Congratulations, you’re expecting! Or perhaps you’re a newly minted parent, a newlywed couple who is contemplating having a little one, or still in the midst of dating but having little ones was always in the plan.
Whatever it is, welcoming a bundle of joy is a precious moment, and for first-time parents, sorting out your finances before you begin your parenthood journey could make the learning curve less steep.
The good news is brand-new parents and parents-to-be also have help from the Singapore government, in terms of cash gifts, tax reliefs, support and more. Let’s look at these baby benefits for 2023, starting with the recently announced enhanced baby bonus that kicked in from 1 Aug 2023, several months earlier than the initial implementation timeline in early 2024.
Enhanced Baby Bonus Cash Gift 2023: What Are the Changes & Am I Eligible?
During Budget 2023 in February this year, it was announced that families with eligible Singaporean children born on or after 14 February 2023 would get: $3,000 more for their Baby Bonus Cash Gift.
The enhanced Baby Bonus would be doled out ahead of time from 1 Aug 2023, instead of the previously announced implementation timeline of early 2024. Yay!
In addition, the payout schedule for this enhanced Baby Bonus Cash Gift would be adjusted over a longer pay-out period. This means that parents of eligible children would get financial support regularly every 6 months until their little one reaches their 6-and-a-half-year-old birthday. This was previously paid out over an 18-month period.
With the increase in the Baby Bonus Cash Gift, eligible first and second children will receive $11,000 each, while eligible third and subsequent children will receive $13,000 each. To qualify, these babies must be Singapore citizens and their parents must be lawfully married.
Here’s a quick summary of the enhanced Baby Bonus Cash Gift:
Enhanced Baby Bonus Cash Gift 2023
Born before 14 Feb 2023
Born on or after 14 Feb 2023
Third and subsequent children
How to join the Baby Bonus Scheme
The Baby Bonus Scheme is not an auto-enrolment, so you’ll need to register your child for the scheme before you can receive your cash gift. Kiasu parents can submit the online form, from as early as 2 months before their estimated delivery date.
When their baby is born, they can expect to receive the cash gift within 7 to 10 working days of their little one’s birth registration. If they enrolled their child into the Baby Bonus Scheme later, the cash gift will come within 7 to 10 working days of the enrolment.
Great timing because there’s a truckload of things to buy for your newborn and these expenses all add up.
Are adopted children eligible for benefits under the Baby Bonus Scheme?
Yes, adopted children are eligible if they meet the eligibility conditions. An adopted child who is born and adopted on or after 1 Jan 2010 shall be eligible for the Baby Bonus Scheme if:
His/her adoptive parent is lawfully married at the time of his adoption
He/she is a Singapore citizen at the time of his adoption or becomes a Singapore citizen before the age of 12 years
He/she is below 12 years of age at the time he is adopted
But of course, there are some caveats, so it’s best to use the Baby Bonus Scheme Eligibility Check to determine if the child is eligible.
Enhanced Baby Bonus Scheme 2023: Child Development Account (First Step Grant, Government Co-Matching Cap)
Another baby benefit under the newly announced enhanced Baby Bonus Scheme in 2023 is the Child Development Account (CDA). This was also brought forward to 1 Aug 2023, as part of the government’s enhanced suite of Baby Bonus Scheme benefits. The eligibility criteria is the same as for the enhanced Baby Bonus Cash Gift.
There are 2 parts to this benefit:
CDA First Step Grant increased from $3,000 to $5,000
Government co-matching cap raised by $1,000 for the first and second child
What is the CDA?
The CDA is basically a special co-savings account that you open for your child. You can open it at any major bank in Singapore, whether it’s DBS/POSB, OCBC or UOB. This account is where new parents will receive their child’s CDA First Step Grant (part of the Baby Bonus Scheme).
In addition, the government will match each dollar that you deposit into the CDA, up to the maximum co-matching cap. You can save money in the CDA for your child until 31 December of the year when they turn 12 years old.
These CDA funds can be used at Baby Bonus Approved Institutions. For example, to pay for your child’s fees at registered childcare centres, kindergartens, special education schools and early intervention programmes; your child’s medical expenses, insurance premiums (cash top-up portion to MediSave), assistive technology devices, eye-related products and services at optical shops (yup, given Singapore’s rate of myopia), and approved healthcare items at pharmacies.
Your child’s CDA will be opened within 3 to 5 working days of their birth registration, or after you’ve enrolled them into the Baby Bonus Scheme (whichever is later).
Here’s a quick summary of the enhanced CDA benefits:
Enhanced Child Development Account 2023
First Step Grant
Government Co-Matching Cap
Born before 14 Feb 2023
Born on or after 14 Feb 2023
Born before 14 Feb 2023
Born on or after 14 Feb 2023
Fifth and subsequent children
Enhanced First Step Grant & Government Co-Matching Contributions: Payout Timeline
Here’s a quick overview of when parents can expect to see the grant and co-matching payouts in their child’s CDA based on when they enrol their baby:
Enrolled in Baby Bonus Scheme from 14 Feb to 30 June 2023 — additional $2,000 First Step Grant paid by mid-August; receive government co-matching contributions within two weeks of deposits, excluding public holidays
Enrolled in Baby Bonus Scheme from 1 July to 31 July 2023 — additional $2,000 First Step Grant paid by 1 Oct 2023; might have to wait until 1 Oct 2023 to receive government co-matching contributions
Enrolled in Baby Bonus Scheme from 1 Aug 2023 — additional $2,000 First Step Grant paid within 2 weeks of opening the account
CDA savings made after 1 Oct 2023 — receive government co-matching contributions within two weeks of deposits, excluding public holidays
Other Benefits for Parents
MediSave Grant for Newborns
First newborns, there is an existing MediSave Grant of $4,000. Babies who are Singapore citizens will automatically get their own MediSave account when their birth is registered. A MediSave grant of $4,000 will be deposited into their account, and this amount can help parents pay for their little one’s healthcare expenses, which include MediShield Life premiums, recommended childhood vaccinations, hospitalisation, and approved outpatient treatments.
By the way, while being a mandatory basic health insurance for Singapore Citizens, MediShield Life can also help defray large hospital bills and certain costly outpatient treatments (i.e., dialysis, chemotherapy) in public hospitals. It covers all Singapore Citizens for life, including those with congenital and neonatal conditions.
Families who are of lower- to middle-income can also tap further government subsidies for the first 4 years of their child’s life. Needy citizens who are still unable to pay can also get Additional Premium Support.
Tax Reliefs for Parents
If your assessable income is above a certain amount, you will need to pay income tax. If eligible, parents who are Singapore tax residents enjoy further tax reliefs, which brings down their assessable income and reduces the tax they need to pay, up to the personal income tax relief cap of $80,000 per year of assessment.
Qualifying Child Relief (QCR)
Up to $4,000 per child, can be shared with your spouse
Parenthood Tax Rebate
One-time claim in the year of assessment following your child’s year of birth can be shared with your spouse. $5,000 for the first child, $10,000 for the second child, $20,000 for the third child and for each subsequent child
Working Mother’s Child Relief (WMCR)
For mothers who have earned income. 15% of earned income for the first child, 20% of earned income for the second child, 25% of earned income for the third child and 25% for each subsequent child. The total cap for the sum of QCR and WMCR is $50,000 per child.
Foreign Domestic Worker Levy Relief
Claim twice the total foreign domestic worker levy paid for one foreign domestic worker last year against your earned income.
Grandparent Caregiver Relief
Working mothers can claim this if their unemployed parent, parent-in-law, grandparent or grandparent-in-law lives in Singapore and cares for their child. No one else should be claiming this on the same caregiver.
Mandated Leave for Parents
Speak to any parent, and they’ll tell you how tiring it is looking after a young child, especially one that is unwell. Now, with hybrid working, many parents may juggle both childcare duties and their job at home, which makes for an even busier day.
Recently announced during Budget 2023 was that working fathers can now enjoy up to 4 weeks of paid paternity leave, for their Singaporean children born from 1 January 2024. While that’s double, 2 of these weeks are currently mandated, and the additional 2 weeks will be offered on a voluntary basis by employers, who will be reimbursed by the government. These 4 weeks will eventually become mandatory. When exactly? It hasn’t been made known just yet.
By the way, self-employed dads who have been working in the same business or profession for at least 3 months before their children are born are also eligible!
Each parent also will get 6 more days of unpaid infant care leave from 1 January 2024. This is double the 6 days they had per year previously, which brings the total to 12. Parents are eligible for this benefit for the first two years of their Singaporean child’s life if they have worked with their current employer for a continuous period of at least 3 months.
Of course, it goes without saying that working mums are also entitled to up to 16 weeks of government-paid maternity leave. It was a lot of hard work carrying your child for those 9 months, and after they are born, nurturing them into fine adults!
Do you know someone who’s planning to have a child? Share this article with them!
The post Baby Benefits New Parents Can Expect From 2023: Enhanced Baby Bonus, Child Development Account, Tax Reliefs, and More appeared first on the MoneySmart blog.
The post Baby Benefits New Parents Can Expect From 2023: Enhanced Baby Bonus, Child Development Account, Tax Reliefs, and More appeared first on MoneySmart Blog.
Original article: Baby Benefits New Parents Can Expect From 2023: Enhanced Baby Bonus, Child Development Account, Tax Reliefs, and More.
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