to encourage employers to hire ex-offenders, has also been extended until the end of 2028. The scheme provides a wage offset to employers hiring ex-offenders and, according to Wong, was made use of by almost 700 employers last year, resulting in more than 1,500 ex-offenders being hired.

Wong further confirmed that the Enabling Employment Credit scheme, which enables employers to offset wages for persons with disabilities earning less than S$4,000(US$2,990) a month, has been extended to the end of 2028.

To boost retirement savings, Wong announced that the Central Provident Fund (CPF) contribution rates for employees aged 55 to 65 will increase by 1.5% from 1 January 2026. The increase in CPF contribution rates was made in line with the recommendations of the Tripartite Workgroup on Older Workers, formed in May 2018.

The government has also introduced measures to build workforce resilience and encourage lifelong learning. Lower-wage workers aged 30 or over will be able to benefit from “longer-form” training, Wong said, as part of an enhancement of the existing Workfare Skills Support scheme. The current scheme already offers “absentee payroll support” for employers, but Wong noted that it was “designed primarily to support short courses that are completed over a few days”.

As part of the SkillsFuture Level-Up Programme, from March 2025, Singaporeans will be able to apply for a training allowance of up to S$3,000 (US$2,242) per month to participate in certain full-time courses. The allowance can be claimed for up to 24 months.

From early next year, Singaporeans aged 40 and above who wish to upskill while continuing to work will also be eligible for a fixed allowance of S$300 (US$224) per month, “to defray their learning expenses”, Wong said.

A new grant titled the ‘SkillsFuture Workforce Development Grant’ was also announced by Wong to help employers alleviate “short-term cost pressures” when undergoing business and workforce transformation. The grant will “provide higher funding support of up to 70% for job redesign activities”, Wong said.

The SkillsFuture Enterprise Credit will also be redesigned to support employers with the cost of upskilling employees during restructuring processes.

“The revamped credit will operate more like an online wallet,” Wong said. “Companies can easily check how much they have. And they can use the credits to immediately offset out-of-pocket costs for eligible workforce transformation initiatives and courses, rather than do so on a reimbursement basis.”

“All companies with at least three resident employees will get a fresh S$10,000 (US$7,475) in the redesigned SkillsFuture enterprise credit. The new credit will be available in the second half of 2026 and will last for three years. Meanwhile, companies can continue to use the existing credit. It was originally due to expire in June this year, but we will extend it until the new credit is ready,” he added.