More monetary help for families with young children
Father and son at a children's water park at Gardens by the Bay. TODAY file photo
SINGAPORE — Families with young children will be given more monetary support through an additional grant in their child’s Child Development Account (CDA), a co-savings scheme between parents and the Government.
Announcing this in the Budget statement in Parliament on Thursday (March 24), Finance Minister Heng Swee Keat said all babies born from Thursday will be eligible for this new CDA First Step grant. Parents will automatically receive S$3,000 in their child’s CDA account even without any prior contributions. The money can be used for the children’s healthcare, educational and childcare needs.
But parents should wait until July 1 before putting their savings into the CDA. What they save in the account after that date will be matched dollar-for-dollar by the Government up to the contribution caps, which includes the S$3,000 grant.
The contribution caps are fixed at S$6,000 for the first and second child; S$12,000 for the third and fourth child and S$18,000 for the fifth and subsequent children.
Under the scheme currently, the child of a parent who saves S$3,000 will receive another S$3,000 in matched contributions by the Government. With the new grant and with the same amount of savings, the child will receive another S$6,000 — S$3,000 from the new grant and another S$3,000 from the matched contributions by the Government.
Writing on her Facebook page, Senior Minister of State in the Prime Minister’s Office Josephine Teo, who also helps oversee the National Population and Talent Division, said that about 74 per cent of CDA holders will be able to maximise the Government contribution caps with the new grant, up from the 60 per cent who currently do so.
“The CDA First Step will also be a boost to larger families, allowing parents with three or more children to benefit more from the Government contribution caps currently available for them,” she added. The new grant will also be “particularly helpful” for some 5 per cent of CDA holders who do not enjoy any of the co-matching funds from the Government. People in this group do not make any savings in their accounts at all, perhaps because they are unable to do so, she added.
With immediate effect, the Medisave withdrawal limit for a mother’s pre-delivery medical expenses — such as pre-natal consultations and ultrasound scans — will also be doubled from S$450 to S$900, announced Mr Heng Thursday.
And for a “small group” of parents who may need more support to give their children a good start in life, the Government will start a new pilot initiative — targeting some 1,000 young children aged six and below — which will tap on government and community resources to ensure these children receive appropriate learning, developmental and health support.
The KidSTART pilot is expected to cost more than S$20 million, with Minister for Social and Family Development Tan Chuan-Jin to share more details at the Committee of Supply debate.
Mr Ivan Ong, who will welcome his second child at the end of May, said the CDA grant has been useful in offsetting the childcare fees for his first child, and he will continue to use it for this purpose. The 32-year-old account manager, who works in the training industry, pays about S$400 monthly in childcare fees after subsidies at a private childcare centre.
Allied educator Maizatul Husna, whose child is due in October, also plans to use the CDA grant for childcare fees. “In the first few months, I expect that the baby will need a lot of health checks, but I will try to use my savings as much as I can,” said the 27-year-old. “I want to save the CDA grant for childcare costs because it is more expensive.” ADDITIONAL REPORTING BY AMANDA LEE
