Brief Background of SDF

When the Skills Development Levy Act or SDL act was instituted in October 1979, the Skills Development Fund or SDF was born. The SDF or Skills Development Fund System embodies the efforts of the Singaporean government to motivate all firms to invest in the development of the skills of the Singaporean workforce. Created in 1984 after the SDL act or Skills Development Act of 1979, the SDF legislation requires employers to contribute 1% of all employees earning less than 1000 SGD every month (revised to 1500 SGD in July 2000) into the SDF or Skills Development Fund.

SDF for Individuals

Eligible for SDF for self-sponsored individuals are:

• Singapore citizens and permanent residents
• Singapore citizens 40 years or older (MCES)

Singapore citizens who are 40 years or older are eligible for the Skillsfuture Mid-Career Enhanced Subsidy (MCES). Courses could be taken up by PMETs (Professionals, Managers, Executives and Technicians) or non-PMETs and the courses could be offered by SSG (Skillsfuture Singapore) – appointed CET (Continuing Education and Training) centers or directly approved by SSG and could be non-certifiable or certifiable. For certifiable courses approved by SSG, self-sponsored individuals must be at least 21 years old to be eligible for the grant.

Please click here for the table which shows the course fee funding for self-sponsored individuals.

SDF for Companies

For employers who wish to train their employees, both course fee funding and absentee payroll funding are available under the SDF. Also, employers could be SMEs or non-SMEs. Usually, SDF provides higher grants for SMEs compared to non-SMEs. So, who are eligible for SDF for companies?

• Singapore citizens and permanent residents

• Singapore citizens 40 years or older (MCES)

• Singapore citizens who are 

1. 35 years or older (13 years and above for persons with disabilities).

2. Earning a monthly income of not more than $2,300.

SMEs are also eligible for the Enhanced Training Support for SMEs funding. Singapore citizens who are 40 years or older are eligible for the Skillsfuture Mid-Career Enhanced Subsidy (MCES). For those who have disabilities or earning a monthly income of not more than $2,300, they can avail of the Workfare Skills Support (WSS).

Courses could be taken up by PMETs (Professionals, Managers, Executives and Technicians) or non-PMETs and the courses could be offered by SSG (Skillsfuture Singapore) – appointed CET (Continuing Education and Training) centers or directly approved by SSG and could be non-certifiable or certifiable. The courses might be conducted by external training providers or in-house instructors. 

Please click here for the table which shows the course fee funding for company-sponsored individuals.

Sample Calculations

Here are a few sample calculations based on the table. The basic rule is that if there are two conflicting rules of the grant, funding is always based on the lower amount.

Mid-career Enhanced Subsidy (MCES – not available for PR)

Jenny is 42 years old attending a WSQ Digital Marketing course for $800 for 16 hours or 2 days. The course is a PMET course, approved and certified directly by Skillsfuture Singapore. She is eligible for 90% of the course fees, capped at $50 per hour. She is eligible either for $800 X 90% = $720 credit or 16 hrs. X $50 = $800. Since $720 is lower than $800, she will get the lower credit based on the lower amount rule and get $720. So, she will be paying $800 - $720 = $80. However she can use $80 from her SkillsFuture Credit so she won’t pay anything at all.

Singaporeans & PR (21 years old & above)

David is 28 years old attending a WSQ Digital Marketing course for $800 for 16 hours or 2 days. The course is a PMET course, approved and certified by SkillsFuture Singapore (SSG) where he is eligible for 50% of the course fees, capped at $15 per hour. So he is either eligible for $800 x 50%  =  $400 or 16 hours x $15 = $240. Based on the lower amount rule, he will get the latter, which is $240. The course fee after the funding is $800 - $240 = $560. However, he can use his $500 SkillsFuture Credit and would only need to pay $60 for the course.

Enhanced Training Support for SMEs (ETSS – for SG company with employees not more than 200 or annual sales not more than $100m)

Belinda is 35 years old, attending a WSQ Digital Marketing course for $800 for 16 hours or 2 days. The course is a PMET course, approved and certified by SkillsFuture Singapore where she is eligible for up to 90% of the course fees capped at $50 per hour. This means she is eligible either for $800 x 90% = $720 or 16 hours x $50 = $800. According to the lower amount rule, she will get the $720 credit and her course fee is $800 - $720 = $80. With her absentee payroll funding, she will not pay anything.

Enhanced Training Support for Non-SMEs (SG reg company with employees more than 200 or annual sales more than $100m)

John is 48 years old, attending a WSQ Digital Marketing course for $800 for 16 hours or 2 days. The course is a PMET course, approved and certified by SkillsFuture Singapore where he is eligible for up to 90% funding of the course fees capped at $50/hour based on MCES. This means he is eligible for either $800 x 90% = $720 or 16 hours X $50 = $800. Based on the lower amount rule, he is eligible for $720 of the course fees. The course fee after funding is $800 - $720 = $80.  He has Absentee Payroll funding available so he can pay off the rest of the fees with this grant. 

Final Word on SDF 

The CPF Board collects a certain amount of money from employers on behalf of the Singapore Workforce Development Agency. The money collected is then directed into the SDF. Employers need to contribute the levy for all employees up to the first $4,500 of gross monthly remuneration at a levy rate of 0.25%, subject to a minimum of $2, whichever is higher. Employees could be full-time, part-time, casual, temporary or foreign workers giving out services partially or wholly in Singapore. Before, self-sponsored individuals were not qualified for the SDF. Only company-sponsored individuals could avail of the SDF. However, with the WSQ scheme, self-sponsored individuals are now given a bracket of their own. 

The employees can recoup 80% of their contribution by requesting training grants for development of skills. The training grants are designed so that firms giving training for skills that are in demand, or have training plans which encompass over 50% of the workforce, are granted higher amounts while companies that go on to use low-skilled workers in low cost operations are given penalties. 

The SDF offers assistance as incentive to companies to conduct training programs for employees. Incentives are provided based on a cost-sharing principle and the training has to be relevant to Singapore’s economic development. The amount of incentives that a company can have is not connected to the levy contribution of the company. 

According to a Straits Times article published in February 16, 2019, WSQ trainees found to have better pay than their peers who did not undergo the training. Those who achieved full WSQ qualifications earned an average of 5.8 percent more wages than others who did not take up WSQ courses following the year after training. Those who completed WSQ trainings were also 3.5 percent and 2.6 percent more likely to be employed respectively within a year. In 2018, an estimated 465,000 Singaporeans and 12,000 enterprises benefitted from training subsidies. The training participation rate has increased frome 32.5 percent in 2013 to 48 percent in 2018, according to the Ministry of Manpower Labor Force survey.