GST Offset Package

Budget 2007 introduces a comprehensive set of measures to help Singaporeans cope with the increase in GST. The GST Offset Package will cost $4 billion over five years and comprises the following schemes:

GST Credits

• Up to $1,000 for all Singaporeans aged 21 and above.
• Amount that a person receives will depend on his annual Assessable Income and Annual Value of his home.
• NSFs and NSmen, including those aged below 21, will get additional one-off $100 of GST Credits.
• GST Credits will benefit 2.4 million Singaporeans and cost $1.8 billion over four years.

Table 1. Structure of GST Credits

Senior Citizens' Bonus

• Up to $1,000 for all Singaporeans aged 55 and above, and who have an annual Assessable Income of $100,000 or less.
• Two-thirds of the Bonus will be given out in cash and one-third credited into the Medisave Account on 1 July of each year.
• Senior Citizens’ Bonus will benefit 671,000 senior citizens and cost $400 million over four years.

Table 2. Structure of Senior Citizens' Bonus

Top-ups to Post-Secondary Education Accounts (PSEA)

• PSEA top-ups of up to $400 per year for every Singaporean child aged seven to 20 in 2008 and 2009.
• Older children and those who are less well-off will get higher PSEA top-ups.
• Money can be spent on approved institutes and WDA accredited lead training providers.
• PSEA top-ups will benefit around 650,000 children and cost $400 million over two years.

Utilities-Save, Service and Conservancy Charges (S&CC) and Rental Rebates

• Rebates over five years for those living in HDB flats.
• Those living in smaller HDB flats will get more rebates.
• Rebates will benefit 800,000 HDB households and cost $800 million over five years.

Property Tax Rebates

• One-off property tax rebate of up to $100 per year in 2008 and 2009, for all owner-occupied residential properties.
• Property tax rebates will benefit about one million property owners and cost $200 million over two years.
• 3-room and 4-room HDB flat owners will pay little or no property tax during these two years.

Assistance for Low-Income Families with Young Children

• Enhanced subsidies for Kindergarten Financial Assistance Scheme (KiFAS) so that low-income families will enjoy an increased level of subsidy from 75% of kindergarten fees to 90%, or about $80 a month.
• Enhanced subsidies for Centre-based Financial Assistance Scheme for Childcare (CFAC), which will be increased by between $20 and $40 a month for each child.
• Enhancements to KiFAS, CFAC and other ComCare Fund programmes will cost a total of $6 million a year.

Assistance for Pensioners

• Increase Singapore Allowance by $20 per month and raise gross pension ceiling from current $1,100 to $1,150 per month, for government pensioners residing in Singapore.
• Revision of Singapore Allowance will cost $4 million a year.

Public Transport Fund

• $10 million over three years to provide lower-income households with additional help for their public transport costs.

Assistance through Citizens' Consultative Committees (CCCs), Self-Help Groups and Volunteer Welfare Organisations (VWOs)

• $10 million over five years to help needy Singaporeans through the following channels:
  

  -	$5 million top-up to the CCC ComCare Fund for the grassroots to provide flexible assistance to low-income families.
  -	$3 million for Government-funded VWO programmes.
  -	$2 million to Self-Help Groups (CDAC, Yayasan MENDAKI, SINDA and the Eurasian Association).

Additional Subsidies for Healthcare, Education and S&CC

• $12 million a year for restructured hospitals and polyclinics to absorb the additional GST on subsidised healthcare services.
• $40 million a year to absorb the GST payable on school and miscellaneous fees, as well as fees and tuition grants at ITEs, polytechnics and universities.
• $10 million a year for Town Councils to absorb additional GST payable on Service & Conservancy Charges.

Other Tax Changes that Benefit Individuals and Households

Abolition of Cess to Offset GST Increase on Tourism Sector

• Remove the broad-based Cess that applies to F&B outlets. This will cost the Government about $30 million a year.

Reduction of Road Tax for Passenger Cars and Motorcycles

• Reduce tax rate by 8% per annum. Details will be announced by the Ministry of Transport.

Reduction of Foreign Domestic Worker Levy (FDWL)

• Reduce FDWL by $30 from $295 to $265 from 1 July 2007.
• Extend FDWL Concession (reduced from $200 to $170 a month) to employers with disabled family members, or who are themselves disabled and need additional care-giving support from 1 November 2007.

Extension of Tax Relief for Cash Top-Ups to CPF Accounts by Siblings

• Extension of $7,000 tax relief for cash top-ups to CPF Retirement Accounts of siblings aged 55 and above and who earn $2,000 or less a year.

To Sign Up for GST Credits

The GST Credits will be paid annually over four years starting on 1 July 2007. In mid-May 2007, the CPF Board will be sending letters to invite all eligible Singaporeans to sign up for GST Credits. Those aged 55 and above will receive their Senior Citizens' Bonus together with their GST Credits. To receive the GST Credits on 1 July 2007, you can sign up in one of the following ways from 15 May 2007:

Members of the public can find out more about the GST Offset Package at www.gstoffset.gov.sg or by calling 1800-2222-888.

You can also refer to the Budget 2007 Household Benefits Calculator on the MOF website, www.mof.gov.sg, to find out how much you are going to receive.