Rule Change for Dependant Pass Holders in Singapore

There are over 25,000 Australian expats that call Singapore home, who’ve decided to leave Australia in search of new business opportunities, to advance their careers, or simply to experience something new in the gateway to Asia. Many Australians will enter Singapore on a work visa known as an Employment Pass (EP), while many ‘trailing spouses’ will accompany them on a Dependant Pass (DP), which requires the couple to be married.

Until recently, those trailing spouses on a Dependant Pass (DP) were able to seek employment with a Letter of Consent (LoC), which could be applied for by their employment from the Ministry of Manpower. Unfortunately, based on a recent announcement, this will all change from 1 May 2021. As part of the key measures to support jobs for Singapore citizens, the Government has announced that those who are currently working on an LoC would need to instead apply for either an Employment Pass (EP) or S Pass (SP), if they wished to keep working in Singapore.

This change will impact many Australian expat families and couples who call Singapore home, as this could have a significant impact on both the financial and emotional well-being of many. Many spouses will be working on an LoC as a relief teacher, in a part-time administrative role, or even running a small hobby business such as baking at home.

What are the current rules?

Under the current framework, those who are living in Singapore on a DP or those on a Long-Term Visitor Pass, which are for the spouse of unmarried children of Singapore citizens or Permanent Residents (PRs), can have their employer apply for an LoC to allow them to work for the company. Importantly, this position would not form part of the Foreign Worker Quota, nor would it attract any Foreign Worker levies, which has been a common criticism amongst the locals in Singapore who felt that this did not create a level playing field.

What are the options going forward?

For those Australian expats who are currently working in Singapore on an LoC, they may continue to do so until it expires, and will then need to make a decision about what they do next. The options will be as follows:

1. Apply for an S Pass (SP) or Employment Pass (EP)
2. If you are running your own business, you may continue to do so on a Letter of Consent providing that you meet the following requirements:
   1. The DP holder is a sole proprietor, partner or director and owns at least 30% of the company.
   2. The business hires at least one Singaporean citizen or Permanent Resident on a salary of at least S$1,400 per month and they receive CPF contributions for a minimum of 3 months.
3. For those that don’t meet this criteria, you can apply for an extension of the Letter of Consent until 30 April 2022.
4. Cease all work and employment in Singapore.

While it may sound like a simple solution to just apply for an SP or EP, there are some strict requirements, with relatively high minimum required salaries, making it unattainable for many households. The requirements for each are outlined below:

Employment Pass

• Salary of at least S$4,500 per month, or higher for those in financial services;
• Be in a managerial, executive or specialised job;
• Have relevant qualifications, such as a degree, that is related to the field of employment;
• It’s important to note here that the required minimum salary does tend to increase for older applicants, and is often reported as at least S$9,000 for those over the age of 40.

S Pass

• Salary of at least S$2,500 per month with a higher requirement for older applicants.
• Have a relevant degree or diploma related to the field of employment.
• Have relevant work experience to the position being offered.

We know that as a result of this change, there will be many Australian expats who decide to either relocate elsewhere or repatriate to Australia and settle back into life at home. Given the significant changes, it’s important to ensure that you seek professional advice and ensure that you’re financially prepared for the move home or elsewhere.

Ally Wealth Management is the trusted ally in finance for Australians at home and across the globe. As both Australian expats and residents, the founders of Ally have a unique understanding of the common personal financial challenges faced.

Book your complimentary appointment with our team at Ally Wealth Management to discuss how we can help you to achieve your financial goals.

Ally Wealth Management Pty Ltd is a Corporate Authorised Representative of Sentry Advice Pty Ltd ABN 77 103 642 888. Sentry Advice holds an Australian Financial Services Licence (AFSL) No. 227 748.

General Advice Warning: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances.