'Higher risk of misuse': MSF to stop use of Child Development Account money at optical shops, retail pharmacies

SINGAPORE: The Ministry of Social and Family Development (MSF) will stop the use of Child Development Account (CDA) money at optical shops and retail pharmacies after recent audits found a "significantly higher risk of misuse" at such establishments.

This includes cases where establishments allow parents or trustees to encash the CDA funds, even though it is prohibited.

The CDA is a special co-savings account with government co-matching, and the funds can be used to pay for approved expenses for the child or the child's siblings. 

MSF said it conducts periodic audits and checks to ensure that CDA funds are used for authorised purposes only. On top of that, the Auditor-General’s Office (AGO) audited selected parenthood schemes, including withdrawals made by parents and trustees.

The AGO had found "poor record keeping and unusual patterns of CDA withdrawals" at optical shops and retail pharmacies, including "frequent withdrawals within a short period" and purchases that do not appear to be for the child or the child's siblings.

MSF’s follow-up investigations revealed instances where the money was used on purchases for adults instead. Some establishments also allowed parents or trustees to encash CDA money.

The ministry's internal audit of 30 optical shops in 2024 found that over 85 per cent of outlets audited had similar unauthorised purchases.

In response to CNA's query, an MSF spokesperson said that the ministry is investigating the unauthorised withdrawals.

"For cases that have been surfaced during the AGO audit, MSF has sought refunds from Approved Persons at Approved Institutions and the CDA trustees," said the spokesperson.

Optical shop and retail pharmacy merchants also provided feedback that it is "challenging and onerous" to conduct the required point-of-sales checks on CDA transactions, given the retail nature of the business, said MSF.

The ministry added that usage at optical shops and retail pharmacies has been "very low", comprising 0.8 per cent and 0.4 per cent of total CDA spending in 2024 respectively.

It also noted that most of the money were spent at preschools, including kindergartens, and healthcare institutions, accounting for 97.1 per cent of the total spending in 2024.

Retail pharmacies refer to licensed pharmacy stores selling prescribed medication and health-related products, such as those located in commercial spaces like shopping centres. 

The change will not affect pharmacy departments within healthcare institutions, such as hospitals and polyclinics, said MSF.

It added that CDA funds can continue to be used for prescribed medication and consultation fees at those institutions, as well as General Practitioner clinics that are Baby Bonus Approved Institutions.

"The government remains committed to supporting families with child-raising costs through measures such as the Baby Bonus Cash Gift, Child LifeSG Credits, and the new Large Families Scheme," said MSF, adding that families who need financial support can approach Social Service Offices for assistance.

The ministry noted that since May 2025, the scope of CDA use has been expanded to include "incidental charges at preschools to better meet families’ needs and support the child’s participation in a broader range of developmental activities".

Such programmes include enrichment classes in preschools, such as in speech and drama.

"The government will continue to review the administration of the CDA to ensure that the scheme remains relevant and achieves its intended purpose to benefit the child and his/her sibling(s)."