To encourage couples in Singapore to have children, Singapore government has various baby bonus schemes to help defray the cost of raising children since 2001. The current schemes available are:
For the first and second child born, there is a cash gift of $6,000 and for the third and fourth child, there is a cash gift of $8,000. This cash gift is in installments of 50%, 25% and 25% deposit within (i) three weeks of receiving completed forms, (ii) when newborn is approximately 6 months old and (iii) when newborn is approximately 12 months old.
The cash gift is available for children who are Singapore citizens born on or after 26 August 2012, whose parents are lawfully married.
From 2015 onwards, babies born this year, will get an additional $2,000 for baby bonus. Instead of $6,000, parents now get $8,000 for their first and second child, and for the third child onwards, parents will received $10,000 each.
Child Development Account
The Child Development Account (CDA) is a special savings account for children. Parents can open the account at any OCBC bank or Standard Chartered bank branch. Parents can save in the CDA until 31 December in the year the child turns 12 years of age. The government contributes to the CDA in the following month, matching dollar-for-dollar the amount saved in the CDA. The savings will be matched up to a cap depending on the child’s order of birth. For the first and second child, the maximum contribution by government is $6,000 and for the third and fourth child, the maximum contribution is $12,000 and for the fifth and subsequent child, the maximum contribution is $18,000.
The savings in the CDA may be used to pay approved expenses for your child at approved institutions that include child care centres, kindergartens, healthcare institutions, pharmacies, optical shops and purchase of MediShield or Medisave-approved private integrated plans for children.
For funds that cannot be utilised by 12 years of age, the balance in your child’s CDA will be transferred to his or her Post-Secondary Education Account (PSEA) in the year your child turns 13 years of age. You may continue to contribute to the PSEA until your child turns 18 years of age and receive the Government’s matching contributions subject to the same combined CDA/PSEA cap. The funds in the PSEA can be used to pay fees for post-secondary education in Singapore for your child and his or her siblings.
Budget 2015: CDA top-up
In this year’s Budget Statement, the Minister for Finance announced that Singaporean children aged 6 and below in 2015 will benefit from a top-up to their CDAs, which will help families pay for pre-school fees. The top-up amount is $600 for families living in homes of annual value up to S$13,000 and $300 for families living in homes of annual value above S$13,000. The CDA top-up will start from September 2015.
Medisave Grant For Newborns
All babies who are Singapore citizens born on or after 26 Aug 2012, there is a CPF Medisave account created for each newborn with a $3,000 grant given in two equal tranches. The first $1,500 will be deposited after the registration of birth, and the remaining $1,500 will be deposited in the subsequent year if the child continues to be enrolled in MediShield or a Medisave-approved Integrated Shield Plan. This grant can help parents defray the costs of their child’s MediShield premiums, as well as other healthcare expenses such as vaccinations.
From 2015 onwards, babies born this year will get an additional $1,000 credited into their Medisave grant. Instead of $3,000, each child get $4,000 grant.
Enhanced Subsidies for Centre-Based Infant Care And Child Care
Since 1 April 2013, there are subsidies for families with working mothers to help make infant and child care services more affordable for lower and middle income families. Parents with children who are Singapore citizens enrolled in licensed child care centres are eligible for a basic subsidy of up to $600 for infant care and $300 for child care. There is also an additional subsidy for families with working mothers in gross monthly household incomes of $7,500 and below. Larger families with five or more family members, including more than two dependents, can also choose to have their additional subsidy computed on a per capita income basis. Non-working mothers are eligible for a basic subsidy of up to $150 per month. All infant and child care subsidies are disbursed through the child care centres and parents need only pay the net fees after subsidy.
Enhanced Foreign Domestic Worker Levy Concession
From 1 May 2015, if you engage a foreign domestic worker to help out with your household needs, you are eligible for a concession of $205 off the monthly foreign domestic worker levy if any of the following applies:
1) Your child is a Singapore citizen, aged below 16 years staying in the same household; or
2) You or your spouse who is staying in the same household is a Singapore citizen aged 65 years or above; or
3) You have a Singapore citizen parent, parent-in-law, grandparent or grandparent-in-law aged 65 years old or above staying in the same household; or
4) You have a disability, or have family members with disabilities staying in the same household, and require a full-time caregiver’s assistance in daily activities.
The levy concession is granted on a one-on-one basis, therefore you may apply for the levy concession for up to two foreign domestic workers if there are two eligible persons in the household.
Tax Reliefs And Rebate For Parents
Parents are eligible to claim the Parenthood Tax Rebate (PTR) of $5,000 for their first child, $10,000 for the second child and $20,000 for the third and each subsequent child. Both the father and the mother may share the PTR to offset their income tax payable. Any unutilised rebate can be used to offset the income tax payable in subsequent years until the rebate is fully utilised. Parents can also claim a tax relief of $4,000 per child under the Qualifying Child Relief (QCR) or $7,500 per child under the Handicapped Child Relief (HCR).
If you are a working mother, you can claim the Working Mother’s Child Relief (WMCR) at 15% of your earned income for your first child, 20% for the second and 25% per child for all subsequent children, with a maximum cap at 100% of your earned income. The total amount of QCR/HCR and WMCR claimable for each child is capped at $50,000. If you are a working mother whose parent, parent-in-law, grandparent or grandparent-in-law is looking after any of your Singapore citizen child aged 12 years and below, you are eligible to claim the Grandparent Caregiver Relief (GCR) of $3,000.
Baby Bonus One-Stop Service
To make it more convenient for parents to join the Baby Bonus Scheme, a one-stop service is available at the birth registration counters at the hospitals and the Immigration & Checkpoints Authority (ICA). The hospitals are Gleneagles Hospital, KK Women’s and Children’s Hospital, Mount Alvernia Hospital, Mount Elizabeth Hospital, National University Hospital, Parkway East Hospital, Raffles Hospital, Singapore General Hospital and Thomson Medical Centre.
While cost is a consideration of raising a child, it is only one of many considerations and remain a very personal decision for the couple. If you are already planning for a baby, pregnant or have a new born, it is always good to take note of these schemes to help lower some of your costs!