Is it legal for employers to cancel AWS for the year?

Yes legal, unless part of your contract.

Noticed you used the word "cancel". Since many have commented that it is not bounded by labour law, sorry to hear that your AWS is cancelled.

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Unless this is your 1st year in this job/company & you were expecting an AWS component, then you need to re-check your contract as there are companies which provide an annual package (distributed into monthly salaries) instead of 12+1 mths' salary.

AWS is not compulsory, and there are a lot of companies that don't provide it. It's technically a bonus.

Labour law does not have requirements for employers to pay AWS. it will depend on your contract.

unless you mean employer paid but demand you to return the money? i think this is not allowed. but maybe have to confirm with MOM.