05 May 2023
SOURCE: CPF Board
Becoming a parent is an exciting and life-changing experience, but it’s also essential to be financially prepared to provide for your growing family. This can be especially challenging for first-time parents as they juggle parenthood and multiple changes to the life they were used to. Thankfully, there is financial support from the Government to help them ease into parenthood.
Following the recent Budget 2023 announcements, these benefits have also expanded to include additional parental leave, financial assistance for childcare and even cash benefits. By taking advantage of these resources, you can ensure that you and your child get a head start, thus allowing you to focus on the joys of parenthood.
Here are a few tips to help you get started!
Manage child-raising costs with a bigger Baby Bonus Cash Gift
Under the enhanced Baby Bonus Scheme, you can receive $11,000 in cash (up from $8,000) for your first and second child, and $13,000 (up from $10,000) for your third and subsequent children. This helps to lighten the financial outlay when it comes to raising your child. Parents will receive up to $9,000 over the first 18 months, followed by $400 every six months until your child turns 6-and-a-half years old.
Children who are Singapore citizens and whose parents are lawfully married will be eligible. They must also be born after 14 Feb 2023 to qualify.
Ease education or healthcare costs with the Child Development Account (CDA) First Step Grant
Aside from the Cash Gift, the Baby Bonus scheme also comprises a special savings account - the CDA - which will be created for your child. All eligible Singaporean children will receive a First Step Grant of $5,000, up from $3,000 previously.
You can also double the savings deposited into your child’s CDA by leveraging the Government’s dollar-for-dollar matching, up to the Government co-matching cap. For example, if you top up $4,000 in your child’s CDA, the Government will match it with another $4,000.
This is capped at:
- $4,000 for your first child
- $7,000 for your second child
- $9,000 for your third and fourth child
- $15,000 for your fifth and subsequent child
Funds in the CDA can be used for childcare or healthcare expenses. This includes childcare centres, kindergartens, optical shops and clinics that are Baby Bonus Approved Institutions.
Manage healthcare expenses with the MediSave Grant for Newborns
Once you register your child’s birth, a MediSave Account will be created and $4,000 will be credited automatically. This can be used to pay for MediShield Life premiums, recommended childhood vaccinations, hospitalisation and approved outpatient treatments. All Singapore Citizen newborns are eligible for this grant.
Enjoy up to 4 weeks of paternity leave
If you are a working father of Singaporean children born from 1 January 2024, you can enjoy Government-paid paternity leave up to four weeks. This has been doubled from just two weeks previously.
Employers are currently not required to offer the additional two weeks of leave, but those who do so will be reimbursed by the Government. This policy will soon be made mandatory.
Receive 6 more days of unpaid infant care leave
From 1 January 2024, each parent will receive 12 days of unpaid infant care leave per year for the first two years of their child’s life – an increase from six days currently.
This will be eligible for all parents of Singaporean children who have worked with their current employer for a continuous period of at least three months.
More affordable preschools
Announced in 2022, an additional 22,000 full-day preschool places will be opened over the next two years. These will mostly be in newer estates with more young families. The move is designed to ensure that 80% of preschoolers will have a place in Government-supported preschools by 2025, up from just over 60% now.
Fee caps will also be reduced to allow for lower full-day childcare fees at those preschools. Parents can save up to $36 per month, after subsidies and GST.
Claim tax relief as working mother
Did you know you can also claim tax relief as a working mother under the Working Mothers’ Child Relief (WMCR) scheme? From 2025, the WMCR will be changed to a fixed dollar relief instead of a percentage of the mother’s earned income:
|
Singaporean children born or adopted before 1 January 2024 |
Singaporean children born or adopted on or after 1 January 2024 |
1st child |
15% of mother’s earned income |
$8,000 |
2nd child |
20% of mother’s earned income |
$10,000 |
3rd and subsequent child |
25% of mother’s earned income |
$12,000 |
Find out what are the eligibility conditions to qualify for this tax relief.
Get a levy concession for a migrant domestic worker
If you need to engage a migrant domestic worker for your household needs like taking care of your young children, you can qualify for a concessionary levy rate of $60 per month.
As a new parent (or a budding one), you may have other considerations too - additional day-to-day expenses from daily essentials such as diapers, milk powder and food. While managing your finances as a parent may seem challenging, there are other forms of support to help along in your parenthood journey.
Increased financial support from the Government
To assist with daily cost-of-living concerns, the Government will be increasing the Assurance Package (AP) from $6.6 billion to $9.6 billion. This includes AP cash benefits for all eligible Singaporeans and U-Save rebates to offset utility bills.
Every Singaporean household will also receive $600 Community Development Council (CDC) Vouchers ($300 disbursed in January 2023, another $300 in January 2024). The CDC Vouchers can be used at participating supermarkets to pay for those daily essentials.
While your current focus is on taking care of your little one, there will come a time when thoughts of being self-sufficient and not wanting to be a burden to your children might rear its head. The recent changes to CPF are there to help address such worries, helping new parents continue building their retirement nest egg, while they focus on the things that matter.
Find out how else the changes to CPF following the Budget 2023 announcements benefit you.
Welcoming a new member into the family is a major milestone for parents, which is why it’s crucial to plan ahead and equip yourself with financial knowledge and take advantage of the different grants available for you and your child. Don’t forget to take care of yourself even as you take on a new role as a parent too!
Information accurate as of date of publication.
