(Estimated reading time: 12 minutes)
Dear Learnable Tutors,
In the Resilience Budget, DPM Heng Swee Keat announced the Self-Employed Person Income Relief Scheme (SIRS), where eligible Self-Employed Persons (SEPs) will receive quarterly cash payouts of $3,000 each in May, July, and October 2020 (source), for a total of $9,000.
Do I qualify for SIRS?
The Ministry of Manpower (MOM) announced that Singaporean SEPs who meet all the following criteria are eligible for SIRS. On 6 April, DPM Heng Swee Keat announced updated criteria for the SIRS.
The SEP must:
- Have started work as an SEP on or before 25 March 2020;
- Not also earn income as an employee;
- Earn a Net Trade Income of no more than $100,000;
- Live in a property with an Annual Value of no more than $21,000 (To check the AV of your residence, please log in to myTax Portal using your SingPass/IRAS PIN > Messages > Correspondence & Notices > Property Tax > Letters/Notices); and
- Not own two or more properties.
- Those who besides self-employment, have a regular part-time work that pay a small salary of not more than $2,300 per month.
Married SEPs must adhere to the following criteria in addition to those above:
- The individual and spouse together do not own two or more properties; and
- The Assessable Income of the SEP’s spouse does not exceed $70,000.
We understand that many are uncertain about whether earning income as a freelance contractor for a company (e.g. as a freelance teacher who is paid an amount each class they teach, and who earns employer CPF on this amount) disqualifies them from SIRS, especially since their incomes have been affected due to MOH’s suspension of all centre-based tuition and enrichment classes.
Generally, you are employed or an employee if you perform work under a contract of service where you work under the control of your employer.
You are self-employed when you perform work for others (e.g. provide a service) under a contract for service. According to CPF, self-employed persons providing their services under a contract for service are not entitled to CPF contributions (link).
If you are receiving employer CPF contributions from your employer, it is likely that you are working under a contract of service. It is important that you check your contract, and consult the company you work with on this contract to determine where you fall under.
How do I qualify for SIRS?
As of 29 March, MOM has not released the procedure by which an SEP can apply for SIRS.
However, it is good for you to be aware of which other SEPs have automatically qualified for payouts under SIRS, so that you may prepare your application ahead of time.
In its press release, MOM announced that “Singaporean SEPs aged 37 and over in 2020 who declared positive SEP income to the Inland Revenue Authority of Singapore (IRAS) / CPF Board (CPFB) for Work Year 2018 do not need to apply for SIRS. They will be informed of their eligibility via letter and SMS, and receive the first SIRS payout automatically in May 2020” (emphasis ours).
Prior to MOM announcing more details on how to apply for SIRS, it is prudent to prepare documentation to prove that you meet all the above criteria for SIRS. This can be done by filing your annual tax return.
Given that the tax filing deadline for Work Year 2019 is 18 April 2020, tutors may wish to take some time to:
- Tidy up their records and accounts, so that your income earned and business expenses claimed in 2019 can be readily determined. These include invoices, receipts and other supporting documents (link).
- Prepare a simple Statement of Accounts (template within)
- Prepare a 4-line (or 2-line if revenue for the year is <$100,000) statement to report your business income. More details here.
- e-file your income tax (see how). Remember: All self-employed persons must report the income earned from their business operations as business income, and not as salary.
If you have not been issued with an income tax return filing package by IRAS for the year, you can declare your actual income by using Form IRAS 144 at any CPF Service Centre, SingPost branches or online using your SingPass.
Considering the depressed economic climate, and the hefty ($9,000) relief that the Government is providing under the Self-Employed Person Income Relief Scheme, it is prudent for all eligible tutors to provide evidence to the Government that demonstrates their qualification for the relief. If you earn an average monthly income of $2,300 and below, and have made all necessary MediSave contributions, you also qualify for a Workfare Income Supplement. See this article for more details on the other forms of Government support that tutors can avail themselves of.
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Together, we will get through this.
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