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Activating PEP when out of a job, the 144K salary requirement et al...

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baytobeach
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Activating PEP when out of a job, the 144K salary requirement et al...

Post by baytobeach » Sun, 14 May 2023 2:48 pm

Hi all,

My situation as of now -
I recently got my PEP approved, with the IPA stating a deadline of early September (i.e. I have to use it by then else it lapses). I am on garden leave with my current employer (made redundant as part of global layoffs), with my last paycheck looming in the next few weeks, after which I will be officially "unemployed". Following termination of job, I will go on to a 90 day STVP as per my HR.

I'm actively interviewing for jobs in Singapore, but it's not a great recruiting environment, especially in my industry (non-tech, but there have been a lot of "silent mass layoffs" across many big players globally).

I've a couple of questions which I'm hoping to get some clarity on:

(1) How does the 144K minimum salary requirement work if I were to start a new job only in end 2023, and I've not been drawing a salary between June / July and then? I'll be reaching out to MOM on this, however thought I would check in with you all here as well.

I looked up past threads, came across this one (viewtopic.php?t=149862) with some helpful comments from SundayMorningStaple.

My understanding from this is that as long as I take up a job @12K per month minimum whenever I start (in say Nov 2023, so only 2 months on PEP in 2023), I would still be eligible to retain my PEP, even though the total base salary for 2023 (current employment on EP till Jun/Jul '23 + future hypothetical job on PEP starting Nov '23) may not meet the 144K minimum requirement. Is that correct?

Or would MOM expect a total comp of 4 months (Sep to Dec) * 12K = 48K regardless of when I actually start a new job? PEP start deadline in IPA is Sep 2023)


(2) Taking a step back, I am also wondering when is the best time to "activate" my PEP even if I haven't landed a job offer.

I am inclined to do so as late as possible (i.e. close to the deadline in PEP IPA), however is there any advantage to taking it up sooner, even though I may not have a firm offer in hand?

(3) There's a small voice in my head that also suggests not using up the PEP option at all if I don't secure a job offer by Sep '23.

With the dwindling job prospects and economic conditions, I have started to expand my search outside Singapore as well. This would mean that I leave Singapore by Aug / Sep, and if I were to ever get a job offer back in Singapore at a later date, I can come on EP and then utilize the PEP option if I meet the salary threshold. While I realize that the threshold goes up, it's not unheard of for senior executives in my industry, especially if I get a few more years of experience under my belt. :-k

I'd love to hear thoughts from other forum members - what have they done and / or observed others do?

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Re: Activating PEP when out of a job, the 144K salary requirement et al...

Post by smoulder » Sun, 14 May 2023 4:54 pm

https://www.mom.gov.sg/passes-and-permi ... quirements

"Requirements of the pass
To keep holding a PEP, you must:
  • Not be unemployed in Singapore for more than 6 months at any time. Otherwise, you will need to cancel the pass.

    Earn a fixed salary of at least $144,000 per calendar year, regardless of the number of months you are in employment.
"

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Re: Activating PEP when out of a job, the 144K salary requirement et al...

Post by baytobeach » Sun, 14 May 2023 10:16 pm

smoulder wrote:
Sun, 14 May 2023 4:54 pm
https://www.mom.gov.sg/passes-and-permi ... quirements

"Requirements of the pass
To keep holding a PEP, you must:
  • Not be unemployed in Singapore for more than 6 months at any time. Otherwise, you will need to cancel the pass.

    Earn a fixed salary of at least $144,000 per calendar year, regardless of the number of months you are in employment.
"
Yep, I've already seen this.

What is unclear to me was how they determine calendar year if one starts PEP midway through the year, and what does MOM then expect in terms of minimum salary.

For e.g. if someone moves to Singapore from US to start a job on their newly issued PEP in Dec of the year, then surely MOM does not expect them to get a monthly pay of 144K in Singapore to meet point #2 above!

In such a scenario, does MOM expects you to make in absolute terms 12K/month * the number of months you've been employed on PEP, or for the period from when your PEP starts (regardless of whether you find employment or not), whether than be 5 months, or 1 month.

The two points copied above are quite clear in a scenario where one has already been on PEP for a while, my question however was pertaining to a mid / late calendar year start to PEP.

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Re: Activating PEP when out of a job, the 144K salary requirement et al...

Post by smoulder » Mon, 15 May 2023 11:15 am

A calendar year is defined as the 12 months from 1st Jan to 31st Dec. You have to earn 144k in those 12 months regardless how many months you worked. So if you worked only 6 months then you have to earn 24k per month. I think it is quite clear.

Now whether the 144k can include employment income outside of Singapore, I am not sure. You should probably check with MOM if you aren't getting an answer here.

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Re: Activating PEP when out of a job, the 144K salary requirement et al...

Post by smoulder » Mon, 15 May 2023 11:18 am

Who is eligible
You can apply for a Personalised Employment Pass (PEP) if you are:
  • An overseas foreign professional and your last drawn fixed monthly salary overseas was at least $18,000. Your last drawn salary should have been within 6 months before you apply.
    An existing Employment Pass holder earning a fixed monthly salary of at least $12,000.
From 1 September 2023, the fixed monthly salary criteria for both existing EP holders and overseas foreign professionals will be raised to $22,500. This is benchmarked to the top 10% of EP holders.

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Re: Activating PEP when out of a job, the 144K salary requirement et al...

Post by x9200 » Mon, 15 May 2023 11:55 am

smoulder wrote:
Mon, 15 May 2023 11:15 am
A calendar year is defined as the 12 months from 1st Jan to 31st Dec. You have to earn 144k in those 12 months regardless how many months you worked. So if you worked only 6 months then you have to earn 24k per month. I think it is quite clear.

Now whether the 144k can include employment income outside of Singapore, I am not sure. You should probably check with MOM if you aren't getting an answer here.
TBH it's not that clear. If the annual salary (as the lump sum) should be met unconditionally why do they still need this 6 months condition? What purpose does this serve? It would make much more sense to me to see this 144k as a fixed pay base so to avoid situation that somebody earns 12k in one month and 5k in another (in other words, 12k should be fixed on annual bases). OP just call MOM and ask :-)

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Re: Activating PEP when out of a job, the 144K salary requirement et al...

Post by PNGMK » Mon, 15 May 2023 1:20 pm

I disagree. the 144k is made up as a multiple of monthly income (12k x 12mth). I would say you're ok and should activate PEP ASAP. Being on a PEP allows you to work for multiple employers freelance style I believe as well.
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Re: Activating PEP when out of a job, the 144K salary requirement et al...

Post by baytobeach » Tue, 16 May 2023 6:09 pm

Thanks all for your comments - the isn't as clear as it would seem on first read, I'll definitely have to reach out to MoM on this.

I'll post back once I get a response.

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Re: Activating PEP when out of a job, the 144K salary requirement et al...

Post by sundaymorningstaple » Wed, 17 May 2023 6:22 pm

We've been through this before several times. In the first calendar year of the PEP you need to make a minimum of (using the old amounts) $12K x the number of months from the date of your PEP to then end of that calendar. From thereon, you must make an annual income of at least $12K/month or $144K/pa. However, if you find yourself out of a job for say 3 months, you still need to make $144K for the year. e.g., lets assume you lose your job on Dec 31st and you start your new job on Apr 1st. That means for the calendar year you still need to make $144K for the calendar year or 144K/9 months or a minimum monthly salary of $16K/month.
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Re: Activating PEP when out of a job, the 144K salary requirement et al...

Post by baytobeach » Mon, 22 May 2023 9:01 am

Hi all,

FYI Here's the response I received from MoM - I think this clarifies!

"If you have held the PEP for less than a year, we will pro-rate your annual salary according to the number of months you have held the PEP."

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Re: Activating PEP when out of a job, the 144K salary requirement et al...

Post by sundaymorningstaple » Tue, 23 May 2023 7:16 pm

Did you read my post? Any of them? I've been telling people this for several years already. It's actually common sense if one but just thinks with logic and not emotion. Hasn't changed since I retired 4 years ago as the HR Mgr of a decent sized SME here (~250 employees). In fact the proration thing has been in effect since the PEP was first started (then it was for 5 years).
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

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Re: Activating PEP when out of a job, the 144K salary requirement et al...

Post by baytobeach » Fri, 26 May 2023 7:59 am

Indeed I did, sms :)

Just thought to share MoM's response verbatim for anyone else who may have the same question

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