Financial & Legal Literacy

While SEPs and freelancers may not receive a regular income or have Central Provident Fund (CPF) contributions from employers, income declaration and MediSave contributions are still important. This is because such records of regular income declaration will be required e.g, when taking a bank loan to buy a house or apply for credit cards.

MediSave

To ensure sufficient savings for healthcare needs especially during retirement years, it is important for SEPs and freelancers to contribute regularly to MediSave.

CPF Board refers to “self-employed net income” as Net Trade Income (NTI). For individuals who earn an annual NTI of more than $6,000 (current as of 2019) from freelance work, you will need to contribute to MediSave. For more information on MediSave, click here.

Contribute-As-You-Earn (CAYE) Scheme

Since 1 January 2020, the Government has taken the lead to pilot the CAYE scheme, which encourages SEPs to save for their healthcare needs through small and regular contributions as and when SEPs earn a service payment. Government agencies that buy services directly from SEPs are required under the CPF Act to deduct the MediSave contribution from the service fee and transmit it to the SEP’s MediSave account. The amount of CAYE contribution to be deducted from the service fee would depend on the SEP’s CAYE contribution rate, age, and estimated NTI. For more information on CAYE, click here.

Other CPF accounts

It is not compulsory for SEPs to contribute monthly to their CPF Ordinary and Special/Retirement Accounts, other than MediSave contribution mentioned above. However, it is prudent to consider making voluntary contributions beyond MediSave. For more information, click here.

For individuals doing paid freelance work full-time or part-time, you are said to be a SEP receiving income from trade, business, vocation or profession. This is true whether you are self-employed without a registered entity or a sole proprietor or a partner with a registered entity. The income earned from freelance work will need to be declared to the Inland Revenue Authority of Singapore (IRAS). IRAS allows deductions such as for business expenses (subject to qualifying conditions), with only self-employed net income subjected to tax.

IRAS has created a detailed presentation to guide SEPs through the filing of taxes, along with a video which can be viewed here. For more information on filing taxes, please click here.

Other useful related websites and pages include:

• Central Provident Fund Board (CPFB)
• IRAS
• Institute for Financial Literacy
  

Insurance is also a form of risk management that may help protect against income loss. Without subsidised or sponsored healthcare benefits, the responsibility of the business assets and liabilities may fall on the individual. Each one of us will have unique needs and an understanding of the value of insurance, so there is no one “optimal” amount of insurance to purchase.

The type of insurance SEPs and freelancers require will differ and here are some influencing factors to consider:

• The type of work you do;
• The type of assets you have e.g., art-making equipment of significant value and crucial to the creation of your work;
• The potential liability you may owe to a third party e.g., for property or borrowed assets.

In general, insurance undertaken is to protect assets or minimise liabilities. It will be best to seek advice from a professional insurer to ensure the scope and pay-out of coverage meets your needs. Also, read the fine print and ask questions of your insurer. For example:

1. What does this insurance plan not cover?
2. If I incur my loss overseas does this plan still cover me?
3. How are claims done?
4. What documents do I need to support my claims?
5. When can I get my claims after I submit all necessary documents?
6. Give me real-life cases where a person could not or did not get his/her claim.

Regardless of your age and career type, the common denominator of risk faced is the reality of falling sick and needing time to rest, which translates to the stopping of income. There are specific paid medical leave insurance plans designed to protect SEPs and freelancers from income loss due to illness or injury. With these plans, signing up as early as possible would be advisable.

Currently, there are two insurance plans on the market that are specifically aimed at supporting SEPs and freelancers to continue to be paid if you are unable to work for an extended period due to illness or injury. While they have a similar intent, you might prefer one to the other, depending on your unique needs and preferences for premium payment.

• Freelancer Earnings Protection (FLEP) Insurance Plan by Gigacover

Freelancer Earnings Protection (FLEP) is a flexible insurance plan for freelancers that can be bought weekly, monthly or yearly. You can change or stop coverage anytime without penalties. More on this insurance plan can be found here (https://gigacover.com/sg/freelancer-earnings-protection/).

• Prolonged Medical Insurance Plan by NTUC Income

This is a health insurance plan that helps to relieve you financially if you are hospitalised or on hospitalisation or medical leave for a prolonged period as a result of illness or injury sustained during the period of your insurance coverage. This is a yearly renewable policy. More on this insurance plan can be found here (https://www.income.com.sg/group-insurance-for-employees/prolonged-medical-leave-insurance).

Other useful related resources include Chapter 5 on insurance from the Advocates for the Arts – A Legal Handbook for the Creative Industries developed by Pro Bono Singapore.

Every organisation needs to procure or purchase products and services. The objective of a Procurement Policy, which is a set of principles and procedures, is to ensure all purchases are authorised at the respective approval limits, and that the purchases accomplish the organisation's goals. Hence, each organisation will have its own unique Procurement Policy, where the larger the organisation is, the more complex its Policy.

As part of the procurement process, you will be asked to give a Quotation. A Quotation is how organisations determine who best to appoint, whether on the basis of price, quality or scope. This is an essential part of the pitch and is often a compulsory internal procedure for the organisation wanting your service.

When asked to give a Quotation, please include:

1. Your scope of work or the description of the service you are offering or the item you are selling or renting to the organisation;
2. The fee or price you are hoping to receive; and
3. Any terms and conditions you may want from the organisation.

Please see a sample of a Quotation here to refer to and adapt for your use.

A Purchase Order or PO is a document that an organisation will give the vendor, after it has gotten approval to purchase the required service. This is an external document that will stipulate what is being purchased, at what price, and on what terms. Instead of accepting a PO, the vendor can choose to issue an Order Form for the purchaser to accept, with all the Terms and Conditions pre-printed on the Order Form. The PO or Order Form will form a binding agreement when accepted by the vendor.

As an arts freelancer, it is unlikely that you will be issued a PO unless you are selling or renting out an art-making equipment for example. You will also not need to create an Order Form because you can ask your hirer to acknowledge on your Quotation with a signature and company stamp as acceptance of the work or item to be delivered. It is important to ensure that all the Terms and Conditions are stated on the signed Quotation.

If an organisation is interested in hiring your skills and services as a freelancer on contract basis, your binding contract is more likely to be a Letter of Agreement (LOA) rather than a PO, which spells out the salient contract terms between your hirer and you. The LOA should include the following points:

1. The scope of work to be delivered;
2. The period you are given to complete this scope of work;
3. The fee given to you for this work;
4. Other expenses either the hirer or you will need to bear; and
5. Payment details- that is, how and when you expect to be paid.

Please see samples of a Letter of Agreement and a Performance Agreement to compare against any Agreement you receive.

After delivering your project or service, you will often be required to issue an Invoice before you can be paid by the organisation. An Invoice is a payment demand for goods or services delivered, or for instalments due, based on contract terms. The organisation will match your Invoice to what was in your agreed contract, which could be your signed Quotation or your Letter of Agreement.

Before payment, the organisation will also assess the following:

1. Did you deliver as agreed, only partially, or not at all?
2. If it is a physical good like an artwork that you have delivered, was it in agreed condition?
3. Was the delivery received and acknowledged by the organisation?

If all is in order, the organisation will then be able to process payment to you.

Please see a sample of an Invoice without Tax and an Invoice with Tax to refer to and adapt for your use.

Note:

Invoice without Tax is used if:

1. You are an independent arts practitioner with no company backing,
2. You have a registered arts business entity that does not need to be GST registered*

Invoice with Tax is used if:

1. Your arts business entity is GST registered* i.e., with a unique GST registration number

*GST registration is compulsory only if your arts business entity has taxable income exceeding SGD1 million.

A Timesheet is a record of hours you spent working on a project. If you are an hourly or daily rated arts freelancer, there should be a Timesheet given to you by your hirer that you will need to fill in dutifully. It is then acknowledged by your hirer with his/her signature and your signature together. This document serves as proof of work done, and can be used by your hirer to process payment, without the need for you to raise an Invoice. In addition, documentation of your work progress via email correspondences, mobile messages exchanged, etc. with your hirer can all serve as proof of work done.

Please see a sample of a Timesheet Sample to refer to and adapt for your use.

It is good practice to keep a Timesheet even if your contract stipulates a fixed fee, that is, you are paid the same amount regardless of working hours per week. Filling up a Timesheet diligently allows you to see the actual number of hours you have spent on a project, and serves as a valuable benchmark for your next project Quotation.

Please see a sample of a Timesheet for Personal Tracking purposes to refer to and adapt for your use.

In summary, your hirer having received your Invoice or Timesheet will:

1. Match it against the agreed contract; and
2. Verify you have indeed delivered as agreed upon, before making any payment to you.

Often, there will be a time-gap between your Invoice or Timesheet submission and the payment into your bank account, known as the credit term. Usual business-to-business credit term is 30 days or 1 month. As an individual, you may want to negotiate a shorter credit term of 14 days.

Arts SEPs and freelancers are independent contractors providing a service to the hirer at your own risk and will not be protected by the Employment Act nor enjoy benefits like employer CPF contribution, work injury compensation, medical and dental subsidies or paid annual leave. Furthermore, SEPs and freelancers are not protected from liabilities which may arise and may have to pay the hirer for damages caused. Thus, having a written contract is especially important to be legally protected at the very least against unpaid fees.

It is best to document agreed on terms and conditions between you and your hirer through a written contract, to avoid disputes later. Before a contract is enforceable, you must be clear of the following:

1. Your hirer has offered the project to you with agreed and clearly stated terms;
2. You have accepted the agreed and clearly stated terms in writing; and
3. There is a clear intention from both parties to create this legal relation.

The signing of a contract typically involves the handwritten signatures of you and your hirer. However, the Electronic Transactions Act (Cap.88, 2011 Rev.Ed. Sing.) allows for electronic records to be used in expressing and accepting an offer to form a binding contract. Arts SEPs and freelancers must be careful with off-hand responses to job offers or terms within the job offer discussed via email or messaging platforms such as WhatsApp and Telegram, as the offer may be a valid offer and your response may be taken as a binding and enforceable written agreement.

The Singapore Drama Educators Association (SDEA) has developed The Arts Freelancer’s Playbook: SDEA’s Guide to Understanding Contracts for drama educators and freelancers in general, to address the growing desire among the community to better understand contracts.

The term ‘boilerplate clauses’ refers to relatively standard clauses which tend to be agreed upon between you and your hirer with little or no negotiation.

Exclusion of Liability or Limitation of Liability

This is a clause in your contract that excludes or limits your hirer’s liability for anything from breach of contract to negligence. Hence, always negotiate for a fair limit to your liability before signing on the dotted line. That said, in Singapore, the Unfair Contract Terms Act (Cap.396, 1994 Rev.Ed. Sing.) also acts as a safeguard to protect persons in a weaker bargaining position.

Dispute Resolution/Recourse

This is by far the most important clause to have in any contract as it stipulates how any dispute that may arise between you and your hirer will be resolved. Mediation is usually the least expensive and the least time-consuming amongst the various forms of dispute resolution.

Force Majeure

This clause protects both you and your hirer against a failure to perform or fulfil contractual obligations arising from unforeseeable circumstances beyond the control of either of you, such as natural disasters, like an earthquake or flood. This clause may also include how your fees or compensation will be handled in such cases.

Governing Law

A governing law clause specifies which laws will govern the interpretation and enforcement of the terms of your contract. The choice of law usually reflects the country where you or your hirer is situated in or where the subject matter of the contract is situated.

It is recommended that you and your hirer first use negotiation or mediation with an aim to achieve an amicable resolution to the dispute, should it happen. If you and your hirer are unable to resolve this amicably, you may wish to turn to the Dispute Resolution/Recourse clause in your written contract.

Primarily, there are three types of dispute resolution – Mediation, Arbitration, and Litigation.

Other useful related websites and pages include Pro Bono Singapore’s arbitration and mediation pages, Singapore International Arbitration Centre as well as Singapore Mediation Centre.

If you breach your contract, and depending on the seriousness of your breach, you may suffer termination by your hirer, a demand for damages, or worse, being sued and taken to court. If you breach your contract because of reasonable causes, e.g., discovering you have a critical illness, then there might be room for negotiation with your hirer. However, if negotiations fail between you and your hirer, seek third party assistance, e.g., through the use of mediation services.

If your hirer breaches the contract e.g., failing to pay you on time or failing to pay you the agreed amount, exercise the Dispute Resolution/Recourse clause in your written contract. Generally, the recourse available to you includes:

• termination of contract;
• claiming for damages;
• specific performance of an act (which is usually a term stated in the contract) e.g., to return all copyrighted materials to you;
• injunction requiring a party to do or cease to do an action.

Samples

• Sample contract clauses developed by Mr Ng Joo Khin of Morgan Lewis Stamford LLC.
• For a sample of other forms of written contract e.g., Letter of Agreement or Performance Agreement, click here.
• For a sample of the Dispute Resolution/Recourse clause, click here. This was extracted from Advocates for the Arts – A Legal Handbook for the Creative Industries developed by Pro Bono Singapore.

For collaborations, the work is considered a work of joint authorship where each joint owner holds an undivided interest in the piece of work. This means you or your fellow collaborators cannot grant a license under the copyright without the consent of every party involved in the creation of this joint work.

In a collective work, each author creating his or her own piece of work holds the copyright to his or her individual work. For example, a collection of short stories by different authors will represent a collective work. Therefore, each author would have individual copyright over the respective short story written by him or her.

The general rule is that an author, creator, or artist of a piece of work is the first owner of any copyright. However, subject to a legal contract agreed between the arts practitioner and the commissioner, the copyright in certain* commissioned works like portraits, photographs or engravings may belong to the commissioner of those works rather than the arts practitioner. However, the work should be used for the purposes envisioned in the commissioning arrangement. The artist or creator retains the right to stop the commissioner or any persons or companies from using the work contrary to its original purpose.

*For other types of commissioned works, the ownership belongs to the commissioned party unless both parties (the commissioner and the commissioned party) agree otherwise.

Copyright provides creators with legal rights over their creative works for a specified time period. Once that period of time is over, the creative work is free to be “utilised” by the public. This period of protection varies according to the type of copyright work you own:

• Literary, dramatic, musical and artistic works receive copyright protection for 70 years from the end of the year in which the author died. If the work is published after the death of the author, it will last 70 years from the end of the year in which the work was first published.
• Published editions (i.e. the style, arrangement and appearance of the letters, numbers and symbols) of literary, dramatic, musical and artistic works maintain copyright for 25 years from the end of the year in which the edition was first published.
• Sound recordings and films receive copyright protection for 70 years from the end of the year in which the sound recording or film was first published.
• Broadcasts and cable programmes receive copyright protection for 50 years from the end of the first year of making the broadcast or cable programme.
• Performances maintain copyright protection for 70 years from the end of the year of the first performance.

Your copyright is infringed when someone uses or makes a copy of your copyright work without first obtaining your permission. You can take legal action against this person, or as a preferred first step, negotiate and mediate through a neutral third party to resolve your copyright dispute.

In brief, here are a few remedies:

• You can seek action to stop the infringing action;
• You can claim for damages for the loss suffered; or
• You can claim the profits gained by the infringing party.

However, as IP protection is territorial, this means that IP protected in Singapore does not enjoy the same recognition or protection overseas.

If you wish to get some preliminary advice on available remedies or enforcement actions, you can speak with external legal consultants at the IPOS IP Legal Clinic. You can make an appointment here.

If you are intending to use part of a copyrighted work, you will need to contact the copyright owner for consent and to negotiate for a license to utilise the copyrighted material. Alternatively, a license may be obtained through a legally authorised collective management organisation, e.g. the Composers and Authors Society of Singapore (COMPASS), Recording Industry Performance Singapore Pte Ltd, Motion Picture Licensing Company Singapore Pte Ltd, to list a few.

If you are using material found on Creative Commons (CC), there is no further need to seek explicit permission from the copyright owner, as long as the use conforms to the terms under which the license was obtained.

Creative Commons is a not-for-profit organisation that provides licenses and tools to permit copyright owners to determine the terms under which their material may be used worldwide. It gives everyone from individual creators to large companies and institutions a simple, standardised way to grant copyright permission to their creative work. You are able to use these materials without the need to seek further permission so long as the use conforms to the terms under which the licenses were obtained.

Copyleft, distinguished from copyright, is the practice of offering people the right to freely use a created work, or distribute copies or modify it (in other words, create a derivative work), with the stipulation that the same rights that govern the original work apply to the derivative works.

Before you copy or use any material online, always check if the website has Terms and Conditions governing the use of content, which tend to be found at the bottom of the Homepage. If so, you might need to write to the website owner for permission before you use the content. For software content, the terms of the license are typically contained within the headers of the code itself, and you should make sure you understand the license terms before integrating that piece of software into your own codebase.

The ARH, together with legal consultant Professor David Tan, has a useful list of Copyright 101 and Copyright FAQs for quick and easy reference of copyright terms. Other useful related resources include an Event Licensing Guide introducing the different types of permits and licenses required when organising an arts event, under the existing licensing framework.