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Budget 2023: More money, paternity leave for couples wanting children

Singapore government to boost financial support for families in the early years of raising children, says DPM Lawrence Wong

Picture of a family holding a baby with Lawrence Wong in a circle inset, to illustrate a Budget 2023 story. (PHOTO: Yahoo Finance Singapore)
Couples who want to have children will be able to enjoy more financial benefits as well as more paternity leave, as the Singapore government boosts support for families in the early years of raising children. DPM Lawrence Wong announced the extra help during his Budget speech. (PHOTO: Yahoo Finance Singapore) (Esther Au Yong)

SINGAPORE — Couples who want to have children will be able to enjoy more financial benefits as well as more paternity leave, as the Singapore government boosts support for families in the early years of raising children.

Deputy Prime Minister (DPM) Lawrence Wong announced during his Budget speech on Tuesday (14 February) a host of measures to strengthen support for Singaporeans on their parenthood journey, with adjustments to tax relief schemes to support families with greater needs.

"To all young married couples, whether you already have a newborn, or you are expecting a baby or you plan to have a baby, we have something to help you in parenting journey," DPM Wong, who is also the Minister for Finance, said in Parliament.

INFOGRAPHIC: MOF
INFOGRAPHIC: MOF

$3,000 more in Baby Bonus cash gift

Married couples with Singaporean babies born on or after Tuesday will get S$3,000 more in the form of the Baby Bonus cash gift.

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This means eligible first- and second-born children will receive $11,000 instead of S$8,000. For the third child onwards, the gift will be increased from S$10,000 to S$13,000.

DPM Wong said that the disbursements will also be restructured so that they are paid out over a longer period. Eligible parents can expect up to S$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 years old, until the child is six-and-a-half years old.

"In this way, parents can receive continuous support all the way until their child enters primary school," he said.

Government contributions to the Child Development Account (CDA) will be increased for eligible Singaporean children born from Tuesday. This can be used by parents to directly offset pre-school and healthcare expenses.

DPM Wong said the First Step Grant will be increased from S$3,000 to S$5,000. The government will also increase its co-matching cap by S$1,000 each for the accounts of a couple's first child and second child.

These two enhancements will kick in from early 2024.

The government will also extend the one-off Baby Support Grant of S$3,000 – introduced at the height of the COVID-19 pandemic – to babies born from 1 October 2022 to 13 February 2023.

Paternity leave to be doubled from 2 to 4 weeks

The government-paid paternity leave will be doubled from two weeks to four weeks for eligible working fathers of Singaporean children born on or after 1 January 2024.

DPM Wong said that, for a start, the extra two weeks will be voluntary, so employers which are ready to grant the additional leave will be reimbursed by the government. This is also to give employers more time to adjust.

The Government will review this over time and intends to make this mandatory in due course, he added.

Unpaid infant care leave for each parent in their child's first two years will also be doubled to 12 days per year, starting from 1 January 2024. DPM Wong said that 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.

Taken together, the leave enhancements will increase parental leave for a working couple from 22 weeks to up to 26 weeks in their child's first year.

Working Mother's Child Relief changed

For Singaporean children born or adopted on or after 1 January 2024, the Working Mother's Child Relief will be changed from a percentage of the mother's earned income to a fixed dollar relief.

Eligible working mothers will be able to claim tax relief totalling $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. This will take effect from the year of assessment 2025.

DPM Wong said that this change will provide more government support to eligible lower- and middle-income working mothers.

From the year of assessment of 2025, the foreign domestic worker levy tax relief for all taxpayers will also be lapsed. This is because there is already a migrant domestic worker levy concession, which provides more targeted support for families who need help caring for their dependants, including children aged below 16.

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