Extension of the Enabling Employment Credit: Solidifying Employment Opportunities for PwDs

Ingrid Oo and Bernice Wan
Jun 24
9 min read

In this Explainer, find out…

What is the Enabling Employment Credit (EEC)?
Why was the EEC implemented?
Has the EEC been effective in encouraging employers to hire persons with disabilities?

Introduction

The Government predominantly classifies Persons with Disabilities (PwDs) as individuals with physical and intellectual disabilities, and hearing impairment. Prime Minister (PM) Lawrence Wong reiterated his commitment to supporting PwDs in his speech at the 10th Anniversary of the Enabling Village (an integrated community space for PwDs). He asserted that support systems for PwDs should continuously improve and adapt to the PwDs’ changing needs.

In the current era of global uncertainty, Singapore continues to strive for economic resilience for all social groups, including PwDs. To achieve this, the Government implemented the Enabling Employment Credit (EEC) in 2021 to encourage the employment of PwDs. This Policy Explainer seeks to explain the EEC’s key mechanisms and its role in the Government’s plans to establish a more inclusive society. It also discusses the scheme’s structural trade-offs and policy design from a comparative perspective.

What is the EEC?

Under the Enabling Masterplan 2030 (EMP2030), the Government aims to raise the employment rate of PwDs aged 15 to 64 to 40 per cent by 2030. However, data from 2024 to 2025 revealed that only around 34 per cent of PwDs were employed. This leaves a six per cent gap from the Government’s employment target.

To bridge this gap, the Government implemented the EEC to encourage employers to hire PwDs who have been unemployed for at least half a year. It acts as a fiscal policy that subsidises the hiring of PwDs and does not act in silo, as it is complemented by non-fiscal policies. One such policy is the Enabling Mark, which recognises employers who are committed to creating inclusive and accommodating workplaces for PwDs.

The EEC will be available to employers who hire PwDs aged 13 years old and above who earn less than S$4000 per month. Under the EEC:

Employers receive a payout per eligible PwD employee. This payout will be 20 per cent of the PwD’s wage, which allows employers to benefit from a wage offset. This wage offset is capped at S$400 monthly per employee. There is no cap on the total number of eligible employees.

For the first nine months, employers also receive an additional 20 per cent time-limited wage offset, similarly capped at S$400 a month per employee.

Employers hiring a PwD who has been out of work for the past six months receive an additional 10 per cent offset, capped at S$200 a month per employee for six months.

Furthermore, to reduce paperwork and processing time, employers are not required to apply for the EEC by themselves. Instead, the Inland Revenue Authority of Singapore (IRAS) will directly identify employers who are eligible for the EEC. Eligibility will be determined based on their CPF contributions made for employees who are PwDs.

Why was the EEC implemented?

The EEC’s Predecessor

Prior to the EEC, the Special Employment Credit (SEC) was established in 2011. It first served as a wage subsidy to incentivise employers to hire employees between 55 and 60 years old. Later, its scope was expanded to offer more support to PwDs, especially younger PwDs. Under the SEC:

Employers hiring PwDs under 67 years old can receive a subsidy that covers up to 16 per cent of the employee’s monthly income.

Employers hiring PwDs over 67 years old can receive a subsidy that covers up to 22 per cent of the employee’s monthly income.

The SEC was replaced by the EEC when it expired in December 2020. The EEC provided more support for younger PwDs, as it offered the same amount of wage subsidies regardless of age. It also provided additional incentives for employers to hire PwDs who have been unemployed for a long time.

Employers without experience in hiring PwDs may find it risky to do so for the first time, as they may be unsure about the potential outcomes. To address this concern, the EEC provides wage subsidies for the first nine months, offering financial relief. Employers could use the money saved to install physical aids that improve accessibility. They could also establish workplace sensitivity training to promote smoother social integration.

PwDs who have been unemployed for extended periods may also be perceived as less reliable, which can make employers more hesitant to hire them. Hence, providing additional support can reduce employers’ reluctance and increase their willingness to hire them.

Why Is Inclusive Employment Important?

In recent years, the Government has placed greater emphasis on inclusive employment as part of its wider efforts to support PwDs. Alongside financial assistance schemes, the Government has increasingly focused on empowering PwDs, enabling them to better support themselves. However, in the long term, the Government must also address other pressing priorities such as an aging population. At the same time, it must maintain sufficient national reserves. Hence, promoting greater self-reliance among PwDs could reduce their long-term dependence on financial assistance.

Furthermore, unemployed PwDs may depend heavily on their caregivers for financial support and daily guidance. Over time, this can place both financial and emotional strain on caregivers, a burden that is further intensified as they age. This is due to rising healthcare costs and diminishing savings, which increases the need for Government intervention. In this context, the Government views policies such as the EEC as a way of reducing long-term social and financial pressures. By encouraging PwDs to participate more actively in the workforce, such policies can help them achieve greater financial stability. This, in turn, reduces their long-term reliance on Government support.

Why Was the EEC Extended?

As part of Budget 2025’s theme of “Onward Together for a Better Tomorrow”, the EEC was extended until December 2028. The extension aims to continue supporting the employment of PwDs by providing them with more employment opportunities. This helps to increase their participation within the workforce. Furthermore, the EEC helps to advance the second strategic theme under the EMP2030: “Enabling Persons with Disabilities to Live Independently”. More specifically, it targets the fourth focal area of inclusive employment.

Can the EEC achieve its intended outcomes?

Despite incentives put in place to encourage PwD employment, only 7,000 companies had hired PwDs in 2022. This figure signals that there is still a gap to be filled to meet the Government’s target of 10,000 inclusive employers by 2030. Furthermore, this inclusion remains quite limited in practice: close to 4 in 5 of these companies hire just one PwD. This suggests that most employers still treat inclusive hiring as a one-off effort rather than a consistent and sustained practice.

Through its consultations, a task force on promoting employment opportunities found that many employers were hesitant to hire PwDs. The main reason was a lack of information about the benefits of doing so. For example, some employers believe that PwDs are less productive than able-bodied workers. In addition, some employers may lack the resources needed to create a more inclusive workplace, such as the provision of assistive tools like wheelchair ramps. They may also lack experience in implementing workplace practices that support inclusion, such as conducting social integration training for their staff. The EEC responds to these concerns by encouraging employers to hire PwDs. The cost savings that arise from the wage subsidies can then be used to support the gradual development of more inclusive workplace practices.

Trade-offs and Structural Limitations

That said, there can be some trade-offs and structural limitations to the EEC.

Artificial Wage Ceiling

First, the EEC may create an artificial wage ceiling. An artificial wage ceiling is a limit on the amount of income an individual can earn. The EEC’s income cap of S$4000 may unintentionally create an artificial wage ceiling for some PwDs. Employers may choose not to increase their wages beyond this threshold to retain the subsidies provided by the Government. Alternatively, as one commentator put it, “[t]he danger of having this [S$4,000 cap] condition in place…is that some employers may only consider hiring a disabled person to fill a lower-paid position but not a higher-paid one”. As a result, the income progression of PwDs may be limited. Over time, this can increase their susceptibility to rising costs of living as their purchasing power is being reduced.

Inability to Address Workplace Discrimination

Additionally, the scheme alone does not remove the potential workplace discrimination that these employees could face. A 2022 study from the Association of Women for Action and Research (AWARE) found that PwDs faced 28 per cent more discrimination than the average Singaporean. Colleagues and managers may not perceive PwDs as professionals and hence discriminate against them. Some examples of workplace discrimination are social isolation, bullying and being passed over for job promotions. While the EEC offers financial incentives to hire PwDs, it may not directly address the problem of workplace discrimination. It also may not encourage other employees to treat PwDs as professional equals.

To be sure, the EEC is not the only policy targeted at improving employment outcomes for PwDs. Therefore, while appreciating the limitations of the EEC, it is also important to view it in light of the wider ecosystem of policies which have been put in place to support PwDs.

Comparing the EEC with Denmark’s Fleksjob

In the context of the PwD job market, a demand-side policy seeks to influence the behaviour and decisions of employers by encouraging them to hire PwDs. This induces an increase in demand for labour from employees with disabilities. Meanwhile, a supply-side policy is meant to reduce the barriers to entry for PwDs, thereby incentivising more of them to enter the job market.

The EEC is a demand-side policy that provides financial incentives to encourage employers to hire PwDs. In comparison, Fleksjob is a supply-side policy in Denmark that directly targets individuals with reduced work capacity. It supports those who are unable to perform at the same level as the average worker due to extenuating circumstances such as physical and mental disabilities. Fleksjob incentivises these individuals, including PwDs, to enter the job market.

This Danish model pays workers in tiers according to their working abilities and capacities. These abilities are comprehensively assessed by local governing bodies and professionals such as medical staff and social workers.

There are three main differences between Singapore’s EEC and Denmark’s Fleksjob, namely:

Working hours of PwDs;

Administrative demands; and

End goals.

Working Hours of PwDs

Fleksjob allows for workers who are unable to work full-time to be employed with reduced hours or adjusted work duties. This formal provision of alternative work arrangements is not promoted under Singapore’s EEC. Though steps have been taken by the Singapore Government to promote flexible work arrangements, such arrangements are still uncommon. This could limit employment opportunities for PwDs in Singapore, even if employers are willing to hire them.

Administrative Demands

Although both policies aim to increase employment for PwDs employees, both have different forms of administrative demands. The EEC requires fewer bureaucratic processes to recognise eligibility. Employers are directly identified by IRAS according to their CPF contributions for employees with disabilities.

In contrast, Fleksjob requires more administrative oversight. Each individual applying for the scheme requires comprehensive screening and follow-up to update their eligibility status. The difference in the extent of administrative tracking could be due to the differing focuses of the two policies. The EEC is meant to broadly target firms while Fleksjob is meant to adapt to each unique individual.

End Goals

The end goal for both policies also differ. Fleksjob is an ongoing policy that aims to keep individuals with reduced working capacity employed in adapted arrangements. The intention is to reduce their dependence on welfare. It is also framed as a temporary measure to help individuals transition to permanent employment wherever possible.

Contrastingly, the structure of the EEC potentially disincentivises the employment of PwDs at the same pay rates as non-disabled individuals. Like Fleksjob, the EEC does provide extra incentives for employers to hire PwDs without jobs. However, raising wages above S$4,000 may result in employers losing Government financial support. As a result, PwDs may remain as beneficiaries of this scheme in the long term rather than transitioning out of it, as some individuals do from Fleksjob. In the long run, this may place a larger fiscal burden on the Government, as the Government may need to permanently subsidise the salaries of PwDs. It may also not chime well with the reality that “more disabled people are obtaining degrees and striving for professionals, managers and executive roles”.

Conclusion

The EEC represents the efforts taken to build an inclusive economy. By evolving from past employment policies such as the SEC, the EEC provides firms with targeted financial assistance to hire more PwDs.

However, the EEC may have some structural shortcomings. The artificial wage ceiling placed on PwDs could impede their career progression. Also, as the EEC is a fiscal policy, it does not remove the social barriers to workplace integration, such as workplace discrimination. When compared to Denmark’s Fleksjob, it is clear that while the EEC has streamlined efficiency with fewer bureaucratic processes, it may lack individualisation. Fleksjob, in comparison, provides grassroots support that eventually reduces workers’ long-term dependence on subsidies.

Ultimately, employers play an important role in fostering productive and inclusive workplace cultures for their employees. This can enable greater long-term employment opportunities. As PM Wong also said in his speech at the 10th Anniversary of the Enabling Village, “We can all take heart in the progress made. But we still have work to do.” Moving forward, policies to increase employment of PwDs must also look beyond increasing their headcount in the workforce. By holistically promoting social integration within the workplace, the long-term professional development of PwDs can be well supported.

This Policy Explainer was written by members of MAJU. MAJU is a ground-up, fully youth-led organisation dedicated to empowering Singaporean youths in policy discourse and co-creation.

By promoting constructive dialogue and serving as a bridge between youths and the Government, we hope to drive the keMAJUan (progress!) of Singapore.