Using Assessable Income As A Criteria for GST Voucher16 Sep 2013
Date: 16 September 2013
Parliamentary Question by Ms Lee Li Lian:
To ask the Deputy Prime Minister and Minister for Finance with regard to the cash component of the GST Voucher (a) why is the Assessable Income (AI) of $24,000 used as a threshold for eligibility; (b) whether the Ministry plans to review this threshold in light of inflation and, if so, when; and (c) whether basic annual salary instead of AI can be used to determine eligibility.
Reply by DPM and Finance Minister Tharman Shanmugaratnam:
1. The GST Voucher helps lower- and middle-income Singaporeans with their costs of living. It comprises 3 components: Cash, Medisave and U-Save.
2. Of these 3 components, the GST Voucher – Cash is targeted at those who require the most help in meeting immediate needs. We have used as its eligibility criterion an Assessable Income threshold of $24,000 as this covers the bottom 40% of Singaporean workers. It also covers those who do not earn an income, such as housewives and retirees.
3. It is appropriate for a nation-wide scheme like the GST Voucher that we use Assessable Income instead of basic annual salary as a measure of how well-off a person is. Assessable Income includes other forms of income from employment such as allowances, bonuses and commissions, which can be significant sources of earnings in certain jobs. It also includes other income such as rental income. It is fair and transparent that these sources of income are counted in. If instead we use basic annual salary as Ms Lee Li Lian suggests, those who are well-off because they earn large commissions or bonuses will also benefit from the GST Voucher – Cash.
4. We therefore use Assessable Income as the criterion. The Assessable Income threshold is reviewed every year, and our reviews will take into account changes in incomes, to ensure that we continue to target those who need the most help.