In his Budget 2023 address, Deputy Prime Minister Lawrence Wong declared the introduction of measures to assist families in Singapore, including extended paid paternity leave and increased financial support for parents. While acknowledging the government’s existing “generous set of measures” to help parents cover the costs of raising children, he emphasized the necessity to modify some of these schemes to better support those with greater needs. Mr. Wong extended his assurances to all young married couples, irrespective of whether they have a newborn, are expecting a baby, or intend to have one, that they will receive support on their journey of parenthood. The government’s proposed modifications are estimated to cost S$240 million per cohort of children. Mr. Wong hopes that these changes will provide parents and future parents with a greater sense of security as they contemplate beginning and raising their families. Budget 2023 includes seven significant announcements for parents.
Baby Bonus increased by S$3000
In Budget 2023, the Singapore government announced an increase in the Baby Bonus Cash Gift for eligible Singaporean children born on or after Feb 14, 2023. Under the revised scheme, parents will receive S$11,000 for their first and second children, an increase of S$3,000 from the previous amount. For their third and subsequent children, the bonus will increase to S$13,000, up from S$10,000. In addition, the payment schedule will be adjusted to provide up to S$9,000 over the first 18 months of a child’s life, followed by S$400 every six months until the child turns six-and-a-half years old.
The revised Baby Bonus Cash Gift scheme will be applicable to children who are Singapore citizens and whose parents are lawfully married. To allow sufficient time for the required legislative and system changes, the increased bonus will be paid out from early 2024. 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, as per the Ministry of Finance.
Extension of Baby Support Grant
The Singapore government has announced an extension of the Baby Support Grant, a one-time monetary payout of S$3,000 that was introduced in response to the COVID-19 pandemic. Originally intended for children born between October 1, 2020, and September 30, 2022, the grant will now be extended to include parents of babies born between October 1, 2022, and February 13, 2023.
Child Development Account contributions
The government has announced two ways to increase contributions to the Child Development Account (CDA). Firstly, the CDA First Step Grant for eligible Singaporean children born from February 14 will be increased to S$5,000 from the previous amount of S$3,000. Secondly, the government will increase the limit for matching parents’ contributions to the CDA for first- and second-born children. The amount of dollar-for-dollar matching of parents’ contributions will increase from up to S$3,000 to up to S$4,000 for the first child and from up to S$6,000 to up to S$7,000 for the second child. The National Population and Talent Division (NPTD) explained in a media release that the amounts will remain unchanged for subsequent children. The funds in the CDA can be utilized for pre-school and healthcare fees. While children born from February 14 are eligible for the increased contributions, the changes will not be implemented until early 2024. Parents will be informed of the additional deposit periods that are eligible for government matching.
Doubling of Paternity Leave
In his Budget 2023 speech, Deputy Prime Minister Lawrence Wong announced that the Government will increase the duration of government-paid paternity leave from two weeks to four weeks for eligible working fathers of Singaporean children born from Jan 1, 2024. Employers are not mandated to provide the additional two weeks of paternity leave, but they will be reimbursed by the Government if they choose to do so. The Government intends to make this policy mandatory in the future. The aim of the policy is to encourage fathers to participate more in raising their children and to promote paternal involvement in Singaporean society.
Six more days of Unpaid Infant Care Leave
Deputy Prime Minister Lawrence Wong announced that, effective from January 1st, 2024, each parent of a Singaporean child will be entitled to 12 days of unpaid infant care leave per year for the first two years of their child’s life. This represents an increase from the current allowance of six days. All parents who have been working with their employer continuously for at least three months will be eligible for this extended leave, which aims to provide more opportunities for parents to bond with and care for their newborn, or to make necessary caregiving arrangements.
Change in the calculation of tax relief for working mothers
Mr. Wong announced that the Working Mother’s Child Relief will be changed from a percentage-based relief to a fixed dollar relief for Singaporean children born or adopted on or after Jan 1 next year. Eligible working mothers will be able to claim S$8,000, S$10,000, and S$12,000 in tax relief for their first, second, and third and subsequent children, respectively. The fixed dollar relief will take effect in the 2025 Year of Assessment, for income earned in 2024. This modification will provide more government support for eligible lower- to middle-income working mothers, according to Mr. Wong. The Working Mother’s Child Relief for Singaporean children born or adopted before Jan 1 next year will remain unchanged, with a relief of 15% of the mother’s earned income for the first child, 20% for the second child, and 25% for the third and subsequent children. An eligible working mother can claim a total amount of relief of up to 100% of her earned income, subject to a total cap of S$50,000 per child, according to the National Population and Talent Division (NPTD).
Lapse of Foreign Domestic Worker Levy Relief
The National Population and Talent Division (NPTD) has announced that the Foreign Domestic Worker Levy Tax Relief will no longer be available from the Year of Assessment 2025. The current scheme allows eligible taxpayers to claim relief for twice the levy paid in the previous year for one migrant domestic worker. However, new policies aimed at directly supporting caregivers have since been implemented. These policies include the migrant domestic worker levy concession, which offers a monthly levy of S$60 for those who live with dependents under the age of 16, elderly, or persons with disabilities. Those who do not qualify pay a levy of S$300 per month for their first migrant domestic worker and S$450 per month for subsequent workers. According to the NPTD, the concessionary levy is a more targeted and progressive way of supporting families who need help with caring for their dependents, which is why the Foreign Domestic Worker Levy Tax Relief will be discontinued.