Objective of the Employment Support Scheme (ESS)
To maintain employment during the epidemic by providing time limited financial support to employers to retain their employees who will otherwise be made redundant.
Targeted Employers and Employees
All employers who have made Mandatory Provident Fund (MPF) contributions or set up Occupational Retirement Schemes (ORSO) on or before March 31, 2020 (i.e. no backdating to or before that date).
■ (1) HKSAR Government (2) Legislative Council (3) Judiciary
■ The Liaison Office of the Central People’s Government in the HKSAR, the Office of the Commissioner of the Ministry of Foreign Affairs of the People’s Republic of China in the HKSAR, the Hong Kong Garrison of the Chinese People’s Liberation Army
■ Offices of other governments and international organizations
■ Specified statutory bodies
■ Specified public organizations, government owned companies or subvented organizations
■ Fully subvented staff in government funded organizations
■ Dedicated staff working on government contracts
ESS for self-employed persons
■ Self-employed persons (SEP) who have set up an active MPF account on or before March 31, 2020 (excluding backdating) and with that account remaining opened as of March 31, 2020 will be eligible
■ Each eligible SEP will be granted a one-off subsidy of $7,500 on application
Level of subsidy for employers per month
■ 50% of actual wages at a “specified month”
■ Wage cap: $18,000 per month (i.e. max subsidy per employee per month = $9,000)
■ For MPF: “wage” refers to Relevant Income (including salary, commissions, bonuses etc.)
■ For ORSO: “wage” refers to the actual amount paid by the employer
Duration of the ESS
■ To support salary payment for 6 months in two tranches
• First tranche: June, July and August 2020
• Second tranche: September, October, November 2020
■ Not to implement redundancy during the subsidy period, and
■ To spend all the government wage subsidies on paying wages to their employees
■ Non-compliance ESS subsidy will be clawed back plus additional penalty
First tranche of ESS
■ Employers can choose either December 2019, January, February, or March 2020 as the specified month.
■ Subsidy for the June, July and August will be calculated on the basis of the wages paid in the specified month.
■ A snapshot of individual employer’s MPF contribution data for December 2019 to March 2020 was taken on May 7, 2020, which will be used for calculating wage subsidies. No changes allowed for the purpose of ESS
■ Employers may only apply for wage subsidies in respect of employees for whom default mandatory contributions (excluding surcharge) have been settled on or before 7 May
■ Eligible employers and self-employed persons may submit online applications between 25 May and 14 June 2020. Wage subsidies will be disbursed within 3-4 weeks in most cases
Compliance for the first tranche
In June, July and August 2020
■ The number of employees on payroll (i.e. with pay) cannot be smaller than the number of employees (with or without pay) in March 2020
■ All ESS received in these months should be paid to the employees
■ Otherwise, Government will claw back the amount not used for paying wages, and impose a surcharge.
Arrangement of the second tranche
■ ESS for September, October and November 2020 will be announced later
■ Subject to the experience in the first tranche and ongoing conditions of the economy
Coverage of ESS
■ About 270,000 employers who have been making MPF contributions or have set up ORSO employing 1.77 million employees, and
■ About 215,000 self-employed persons will be benefited
■ To simplify administrative work and avoid delay or omissions during application, MPF applicants shall authorize the ESS processing agent (agent) to receive MPF records from their MPF trustees and the trustees to provide the same to the agent. Upon authorization, the trustees will send the agent the MPF records to facilitate processing and calculation of the subsidy amount.
HKECIC’s Enhanced Measures to Support Exporters
Hong Kong Export Credit Insurance Corporation (HKECIC) has launched a new round of enhanced measures to support Hong Kong exporters, in particular SMEs, in view of the Covid-19 outbreak. The pandemic has disrupted supply chains and business activities, putting high pressure on an already difficult operating environment.
These enhanced measures aim to help HKECIC policyholders to reduce risk and alleviate their financial burden. It is hoped that the measures will help Hong Kong exporters to overcome this difficult time and explore export trade markets with more confidence. The new measures will be valid for one year until 31 March 2021, covering policies effective from 1 April 2020.
For holders of Small Business Policy (SBP)
• Free pre-shipment cover for approved buyers in all insured markets
• A 20% uplift in all valid credit limit(s) for all insured markets, up to a maximum of $5 million
• Extension of premium payment due date for one month
• Premium discount for each SBP holder increased from 30% to 50%
For all policyholders
• Waiver of Annual Policy Fee
• Granting across-the-board payment term of 120 days
• Waiver of additional premium for extended / new payment term
• Claims payment involving amount up to $1 million will be made within five days upon receipt of relevant documents
• Simplifying procedures and exercising flexibility in processing claims cases of payment difficulty
• Providing policyholders 10 additional free credit check facilities