Higher Income Tax Payments following Change from Percentage-based to Fixed-dollar Working Mother's Child Relief

Parliamentary Question by Mr Kenneth Tiong Boon Kiat:

To ask the Prime Minister and Minister for Finance (a) based on the Year of Assessment (YA) 2025 data, how many working mothers with children born from 2024 paid higher income tax following change from percentage-based to fixed-dollar Working Mother's Child Relief; (b) what is the projected additional tax revenue over the next decade as the affected cohort grows; and (c) whether this projected revenue is consistent with the objective of encouraging higher-order births.

Parliamentary Reply by Senior Minister of State for Finance, Mr Jeffrey Siow:

The Working Mother’s Child Relief is part of a broader package to support Singaporeans in their marriage and parenthood journey. We have over the years significantly increased financial support such as the Baby Bonus Cash Gift and the Child Development Account First Step Grant, and enhanced parental leave provisions. We also introduced the new Shared Parental Leave scheme and the Large Families Scheme last year.  All in, we expect these initiatives to cost the Government close to $7 billion in FY2026, up from over $4 billion in FY2020.

About 9,500 working mothers paid higher income tax in YA 2025 than they would have under the old WMCR basis. The change in basis of the WMCR to a fixed dollar relief was to provide equal support for children of the same child order regardless of the mother’s income, which improves the progressivity of our support. We are unable to project the additional tax revenue from the WMCR change over the next 10 years, as this is dependent on many variables that could change over time, such as the working mother’s income, the other qualifying reliefs, and number of children she may eventually have.

However, we expect the cost of the marriage and parenthood initiatives to far exceed any additional tax revenue from the WMCR change.