ENHANCED SKILLS DEVELOPMENT FUND

Column: 981

ENHANCED SKILLS DEVELOPMENT FUND

4.

Mdm Ho Geok Choo asked the Minister for Manpower (a) what is the rationale for the revision in the current Enhanced Skills Development Fund (SDF) funding; (b) what are

Column: 983

the consequences, if any, arising from this revision; and (c) how best can continuous training for employability on the part of employers and employees be ensured.

Dr Ng Eng Hen: Currently, the Skills Development Fund (SDF) supports employer-based training at the rates shown in Table 1. These rates were introduced in October 2001 as an enhancement over the then-prevailing rates, and formed part of the off-budget package to help Singaporeans and businesses cope with the downturn. These enhanced rates were originally scheduled to expire on 31st October 2003 but were extended for another 11 months as the economic recovery was then still in its early stages.

_Table 1: Summary of Existing
SDF/SRP Funding Rates for Employer-Based Certifiable training _

|

Workers below 40 years old: |

Workers 40 years old and above: ---|---|---

Course Fees Support

|

90% capped at $10/hour

|

100% capped at $20/hour

Absentee Payroll

|

$6.10/hour or 100% of monthly basic salary, whichever is lower

|

$6.90/hour or 100% of monthly basic salary, whichever is lower

Course Fees Support

|

90% capped at $10/hour

|

100% capped at $20/hour

Absentee Payroll

|

Full-time and Part-time Training

$5.70/hour

In August 2004, with the recovery of the economy, WDA decided that the enhanced funding should be restored to a more sustainable level. The current enhanced funding rate of 90% of course fees subject to $10 per trainee-hour will be adjusted to the pre off-budget rates of 80% of course fees subject to $8 per trainee-hour for workers aged below 40 years.

However there is still a need to provide higher SDF funding to incentivise employers to upgrade the skills of mature workers. WDA has therefore adjusted the funding rate from 100% subject to $20 per trainee-hour to 90% of course fees subject to $16 per trainee-hour.

To allow training providers and companies more time to adjust to these changes, WDA announced the new rates in mid September 2004 but they would take effect from 1st January 2005 .

As the changes in funding are not significant, there should not be a major impact on the training incidence. WDA will monitor closely the impact of these changes.

The revised funding rates would still provide substantial support for employers to facilitate the continual training of their workers. WDA will conduct on-going reviews of the funding rates to ensure that they provide the appropriate level of incentives for employers to train their workforce. However good employers should see it in the interests of their companies and workers to support continual training of their workforce, and not train their workers only because there are high levels of funding support.