The next step for many newlyweds is family planning. But with soaring inflation and the current economic difficulty, having children may not always be on top of their list. After all, as the average cost of having a baby in Singapore can easily go into the tens of thousands, expanding a family unit without healthy reserve funds may seem imprudent. So, here’s your guide to the baby bonus or baby grant and more.
The Singapore government has launched several baby grants, such as the Baby Bonus Scheme and maternity tax relief, to help parents and working mothers defray the cost of raising children. If you are planning to expand your household, here are four baby grants that are readily available to new parents in Singapore.
Child Development Account
The Child Development Account (CDA) is part of the government-supported Baby Bonus Scheme in Singapore. It is a special savings account for Singaporean children comprising two components — a S$5,000 First Step Grant for babies born on or after 14 February 2023 (previously S$3,000) and a co-matching contribution that matches every dollar that you put into the account.
You can maintain the CDA up till 31 December of the year your child turns 12 and savings can be used for a variety of childcare, education and medical purposes at any of the approved institutions listed on the Ministry of Social and Family Development’s Approved Institution’s website.
Do note the government does impose limits to the co-matching contributions. For example, if you gave birth to your first child on 14 February this year, the dollar-for-dollar matching cap is at S$4,000. This means even if you deposit S$5,000 into the CDA, you will only receive a maximum of S$4,000 as a co-matching contribution for that particular child.
The following table offers an overview of the total amount you can receive in CDA for both the First Step Baby Grant and the co-matching scheme in Singapore.
| Birth order | ||||
| CDA First Step Grant (A) | Maximum Government co-matching (B) | Total Government contributions (A+B) | Total amount in CDA, including parents’ contributions to maximise co-matching | |
| First child | #S$5,000 ^S$3,000 |
#S$4,000 ^S$3,000 |
#S$9,000 ^S$6,000 |
#S$13,000 ^S$9,000 |
| Second child | #S$7,000 ^S$6,000 |
#S$12,000 ^S$9,000 |
#S$19,000 ^S$15,000 |
|
| Third and fourth child | S$9,000 | #$14,000 ^S$12,000 |
#S$23,000 ^S$21,000 |
|
| Fifth child and beyond | S$15,000 | #S$20,000 ^S$18,000 |
#S$35,000 ^S$33,000 |
|
| #refers to the amount provided for children born on or after 14 February 2023 ^ refers to the amount provided for children before 14 February 2023 |
||||
Baby Bonus Cash Gift
The Baby Bonus Cash Gift is the other part of the Baby Bonus Scheme introduced to help families mitigate rising costs in Singapore. After the announcement of the Singapore Budget 2023, the initial cash gift of S$8,000 to S$10,000 has been raised to S$11,000 to S$13,000 for children born on or after 14 February 2023.
A portion of the cash gift will be disbursed within seven to 10 working days of your child’s birth registration to help you pay for your newborn child’s expenses. The balance amount will be disbursed every six months until the child turns six and a half years old. To qualify for such baby grants, your child must be Singapore Citizen and you must be legally married to your spouse. A single or divorced parent will not be eligible to claim this cash gift.
| Birth order | Children born on or after 1 January 2015 | Children born on or after 14 February 2023 |
|---|---|---|
| First and second child | S$8,000 | S$11,000 |
| Third child and beyond | S$10,000 | S$13,000 |
Tax Relief and Rebates for Parents
There are a variety of tax reliefs and maternity grants for parents and working mothers in Singapore. One of the most accessible is the Parenthood Tax Rebate (PTR) which allows a tax rebate of S$5,000 for your first child, S$10,000 for the second and S$20,000 for the third and subsequent child.
For parents in a slightly more challenging position, they can also claim Qualifying Child Relief (QCR) or Handicapped Child Relief (HCR) for any mentally or physically handicapped children. The tax relief ranges between S$4,000 to S$7,500 per child. Working mothers, no matter if they are married, divorced or widowed, can also gain access to the Working Mother’s Child Relief (WMCR) which offers tax relief between S$8,000 to S$12,000 per child.
Medisave Grant
In case you are unaware, a CPF MediSave account is opened for each Singaporean newborn and a MediSave Grant of S$4,000 will be credited automatically to the account. You can choose to use the grant to fund your child’s healthcare expenses such as MediShield Life premiums and approved medical treatments.
If your child is non-Singaporean at birth, he or she needs to become a Singapore Citizen by two years old to receive the grant. However, the amount is subject to the Central Provident Fund Board’s (CPFB) discretion.
Conclusion
If you are looking forward to parenthood, the Singapore government is here to help! With so many enhanced baby grants and maternity tax relief packages, childcare expenses may be more affordable and less challenging than you think. Also, don’t overlook the importance of buying maternity insurance because it can offer tremendous financial support if unexpected medical challenges arise.
Need more information about maternity insurance in Singapore? Our research analyst has shortlisted some of the best maternity insurance plans for you.
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The article originally appeared on ValueChampion.
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