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New Package Of Measures To Support Parenthood

25 Aug 2004

The Chairman of the Steering Group on Population and Minister for Trade and Industry, Mr Lim Hng Kiang, announced today a comprehensive new package of measures to support parenthood. Going well beyond financial incentives, the new package takes a holistic and coherent approach to help couples have and raise children.

2. The Steering Group on Population, comprising Mr Lim, Dr Yaacob Ibrahim, Minister for the Environment & Water Resources, and then-Minister for Community Development & Sports; Dr Ng Eng Hen, Minister for Manpower; Mrs Lim Hwee Hua, Minister of State for Finance and Transport; and Dr Amy Khor, Mayor, South-West CDC, had been tasked to recommend specific proposals to address the problem of declining birth rates in Singapore.

Overview of the Package

3. Mr Lim highlighted three key features of the new package. First, the new measures address not only cost issues but a broader set of concerns preventing Singaporeans from having larger families. The measures seek to give parents the opportunity to spend more time with their children, pursue a range of childcare options, and strike a better balance between work and family life. Second, the new measures have fewer conditions than previous measures, making them more accessible to Singaporeans. Mr Lim cited as an example the removal of mother's age and educational qualifications as qualifying criteria for the revised tax measures. Third, the new measures provide greater flexibility in supporting the variety of choices that parents make because of their differing circumstances. For example, there will now be support for a wider range of childcare arrangements.

4. "We have taken the approach of asking what we can do to help Singaporeans at each stage or aspect of their journey as parents", said Mr Lim. The new package of measures can be grouped under five broad categories, each addressing a specific aspect of parenthood.

Promoting Marriage

5. HDB Top-up Grant for Singles who Marry. Currently, qualifying singles may receive a CPF housing grant of $11,000 to buy a resale flat. Singles who have obtained this grant, and who marry on or after 1 Aug 2004, will now receive a Top-Up Grant to the prevailing CPF family housing grant. Based on the prevailing family grant quantum, a couple can receive a top-up of up to $29,0001. The top-up can be used to offset the mortgage loan of the existing resale flat or for the purchase of another resale flat.

Making Child Birth More Affordable

6. Use of Medisave for 4th and Higher Order Births and Pre-Delivery Expenses. Currently, Singaporeans can use their Medisave to pay for the delivery expenses for their first three children. They will now be able to use Medisave to pay for pre-delivery medical expenses (e.g. ultrasound scans) in addition to delivery expenses, for all their children2. These measures will apply to parents of babies born on or after 1 Aug 2004.

7. Use of Medisave for Assisted Conception Procedures. Couples who face difficulty conceiving will be able to use more from their Medisave accounts to pay for Assisted Conception Procedures (ACP), such as In-Vitro Fertilisation. Couples who start their ACP treatment cycles on or after 1 Aug 2004 will benefit from this change.

Providing Financial Support for Raising Children

8. Enhanced Baby Bonus. Currently, the Baby Bonus is given only for the second and third child, with the cash paid out over 6 years. The Baby Bonus will now be extended to the first and fourth child, and the cash paid out over 2 years. Parents of Singapore Citizen babies born on or after 1 Aug 2004 will enjoy a Baby Bonus of $3,000 cash if the baby is their first child, up to $9,000 cash and matching contributions if the baby is their second child, and up to $18,000 cash and matching contributions if the baby is a third or fourth child. The accelerated disbursement of the cash component over 2 years will give parents more immediate support, as costs are generally higher when the child is younger. The matching contributions can be used readily to defray expenses such as infant care, childcare and kindergarten expenses for all children in the family.

9. Parenthood Tax Rebate and Working Mothers' Child Relief. Parents of Singaporean children will also benefit from enhanced income tax benefits. The new Parenthood Tax Rebate - without age requirements or qualifying claim periods - will provide tax rebates of $10,000 to $20,000, depending on the birth order of the child. The new Working Mothers' Child Relief - without qualifying educational criteria - will provide working mothers a tax relief of 5% to 25% of their earned income, depending on the number of children they have. These tax measures will apply to parents of Singapore Citizen babies born on or after 1 Jan 2004 (for Year of Assessment 2005).

Enhancing Child Care Options

10. Longer Maternity Leave. Working mothers of Singapore Citizen babies will now have a total of 12 weeks paid Maternity Leave, compared to the previous 8 weeks. The additional 4 weeks' leave may be taken any time within 6 months from birth. Employers will continue to pay for 8 weeks of maternity leave taken for the first and second child, while the Government will pay for the additional 4 weeks for the first and second child, and the entire 12 weeks for the third and fourth child, subject to a cap of $10,000 per 4 weeks. The extension in maternity leave will be legislated on 1 Oct 2004. For mothers of Singaporean babies born during the period 1 Aug 2004 to 30 Sep 2004, the Government will also pay the extended maternity leave if it is given by their employers, subject to a cap of $10,000 per 4 weeks.

11. New Childcare Leave. Working parents with any child below 7 years of age, will be eligible for 2 days of employer-paid Childcare Leave per year, from 1 Oct 2004.

12. Infant Care Subsidy. Parents of Singapore Citizen infants, aged 2 to 18 months and attending licensed infant or child care centres, will receive an infant-care subsidy of up to $400 per month, from 1 Aug 2004. MCYS will look into ways to increase the availability of infant care places if there is good demand.

13. Foreign Domestic Worker Levy Concession. Families employing foreign domestic workers will now pay a lower Foreign Domestic Worker Levy of $250 (compared to the current $345) if they have a Singapore Citizen child aged below 12 years sThanking those who had contributed their views, Mr Lim said the feedback has enabled the Steering Group to develop a package of measures that is "coherent, practical and helpful for Singaporean families".

A Long Term Effort by Everyone

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