E. Strengthening Our Social Compact


E. Strengthening Our Social Compact

  1. 95. Even as we grow our economy and equip our workers, we will also invest significant resources to strengthen our social compact. We will do so in three key areas: strengthening families, tackling the related issues of inequality and social mobility, and providing better care for a rapidly ageing population.

Building a Singapore Made For Families

  1. 96. I will start with families, which form the bedrock of our society, and are the anchors of emotional, social, and financial support for all of us.
  2. 97. Many young Singaporeans aspire to get married and have children. One such couple is Mr Prab Nathan and Ms Saraswathy Arumugam. They have a two-and-a-half-year-old daughter, and recently welcomed a new addition to their family. As young parents, they have many exciting plans for their family, but they also have their share of concerns and stresses. So in this Budget, we will step up support for young couples like them, and help them realise their aspirations in a “Singapore Made For Families”.
  3. 98. First, we will do more to support the housing aspirations of young Singaporeans.
  4. 99. HDB already sets aside the bulk of its BTO flat supply for First-Timer families, who are given priority for their flat applications. But the First-Timer category today covers a wide range of applicants. For example, those who already have their own homes, but have not received housing subsidies before, are also considered First-Timers.
  5. 100. Given this wide range of First-Timer applicants, and the current tightness in BTO supply, we should identify and provide more support to specific groups. We will therefore focus on First-Timer families with children, as well as young married couples aged 40 years old and below, who are buying their first home. We will do more to help such families secure their BTO flats in a timely manner, including by giving them an additional ballot for their BTO flat applications. This will be implemented later this year. More details will be provided by the Minister for National Development at the COS.
  6. 101. Some Singaporeans are prepared to buy resale flats for their first homes, but they find the resale prices today too expensive. We have implemented cooling measures to moderate demand in the resale market. And the launch and completion of more BTO projects over the next few years will further ease demand and prices of resale flats.
  7. 102. I will also provide more support for First-Timer families to purchase resale flats. I will increase the CPF Housing Grant by $30,000 for eligible First-Timer families purchasing 4-room or smaller resale flats, and by $10,000 for those purchasing 5-room or larger flats. Eligible First-Timer families purchasing resale flats will qualify for this increased CPF Housing Grant with immediate effect. The additional grant amount will be credited into their CPF account from April this year onwards. Together with the Enhanced CPF Housing Grant and the Proximity Housing Grant, eligible families can receive up to $190,000 in grants when buying a resale flat. (See Annex E-1.)
  8. 103. Second, I will do more to support parents with the costs of raising their children. The Government already has a generous set of measures including the Baby Bonus Scheme, significant preschool and education subsidies, and tax benefits like the Parenthood Tax Rebate and Working Mother’s Child Relief.
  9. 104. Some of these schemes need to be adjusted, to ensure that more support is given to those with greater needs.
  10. 105. For Singaporean children born or adopted on or after 1 January 2024, I will change the Working Mother’s Child Relief, or WMCR. I will change it from a percentage of the mother’s earned income to a fixed dollar relief. This will take effect from the Year of Assessment 2025. So for Singaporean children born or adopted before 1 January 2024, there is no change to the WMCR that their eligible working mothers can claim.
    1. a. With this change, eligible working mothers in the future will claim the same amount of tax relief for a child in the same child order: $8,000 in tax relief for her first child, $10,000 for her second child, and $12,000 each for her third and subsequent child.
    2. b. Effectively, this will provide more Government support for eligible lower- to middle-income working mothers.
  11. 106. We will also lapse the Foreign Domestic Worker Levy Tax Relief for all taxpayers from the Year of Assessment 2025. This is because we already have a migrant domestic worker levy concession, which provides more targeted support for families who need help caring for their dependants, including young children below 16 years old.
  12. 107. While we make these adjustments, I will at the same time significantly increase financial support in the child’s early years.
  13. 108. I will increase the Baby Bonus Cash Gift by $3,000 for all eligible Singaporean children born from today onwards. Eligible first- and second-born children will receive $11,000 instead of $8,000. And for the third child onwards, the Baby Bonus Cash Gift will be increased from $10,000 to $13,000.
    1. a. Currently, the Baby Bonus Cash Gift is disbursed in five instalments over the child’s first 18 months, to help defray child-raising costs during infancy.
    2. b. I will restructure the disbursements, so that they are paid out over a longer period.
    3. c. Eligible parents can expect up to $9,000 in payouts in the first 18 months of a child’s life, as well as $400 every six months starting from when the child is two until the child turns six-and-a-half years old.
    4. d. In this way, parents can receive continuous support all the way until their child enters primary school.
  14. 109. For eligible Singaporean children born from today, I will also increase the Government contributions to the Child Development Account, or CDA, which their parents can use to directly offset preschool and healthcare expenses.
    1. a. I will increase the First Step Grant from $3,000 to $5,000. This is automatically credited into the CDA, and parents can immediately benefit from it once they open the account.
    2. b. I will also increase the Government co-matching cap for the CDA. Today, the Government co-matches every dollar that parents save in the CDA, up to a cap of $3,000 and $6,000 for the couple’s first and second child, respectively. I will increase these co-matching caps by $1,000 each, to $4,000 for the first child and $7,000 for the second child.
  15. 110. To cater sufficient time for the required legislative and system changes, the enhancements to the Baby Bonus Cash Gift, CDA First Step Grant, and CDA co-matching caps will be made available from early next year. We will notify parents when they can make the additional deposits into their child’s CDA to enjoy the enhanced Government co-matching.
  16. 111. The changes I have just described apply to eligible Singaporean children born from today. Some may ask – how about those born earlier? In fact, at the height of the pandemic, the Government had also provided a one-off Baby Support Grant of $3,000. This was for children born from 1 October 2020 to 30 September 2022. To ensure that we do not miss out some new parents, I will extend this Grant to babies born from 1 October 2022 to 13 February 2023.
  17. 112. So to all young married couples: whether you already have a newborn, or you are expecting a baby, or plan to have a baby, we have something to help you in your parenthood journey.
  18. 113. Third, we will better support parents in managing their work and family commitments.
  19. 114. Here, a key component is flexible work arrangements.
    1. a. We have been encouraging employers to adopt the voluntary Tripartite Standard on Flexi-Work Arrangements and to make these arrangements more pervasive.
    2. b. We will implement these Tripartite Guidelines by next year, which means that employers will be required to consider staff requests for such flexi-work arrangements fairly and properly.
  20. 115. We will also strengthen our leave provisions for parents of infants. Currently, eligible working fathers of Singaporean children are entitled to two weeks of Government-Paid Paternity Leave. When we introduced this 10 years ago, take-up rates were low. But over time, the situation has changed. Today, more than half of our fathers take paternity leave.
  21. 116. I am heartened by this trend. Because many studies, internationally and in Singapore, have shown that children with more involved fathers have better physical, cognitive, and emotional developmental outcomes.
  22. 117. I will therefore double the Government-Paid Paternity Leave from two weeks to four weeks for eligible working fathers of Singaporean children born on or after 1 January 2024.
    1. a. For a start, the extra two weeks will be given on a voluntary basis, so that employers who are ready to grant the additional leave will be reimbursed by the Government.
    2. b. This is also to give more time for employers to adjust, especially taking into account the existing economic conditions and manpower and operational challenges that many employers face.
    3. c. But we will review this and intend to make this mandatory in due course.
    4. d. With the doubling of paternity leave, I hope the message is clear: we want paternal involvement to be the norm in our society, and we will stand behind all our fathers who want to play a bigger role in raising our children.
  23. 118. I will also increase Unpaid Infant Care Leave for each parent in the child’s first two years, from the current six days per year to 12 days per year.
    1. a. This will give parents more time to bond with and care for their newborn, or to settle caregiving arrangements.
    2. b. All parents of Singaporean children will be eligible for this additional time off if they have worked with their employer for a continuous period of at least three months.
    3. c. And this, too, will apply from 1 January 2024 onwards for eligible working parents with Singaporean children aged under two years old.
  24. 119. Taken together, these enhancements will increase parental leave for a working couple from 22 weeks to up to 26 weeks in their child’s first year.
  25. 120. The enhancements to the Baby Bonus Cash Gift, CDA, and leave provisions will cost the Government an additional $240 million per birth cohort of children. I hope this will provide greater assurance to parents and parents-to-be as they think about starting and growing their families. (See Annex E-2.)

Additional Support for Lower-Income Families

  1. 121. On top of broad-based support for families, we prioritise additional support for lower-income families – to help them achieve stability, self-reliance, and social mobility, so that they can have dignity and aspire to a good future in Singapore.
  2. 122. We are making progress on these fronts. Our income inequality, as measured by the Gini coefficient, has been steadily declining, as a result of deliberate policy moves like the Workfare Income Supplement, Progressive Wage Model, and Silver Support Scheme.
  3. 123. But helping lower-wage workers get better incomes is just one part of the equation. We know that the issues that lower-income individuals and families face are complex and multifaceted. We therefore need a family-centric approach to provide these families with holistic and comprehensive support, and to help them make lasting changes in their lives.
  4. 124. Last year, I spoke about taking such an integrated family-centric approach through ComLink. We have since rolled out ComLink as a nationwide platform to serve 14,000 families with children living in rental housing. We also have volunteer befrienders journeying together with the ComLink families to encourage and support them in achieving their goals. The befrienders work closely with officers from the Social Service Offices, or SSOs, which coordinate family interventions at the backend, such as access to programmes and schemes.
  5. 125. We will now take a further step to better integrate the common functions across the different programmes in Government that support lower-income families. The SSOs will deliver these functions, and bring partners together to work in tandem, coordinating and integrating all the efforts for maximum impact. The Minister for Social and Family Development will share more at the COS.
  6. 126. A critical source of support for many lower-income families is delivered through our social assistance schemes like ComCare, which help families meet their basic living expenses and work towards achieving stability and self-reliance.
    1. a. Part of the monies that fund ComCare come from the investment income from the ComCare Endowment Fund.
    2. b. To ensure that the Fund is able to provide the necessary support to our lower-income families in this high-inflation environment, I will top up the Fund by $300 million.
  7. 127. Beyond inequality, we must also sustain social mobility across generations. In particular, we know that the first few years matter greatly in shaping a child’s potential in life. So we must do more to close the early gaps in our children’s lives.
  8. 128. We have made some progress through initiatives like KidSTART, which provides upstream support for pregnant mothers and young children in lower-income families.
    1. a. KidSTART’s preliminary outcomes are encouraging. There are some early indications that KidSTART children had better preschool attendance than their peers of similar socio-economic backgrounds. Parents and caregivers on the programme also said that they were better supported in their parenting journey.
    2. b. So to support more lower-income families with their children’s early development, we will scale up KidSTART nationwide. And we expect to support 80% of eligible children in lower-income families, starting from the children born this year.
  9. 129. We have also made significant investments in the early childhood sector.
    1. a. Over the last decade, our spending on the early childhood sector has grown to six times its original size, from $320 million in FY2013 to about $1.9 billion in FY2022.
    2. b. Lower-income families now pay as little as $3 a month for full-day childcare in an Anchor Operator preschool.
    3. c. These investments have had an impact. The preschool enrolment rate of children aged five to six years old residing in public rental flats is now comparable to the national average. But for children aged three to four years old residing in public rental flats, the preschool enrolment rate is 80%, lower than the national average of about 88%.
  10. 130. So we will continue to provide additional assistance to lower-income families and reach out to them to facilitate their children’s preschool enrolment. At the same time, over the next two years, we will work with Anchor Operators to create 22,000 more full-day childcare places and expand the number of MOE Kindergartens. This will help support higher preschool participation rates across the board, and especially amongst lower-income families.

Providing Assurance in Our Silver Years

  1. 131. At the other end of the demographic spectrum, Singapore is one of the fastest-ageing nations in the world. By 2030, one in four Singaporeans will be aged 65 and above, up from one in six today. While many are living longer, some do spend their final years in ill health. This, coupled with smaller household sizes, will mean an increased burden of care for families.
  2. 132. Nursing homes are suitable for the elderly with high care needs and little to no family support, but we cannot rely on nursing homes as the mainstream solution. In fact, many seniors themselves prefer to be cared for in the community and to grow old in an environment that is familiar to them, surrounded by their loved ones.
  3. 133. We will therefore need to review and update our approaches to aged care – to ensure seniors live as much of their lives in good health as possible, and have ample options to age in the community.
  4. 134. Our first line of defence is that of preventive care. And that is why our priority is to support seniors to take care of their own health, including by remaining physically and mentally active, and staying engaged in their communities.
    1. a. We have introduced Healthier SG, as an empowering strategy, so that seniors can take preventive care steps together with their doctors and community partners to improve their health.
    2. b. This will enable seniors to keep chronic illnesses at bay, or if they do contract them, to detect the diseases early so that these can be kept under control.
    3. c. The refreshed Action Plan for Successful Ageing, launched last month, supports Healthier SG by setting out a comprehensive set of initiatives for seniors to better care for themselves, continue contributing, and stay connected.
  5. 135. But for seniors to stay active and healthy, or to better manage their existing chronic illnesses, they will need stronger support in the community, outside of hospitals and clinics. So as part of the Forward Singapore exercise, we are studying how we can enhance the range of care and support options within the community. This includes reviewing the operating model of Active Ageing Centres and examining how we can better strengthen and coordinate the providers in the aged care sector, which is highly fragmented today.
  6. 136. In the meantime, we will increase the resources dedicated to supporting seniors, especially lower-income seniors, with their long-term care and healthcare needs.
    1. a. I will top up the ElderCare Fund by $500 million to support means-tested subsidies for seniors who need home-based, centre-based, or institutional care.
    2. b. I will also top up the MediFund by $1.5 billion to strengthen the safety net for lower-income individuals and seniors facing financial difficulties with their medical bills, even after Government subsidies, MediShield Life, and MediSave.
  7. 137. As our population ages, we will also have to address the retirement needs of Singaporeans.
    1. a. We have enhanced the CPF system over the years, such as through Workfare and extra interest on lower CPF balances.
    2. b. We now have Silver Support to supplement the retirement income of seniors who had low incomes in their working years.
    3. c. And we also encourage family members with more means to top up their loved ones’ CPF through tax reliefs and matching grants.
  8. 138. We are considering what more we can do to enhance retirement adequacy in our Forward Singapore deliberations. Meanwhile, in this Budget, I will make several moves to help specific segments.
  9. 139. In particular, the Government had earlier convened the Advisory Committee on Platform Workers to look into strengthening protections for Platform Workers, including improving their housing and retirement adequacy.
  10. 140. The Government has accepted the Committee’s recommendations, one of which was to align the CPF contribution rates of Platform Workers and Companies with those of employees and employers over a period of five years. Platform Workers who are below 30 years old when the changes are implemented will be required to make increased CPF contributions. Platform Companies will also be required to pay CPF contributions for these Platform Workers.
  11. 141. These changes will help Platform Workers raise their total earnings and strengthen their housing and retirement adequacy. But in the short term, they will affect the take-home pay of these workers. I will therefore introduce additional support to help lower-income Platform Workers cushion this impact.
    1. a. For the first four years after implementation, I will provide a CPF Transition Support to lower-income Platform Workers who see an increase in their CPF contribution rates.
    2. b. More information on this Transition Support is in the Annex and the Minister for Manpower will also share more at the COS. (See Annex-E3.)
  12. 142. We will also make some CPF adjustments for older workers, in line with the recommendations of the Tripartite Workgroup on Older Workers. We implemented the first increase in CPF contribution rates for senior workers in 2022, and the second increase earlier this year. For these two increases, the Government had provided employers with a CPF Transition Offset to alleviate the increase in business cost. We will continue with the next increase in CPF contribution rates in 2024, and likewise provide employers with a similar offset.
  13. 143. In addition, I will increase the minimum CPF monthly payout for seniors on the Retirement Sum Scheme to $350 a month.
  14. 144. I will also help middle-income Singaporeans save more for their retirement by raising the CPF monthly salary ceiling.
    1. a. The CPF salary ceilings were last raised in 2016.
    2. b. To keep pace with rising salaries, we will raise the monthly salary ceiling from $6,000 to $8,000 in 2026.
    3. c. We will phase in the increases over four years, starting from this year, to allow employers and employees to adjust to the changes. (See Annex E-4.)
  15. 145. Mr Speaker Sir, the measures in this Budget are one step in our overall efforts to strengthen our social compact, and to build a fairer and more inclusive society. We still have more to do, and we will continue this important work as part of Forward Singapore.