What will happens if employer failed to pay CPF Contribution?
The Central Provident Fund Board usually known as either CPF Board or simply CPF Contribution is a compulsory comprehensive savings and pension plan for working Singaporeans and permanent residents primarily to fund their retirement, healthcare, and housing needs in Singapore. The CPF Contribution rate is an employment-based savings scheme with the help of employers and employees contributing a mandated amount to the fund for their benefits.
The CPF Contribution is a key pillar of Singapore’s social security system, and serves to meet our retirement, housing and healthcare needs.The government also helps to supplement the CPF savings of lower wage workers through schemes such as Workfare and top-ups to MediSave for senior citizens.
Withdrawal age | 55 years – when you can start withdrawing your CPF contribution savings. |
Payout eligibility age | 65 years (for those born after 1953) – when you start receiving monthly payouts from your CPF savings. |
CPF Basic Retirement Sum | $88,000 for members who turn 55 in 2019. If you own a property and choose to pledge it or have a sufficient CPF property charge on your property, you will be able to withdraw your CPF contribution savings in excess of your CPF Basic Retirement Sum. |
CPF Basic Healthcare Sum (from 1 Jan 2016) | $57,200 from 1 January 2019. The Basic Healthcare Sum (BHS) is designed to be enough for your basic, subsidised healthcare needs in old age. Amounts above the BHS will flow to your Special or Retirement Accounts to boost your monthly payouts. Your cohort’s BHS will be fixed when you turn 65 years old, and this amount will not change for the rest of your life. You will not be required to top up your MediSave Account if you do not meet your cohort Basic Healthcare Sum. |
Employer refuses or late Payment for Employee CPF Contribution
Board’s computerised system detects defaulting employers and lists them out each month for follow-up action by Investigation Officers. A notice is sent by registered post to employers informing them that legal action will be taken unless CPF contributions, interest and composition amount are paid within the notice period.
CPF contribution rate are due at the end of each month and must be paid by 14th of the following month with the following exception: If the 14th falls on Saturday, Sunday or Public Holiday, CPF contributions must be paid immediately on the next working day
Penalties Charges due to late or non payment of CPF Contribution
It is a criminal offence under the CPF Act for late and/ non-payment of CPF contribution rate. The composition offer is to encourage defaulting employers to pay the CPF contribution rate and to settle the late payment offence out of court. Legal action will be taken against employers who do not settle the CPF arrears and compound the offence out of court, before the deadline given.
Penalties if employers do not comply with the CPF Contribution Act.
- Late payment interest charged at 18% per annum (1.5% per month)
- Composition amount of up to $1000 per offence
- Up to $5000 court fine and no less than $1000 per offence and/or up to 6 month’s imprisonment for 1st conviction
- Up to $10,000 court fine and no less than $2000 per offence and/or up to 12 month’s imprisonment for subsequent convictions
What will happens in court due to failed in Cpf Contribution Payment?
- Employers who fail to pay by the stipulated date will be issued with a Notice to attend Court. Such notices carry a criminal penalty and must be taken seriously.
- Representatives attending court on behalf of their company will have to bring an authorisation letter signed by a director of the company
- When a final adjustment is granted, the employers are given a last opportunity to pay the CPF contribution arrears in full. Should they still fail to pay the final adjourned court date, no further adjournments will be granted. Upon entering a plea of guilt, the employers will be convicted with a fine and/or jail term. Failure to pay the fine may also result in imprisonment. A court order will be made against the employers to pay the entire amount owned to the Board.
- A discharge is granted when employers have settled all notices. Once granted, they are not required to return to the court.
- A warrant of arrest may be issued against the employers if they fail to attend court without a valid. Alternatively, the court may proceed to hear the summons without them being present.
