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Written Answer By Mrs Josephine Teo Minister For Manpower To PQ On Amount Of Late Payment Interest Collected By Cpf Board To Date Since Inception

Employment practices

NOTICE PAPER NO. 124 OF 2020 FOR THE SITTING ON 2 NOVEMBER 2020 
QUESTION NO. 175 FOR WRITTEN ANSWER

MP: Ms Hazel Poa

To ask the Minister for Manpower what is the amount of late payment interest collected by the CPF Board (i) each year from 2009 to 2019 (ii) since inception and (iii) in 2020 to date.

Answer

  1. A late payment interest of 1.5% per month is currently charged on employers to deter them from paying CPF contributions late for their employees. The interest rate is broadly in line with other late payment penalties imposed on employers for foreign worker levy and GST. The late payment interest collected is used to cover the interest that the employees should have earned if the CPF contributions were paid on time. It is also used to partially offset the costs incurred by the CPF Board when recovering these late contributions. 

  2. If we expressed the amount of late payment interest collected as a percentage of CPF contributions, the ratio has hovered at around 0.05 to 0.06% for the past 10 years including the first half of 2020. The amount of late payment interest collected each year is published in CPF Board's annual reports.

     

  3. We understand that some employers may face difficulties making CPF contributions on time during an economic downturn. The CPF Board will extend assistance to these employers on a case by case basis.