The Singaporean Journey: Through The Lens Of The Singapore Budget
This article was produced in collaboration with the Ministry of Finance. All views expressed in this article are the independent opinion of DollarsAndSense.sg
Each year, many of us look forward to the Budget statement by Singapore’s Finance Minister. You would keenly await news on latest benefits, whether it’s grants that we qualify for, rebates that we can enjoy, or new schemes to improve our lives.
Even as we anticipate the latest announcements, consider that each year’s Budget builds on past years’ Budgets, riding on existing initiatives that benefit different groups of Singaporeans. What are some of them?
Upon the birth of a child, Singaporean parents receive a Baby Bonus Cash Gift of $8,000 (1st and 2nd child) to $10,000 (3rd and subsequent children). A MediSave Grant of $4,000 is also given to every newborn Singaporean.
Beyond that, all Singaporean children receive an initial $3,000 in their Child Development Account (CDA) under the First Step Grant announced in Budget 2016, which can be used for educational and healthcare expenses at approved institutions. For the 1st and 2nd child, the government will make a dollar-for-dollar matching whenever parents top up their child’s CDA, up to $3,000. This matching amount increases to $9,000 for the 3rd and 4th child, and $15,000 for the 5th and subsequent child.
When you add everything up, the government would be spending at least $18,000 per Singaporean child at birth. These grants are only possible because of the funds set aside at each Budget to support families in their marriage and parenthood journey.
Singapore’s education system has earned praises around the world, and we continue to invest significantly in the people. Affordable and accessible preschool education is becoming more critical, and the government has introduced various subsidies for parents to tap on.
Subsidies For Infant Care – For kids aged two months to 18 months: The government gives basic subsidies for full-day infant care regardless of income. Basic subsidies range from $150 a month (for non-working mothers) to $600 a month (for working mothers). Depending on income, families can receive additional subsidies of up to $540 a month.
Subsidies For Child Care – For kids aged above 18 months to below seven years: There are basic subsidies for full-day child care regardless of income. Basic subsidies span from $150 a month (for non-working mothers) to $300 a month (for working mothers). Families can receive additional subsidies of up to $440 a month, based on their income.
Kindergarten Fee Assistance Scheme (KiFAS) – For kids enrolled in kindergartens run by MOE or Anchor Operators: Means-tested monthly subsidies between $35 to $170 are given to students enrolled under a Ministry of Education (MOE) kindergarten or an Anchor Operator registered with the Early Childhood Development Agency (ECDA).
At the primary and secondary level, education is heavily subsidised. Annual government expenditure per student in 2018 was $12,020 and $15,518 for primary and secondary schools respectively.
Additionally, the government also makes valuable Edusave contributions. In 2019, the annual contribution per child was $230 for primary students and $290 for secondary students.
On average, every child would have received over $130,000 of education subsidies by the time they complete secondary school.
At the tertiary level, grants and subsidies continue to be available for every Singaporean to pursue their passion and educational aspirations.
Our First Home
For most of us, buying a home will be our biggest lifetime purchase. In Singapore, HDB flats spell home for over 80% of the resident population, with 90% owning their home.
To help Singaporeans afford a flat, there are available housing grants. The Enhanced CPF Housing Grant provides a grant of up to $80,000 for first-time homeowners buying new or resale HDB flats. For first-time applicants for a resale flat, they can also qualify for the Family Grant (up to $50,000) and the Proximity Housing Grant (up to $30,000). In total, first-time homeowners buying a resale flat may qualify for grants of up to $160,000.
After moving into our HDB flat, we could also find ourselves pleasantly surprised to receive two useful rebates: the GST Voucher – U-Save for utilities, and the Service & Conservancy Charges (S&CC) rebate.
As adults, we are responsible for our career decisions. But there are various forms of useful government support available for us.
Since January 2016, each Singaporean aged 25 and above would have received $500 in SkillsFuture credit, which can pay for SkillsFuture-approved courses. This encourages Singaporeans to pursue lifelong learning and continue to upskill, thus remaining relevant in the workforce. Periodic top-ups would follow.
Over the years, the government has introduced a range of support measures for workers, including the Workforce Income Supplement, Special Employment Credit, and Professional Conversion Programmes (PCPs).
For instance, at Budget 2019, the government announced the launch of new PCPs relating to blockchain, embedded software, and prefabrication to encourage Singaporeans to enter these new growth areas. The Career Support Programme was also extended for two years, to continue providing wage support for employers to hire eligible Singaporeans who are mature and retrenched, or are in long-term unemployment.
Our Golden Years
Retirement is a stage in life where we find ourselves with more time to pursue our interests. Upon retirement, the two main concerns for many retirees in Singapore would be their retirement income and healthcare expenses.
To enable seniors to retire with peace of mind, all Singaporeans will be enrolled into CPF LIFE, a lifelong annuity scheme that pays a monthly income for life from age 65. This provides us with a basic retirement income and guards against the risk that we may outlive our retirement savings.
For seniors keen to continue working, the government will raise the retirement and re-employment ages to 65 and 70 respectively by 2030, so that they can earn and save more for their retirement while staying active.
Healthcare expenses are also heavily subsidised. One notable mention would be the $5.1 billion for the Long-Term Care Support Fund that will fund subsidies for disability insurance CareShield Life and other long-term care support measures. Community Health Assist Scheme (CHAS) subsidies were also enhanced and extended to all Singaporeans with chronic conditions, regardless of income. In 2017 only, the government disbursed about $154 million in CHAS subsidies to about 650,000 Singaporeans.
To further support retirees, Singapore seniors who are part of the Pioneer Generation (born 1949 and earlier) and Merdeka Generation (born between 1950 to 1959) will receive regular MediSave top-ups, in addition to significant outpatient care and MediShield Life premium subsidies.
The Budget: Supporting Singaporeans At Every Stage In Their Lives
So, were you wondering where your tax contributions had gone? Each Budget, the outcomes of the government’s redistribution efforts become more apparent, with Singaporeans across different ages and backgrounds benefitting from different forms of spending.
Such expenditure includes investments in essential areas of our lives, such as provisions for public infrastructure and defence, plus education and healthcare facilities. There are other forms of spending more targeted at different beneficiaries. Together, all these national efforts are funded by revenue in the form of taxes, contributions from the reserves, plus other fees and charges.
In summary, it is not hard to see how the Singapore Budget goes a long way in supporting Singaporeans throughout their life journey.
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