Statute Details
- Title: Skills Development Levy (Prescribed Purposes) Regulations
- Act Code: SDLA1979-RG1
- Legislative Type: Subsidiary legislation (Regulations)
- Authorising Act: Skills Development Levy Act (Cap. 306), in particular sections 8(2)(d) and 23
- Citation: Skills Development Levy (Prescribed Purposes) Regulations
- Revised Edition: Revised Edition 1995 (1 April 1995)
- Original Date: 23 July 1993
- Most Recent Amendment Noted in Extract: Amended by S 463/2020 with effect from 15 June 2020
- Key Provisions: Section 1 (Citation); Section 2 (Prescribed purposes)
What Is This Legislation About?
The Skills Development Levy (Prescribed Purposes) Regulations (“the Regulations”) are subsidiary legislation made under the Skills Development Levy Act. In practical terms, they specify the limited set of purposes for which money in the Skills Development Fund may be paid out and expended. The Regulations therefore operate as a “spending framework”: they do not create the levy itself, but they control how levy proceeds may be used.
The Skills Development Levy system is designed to support workforce development in Singapore. Employers generally contribute through the levy, and the resulting fund is then used to finance training and skills upgrading initiatives. The Regulations are central to that ecosystem because they define which training-related activities and which recipient organisations qualify for grants or subsidies funded by the Skills Development Fund.
As reflected in the extract, the Regulations focus on (i) grants to companies and certain organisations for engaging consultants to assist with upgrading business operations or training programmes; (ii) grants to the National Trades Union Congress (NTUC) to support skills development activities for its members and for retrenched workers; and (iii) grants to specified community and professional organisations to support skills development and retraining efforts. The Regulations also include a specific limitation regarding “persons in employment” for one category of recipients.
What Are the Key Provisions?
Section 1 (Citation) is straightforward. It provides the short title by which the Regulations may be cited. While this is not substantive, it is relevant for legal referencing in contracts, compliance documentation, and grant applications.
Section 2 (Prescribed purposes) is the operative provision. Section 2(1) states that moneys of the Skills Development Fund may “from time to time” be paid out and expended for the purpose of the activities listed in paragraphs (a) to (c). This language is important: it indicates that the Fund’s expenditure is discretionary within the boundaries of the prescribed purposes, and it reinforces that the Fund cannot be used for purposes outside those categories.
Section 2(1)(a): Grants to companies/variable capital companies/firms and organisations for consultant engagement authorises grants to:
- any company, variable capital company, or firm wholly or substantially owned by citizens or permanent residents of Singapore; and
- any organisation (as a recipient category) for engaging any consultant.
The grants must relate to “upgrading the business operation or training programme” of the company/firm/organisation, with the object of promoting or developing the skills or expertise of persons in employment. In other words, the prescribed purpose is not general training expenditure alone; it is specifically tied to engaging consultants to assist with upgrading operations or training programmes, and the intended outcome is skills and expertise development for employed persons.
Section 2(1)(b): Grants to NTUC permits grants to the National Trades Union Congress to defray or subsidise the costs it incurs in promoting or developing the skills and expertise of its members who are persons in employment, or in retraining its retrenched members. This provision is significant because it recognises NTUC’s role as a central labour movement organisation and provides a direct funding basis for its skills development and retraining programmes.
Section 2(1)(c): Grants to specified organisations (community/professional bodies) authorises grants to a defined list of organisations to defray or subsidise the costs they incur in promoting or developing skills and expertise of persons in employment, or in retraining retrenched persons. The organisations listed are:
- Chinese Development Assistance Council (a company limited by guarantee under the Companies Act);
- Yayasan Mendaki (a company limited by guarantee under the Companies Act);
- Singapore Indian Development Association (a society under the Societies Act);
- Eurasian Association, Singapore (a society under the Societies Act);
- Association of Muslim Professionals (an institution registered as a charity under the Charities Act).
This list is closed. From a practitioner’s perspective, it means that eligibility for Fund-supported grants under paragraph (c) depends on whether the applicant is one of these named bodies (and, where relevant, whether it holds the specified legal form and registration status).
Section 2(2): Limitation on “persons in employment” for paragraph (c) adds a targeted restriction. For the purposes of Section 2(1)(c), “persons in employment” shall not include persons who volunteer their services to further the objects of any organisation referred to in that regulation. This is a compliance-critical definition. It prevents organisations under paragraph (c) from treating volunteers as “persons in employment” for the purpose of qualifying activities for Fund-supported grants. In grant administration and audit contexts, this limitation will affect how participants are classified and how programme outcomes are evidenced.
How Is This Legislation Structured?
The Regulations are brief and structured around a single substantive section. They contain:
- Section 1 (Citation): provides the short title.
- Section 2 (Prescribed purposes): sets out the categories of expenditure that are authorised for the Skills Development Fund. Section 2(1) lists the purposes in paragraphs (a) to (c), and Section 2(2) provides a definitional limitation for paragraph (c).
There are no additional parts or complex schedules in the extract provided. The legislative design is therefore “purpose-based”: the Regulations function as a gatekeeper for Fund expenditure rather than as a detailed procedural code.
Who Does This Legislation Apply To?
The Regulations apply primarily to the administration and expenditure of the Skills Development Fund. In practice, however, they affect multiple stakeholder groups because they define who may receive grants and what those grants may be used for.
For Section 2(1)(a): the relevant recipients include companies, variable capital companies, and firms wholly or substantially owned by citizens or permanent residents of Singapore, and also “any organisation” seeking grants to engage consultants for upgrading business operations or training programmes. The “wholly or substantially owned” ownership condition is a legal threshold that requires careful corporate ownership analysis (for example, determining whether the ownership is direct or indirect, and what proportion qualifies as “substantially”).
For Section 2(1)(b): the recipient is NTUC, and the scope is tied to its members who are persons in employment and its retrenched members.
For Section 2(1)(c): the recipients are limited to the named organisations listed in the Regulations, and the definition of “persons in employment” excludes volunteers. Accordingly, organisations in this category must ensure that participants are correctly classified and that programme documentation aligns with the statutory limitation.
Why Is This Legislation Important?
Although the Regulations are short, they are legally significant because they constrain the use of public funds (levy proceeds) to specified purposes. For practitioners advising employers, training providers, unions, or community organisations, the Regulations help determine whether a proposed grant application or expenditure plan is within the statutory boundaries of the Skills Development Fund.
From a compliance perspective, the prescribed purposes framework reduces the risk of misallocation of funds. If an organisation uses levy-funded resources for activities that do not fit within paragraphs (a) to (c), it may face funding ineligibility, audit findings, or repayment obligations depending on the broader administrative scheme under the Skills Development Levy Act and related grant policies.
From a transaction and structuring perspective, the Regulations influence how programmes are designed. For example, under paragraph (a), the grant is linked to engaging consultants to upgrade business operations or training programmes. This suggests that grant-funded initiatives may need to be structured around consultant engagement and documented training/skills outcomes. Under paragraph (c), the volunteer exclusion means that organisations must design participation models and eligibility criteria carefully, ensuring that “persons in employment” are not conflated with volunteers supporting the organisation’s objects.
From an enforcement and audit perspective, the closed list of organisations under paragraph (c) and the ownership condition under paragraph (a) are likely focal points. Practitioners should therefore expect that eligibility reviews will scrutinise corporate ownership, registration status, and participant classification. The 2020 amendment (S 463/2020 effective 15 June 2020) underscores that the prescribed purposes can evolve; counsel should therefore verify the current version and any amendments relevant to the client’s category.
Related Legislation
- Skills Development Levy Act (Cap. 306) — the authorising Act governing the Skills Development Levy and the Skills Development Fund
- Trade Unions Act (Cap. 333) — relevant to the registration status of trade unions such as NTUC
- Companies Act (Cap. 50) — relevant to the legal form of certain organisations listed in Section 2(1)(c)
- Societies Act (Cap. 311) — relevant to the legal form of certain organisations listed in Section 2(1)(c)
- Charities Act (Cap. 37) — relevant to the charitable registration status of the Association of Muslim Professionals
Source Documents
This article provides an overview of the Skills Development Levy (Prescribed Purposes) Regulations for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.