GST Voucher Scheme Not The Only Offset for GST Paid By Lower-Income Households

Date: 14 April 2014

Parliamentary Question by Mr Gerald Giam Yean Song:

To ask the Deputy Prime Minister and Minister for Finance (a) on average, what percentage of GST paid by the lowest 20% of households (by income) is offset by all forms of GST Vouchers last year; and (b) whether the Government will consider fully offsetting the GST paid by all households in the lowest quintile even in years when there are no one-off Special Payments made.

Reply by DPM and Finance Minister Tharman Shanmugaratnam:

In 2013, for the lowest 20% of households^[1], on average about half (49.4%) of their GST paid would have been offset by the regular GST Voucher. If we include the one-off GST Voucher Special Payment announced in Budget 2013, the benefits from the GST Voucher would have covered over 90% of their GST paid.
 
However, the GST Voucher scheme is not the only offset for the GST paid by lower-income households. The GST Voucher is part of a progressive system of taxes and benefits, that ensures that lower-income households get back far more benefits than the taxes they pay, including GST. These include childcare subsidies and financial assistance from school to tertiary education, Workfare, special and additional housing grants, and healthcare subsidies. The GST that they pay is far more than offset by the benefits they receive. 

^[1] Singapore citizen-headed households, ranked by household income per member