Bigger baby bonus, more paternity leave: 7 takeaways for parents from Budget 2023
From greater contributions to the Child Development Account to changes in tax relief for working mothers, here are the key announcements for parents.
SINGAPORE: More financial support for parents and longer paid paternity leave were among the measures announced on Tuesday (Feb 14) to support families in Singapore.
In his Budget 2023 speech, Deputy Prime Minister Lawrence Wong said that the Government already has “a generous set of measures” to help parents with the costs of raising children, but some schemes needed adjustments to support those 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 your parenthood journey,” he said.
The changes will cost the Government S$240 million per cohort of children.
“I hope this will provide greater assurance to parents and parents-to-be as they think about starting and raising their families,” Mr Wong added.
Here are seven key announcements for parents from Budget 2023:
BABY BONUS INCREASED BY S$3,000
The Baby Bonus Cash Gift will be increased by S$3,000 for all eligible Singaporean children born from Tuesday.
Parents will receive S$11,000 for their first and second children, up from S$8,000. For their third and subsequent children, the bonus will now be S$13,000, up from S$10,000 previously.
The schedule of payments will also be adjusted to last until the child turns six-and-a-half years old. Parents will receive up to S$9,000 over the first 18 months of their child’s life, followed by S$400 every six months.
Children who are Singapore citizens and whose parents are lawfully married are eligible for the Baby Bonus cash Gift.
The increased bonus will be paid out from early 2024, to allow sufficient time for the required legislative and system changes, said Mr Wong.
"Eligible Singaporean children who are born on or after Feb 14, 2023, will continue to enjoy the current Baby Bonus Cash Gift benefits until the date the changes are implemented," said the Ministry of Finance.
BABY SUPPORT GRANT EXTENDED
The Baby Support Grant, a one-off cash payout of S$3,000 that was introduced during the COVID-19 pandemic, will be extended.
It was initially given to children born between Oct 1, 2020, and Sep 30, 2022.
The grant has now been extended to parents of babies born from Oct 1, 2022, to Feb 13 this year.
CONTRIBUTIONS TO CHILD DEVELOPMENT ACCOUNT
The Government will increase contributions to the Child Development Account (CDA) in two ways.
First - the CDA First Step Grant for all eligible Singaporean children born from Feb 14 will be increased from S$3,000 to S$5,000.
The Government will also match parents’ contributions to the CDA up to a higher limit than before for first- and second-born children.
Parents' contributions will be matched dollar-for-dollar up to S$4,000 for the first child and up to S$7,000 for the second child, an increase of S$1,000.
The amounts remain unchanged for subsequent children, according to the National Population and Talent Division (NPTD) in a media release.
Funds in the CDA can be used for pre-school and healthcare fees.
While children born from Feb 14 are eligible for the larger contributions, the move will only be implemented from early 2024. Parents will be informed about when they can make additional deposits that the government will match.
PATERNITY LEAVE DOUBLED TO FOUR WEEKS
Government-paid paternity leave will increase from two weeks to four weeks for eligible working fathers of Singaporean children born from Jan 1, 2024.
Employers will not be required to offer the additional two weeks of leave, but those who do so will be reimbursed by the Government. Mr Wong said that the Government intends to make the policy mandatory in due course.
“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,” he said.
SIX MORE DAYS OF UNPAID INFANT CARE LEAVE
Each parent will receive 12 days of unpaid infant care leave per year for the first two years of their child’s life from Jan 1 next year, up from six days currently.
All parents of Singaporean children who have worked with their employer for a continuous period of at least three months will be eligible for this additional time off.
“This will give parents more time to bond with and care for their newborn, or to settle caregiving arrangements,” Mr Wong said.
CHANGES TO TAX RELIEF FOR WORKING MOTHERS
The Working Mother’s Child Relief will be changed to a fixed dollar relief - instead of a percentage of the mother’s earned income - for Singaporean children born or adopted from Jan 1 next year, Mr Wong said.
Eligible working mothers will be able to claim S$8,000 in tax relief for their first child, S$10,000 for their second child and S$12,000 each for their third and subsequent children. This will take effect in the 2025 Year of Assessment, for income earned in 2024.
“Effectively, this will provide more Government support for eligible lower- to middle-income working mothers,” said Mr Wong.
For Singaporean children born or adopted before Jan 1 next year, there will be no change in the Working Mother’s Child Relief. It will remain at 15 per cent of the mother’s earned income for the first child, 20 per cent for the second child and 25 per cent for the third and subsequent children.
The total amount of relief an eligible working mother can claim for all her children is capped at 100 per cent of her earned income. It is also subject to a total cap of S$50,000 per child, NPTD said.
LAPSE OF FOREIGN DOMESTIC WORKER LEVY TAX RELIEF
The Foreign Domestic Worker Levy Tax Relief will lapse from the Year of Assessment 2025. Eligible taxpayers can currently claim relief for double the migrant domestic worker levy paid in the preceding year for one domestic worker, NPTD said.
Since the tax relief was introduced, new policies that directly support those caring for dependents have taken effect.
Under the migrant domestic worker levy concession, those living with children below 16 years old, the elderly or people with disabilities pay a S$60 levy. Others pay a levy of S$300 per month for their first migrant domestic worker and S$450 per month for subsequent workers.
“As the concessionary levy is a more targeted and progressive way of supporting our families who need help with caring for their dependents, the (Foreign Domestic Worker Levy Tax Relief) will therefore be lapsed,” the NPTD said in a media release.