This article was originally published on 4 May 2018 and has been updated on 6 March 2021 with updated information on baby grants in Singapore. All information in this article is accurate as of the time of the update. If you know of any other baby grants, initiatives, or schemes not mentioned, drop us a message at [email protected]
Being a parent is one of the greatest joy a person can experience. However, it also comes with a lifetime of responsibilities. For many parents in Singapore, there will be days where you and your spouse be tested physically, emotionally, mentally, and of course, financially, as you care for your little ones.
Celebrating alongside you is none other than the Singapore Government. And with the fertility rate in Singapore at just 1.10 as of 2020, it’s not difficult to see why they are just happy.
Raising a child in Singapore is not cheap. After having spent anything between $5,000 to $15,000 from pregnancy to delivering the baby, parents can easily incur between $8,000 to $18,000 in costs just for raising their baby in the first year.
To help new parents with the cost of raising their babies in Singapore, there are quite a number of baby grants that the government has introduced.
In this guide, we will run through each of these baby grants that you and your little ones will be eligible for.
Find Out More
Baby Bonus Cash Gift
The Baby Bonus Cash Gift is a baby grant that basically gives cash to parents of newborn babies. How much parents receive depends on the birth order of their child. This ranges from $8,000 (1st and 2nd child) to $10,000 (3rd and subsequent children).
For the first and second child, parents will get a total of $8,000 in cash over a period of 18 months.
For the third and subsequent child, parents will get a total of $10,000 in cash over a period of 18 months.
In addition, there will be an additional one-off $3,000 Baby Support Grant for parents of Singaporean children born from 1 October 2020 to 30 September 2022.
Child Development Account
The Child Development Account (CDA) is part of the baby bonus scheme designed to help parents with the cost of raising their child. Money in the CDA account can be used to pay for educational and healthcare expenses at approved institutions.
CDA First Step
Announced in the 2016 Budget, all Singaporean children born from 24 March 2016 onwards will receive an initial $3,000 in their CDA.
On top of the First Step Grant of $3,000 for each child, the government will match any savings made to the child’s CDA on a dollar-for-dollar basis, capped at the following:
1st child: Dollar-for-dollar matching capped at $3,000 per child
2nd child: Dollar-for-dollar matching capped at $6,000 per child
Do note this is only applicable for children who are born or have an estimated date of delivery, on or after 1 Jan 2021. If a child is born before 1 Jan 2021, the maximum Government co-matching is $3,000.
3rd and 4th child: Dollar-for-dollar matching capped at $9,000 per child
5th child and beyond: Dollar-for-dollar matching capped at $15,000 per child
Because the CDA is a savings account, you will need to choose a bank for the CDA to be opened at. This can be done online. You can select from OCBC, UOB and POSB.
In our view, it’s better for you to choose a bank that you already have an existing internet banking relationship with. This will make it convenient for you to monitor the CDA, since the account will be tied to your name. This way, you wouldn’t need another internet banking login to access the account.
If you wish to sign up for both the Baby Bonus Cash Gift and the CDA, you can read our step-by-step guide to applying for the Baby Bonus Scheme.
Not everyone knows but all newborns will receive a $4,000 Medisave Grant into their Medisave Account. There is no need to apply for this grant as it will be automatically deposited into your child’s Medisave Account once the birth is registered.
Personal Income Tax Relief And Rebate
If you are already paying income tax, you will realise that having a child allows you to claim tax relief and tax rebate. Here’s a quick look at what you may be entitled to.
Qualifying Child Relief (QCR)
Tax relief of $4,000.
Handicapped Child Relief (HCR)
Tax relief of $7,500. Do note, you can only claim for either the QCR or the HCR.
Working Mother’s Child Relief (WMCR)
If you are a working mother, you can claim the WMCR at 15% of your earned income for your 1st child, 20% for the 2nd, and 25% per child for all subsequent children, with a maximum cap at 100% of your earned income. Do note that a personal income tax relief of $80,000 applies to the total amount of all tax reliefs claimed for each Year of Assessment
Parenthood Tax Rebate (PTR)
The Parenthood Tax Rebate (PTR) is a rebate that is given to parents who are paying income tax. Unlike tax relief, which only reduces a person’s assessable income, the PTR is a tax rebate, which means you are given this rebate based on the income tax that you are liable to pay. You and your spouse will share the PTR based on an apportionment agreed by both of you.
Any unutilised amount of PTR will be carried forward to offset against the income tax payable for subsequent years until the rebate has been fully utilised.
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