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Singapore Budget 2023: 11 Things That Will Affect Singaporeans Financially

New Cost-of-Living Special Payments of $200 to $400 for eligible Singaporeans

On 14 February 2023, Deputy Prime Minister and Minister for Finance, Lawrence Wong, delivered the Singapore Budget 2023. For Singaporeans awaiting his Valentine’s day’s love letter, the Budget provides much assurance that the Government is keenly aware of the concerns of Singaporeans and aims to address them.

Lower Income Singaporeans Will Receive $700 Cash In 2023 Under The Permanent GST Voucher Scheme

To cushion the impact of higher GST rates, the permanent GST Voucher scheme will be enhanced.

The GSTV-Cash component will be increased to $700 in 2023. This will increase to $850 from 2024 onwards. Currently, the GSTV-cash is only $500 for eligible lower income Singaporeans residing in homes with $13,000 or less in annual value (which all HDB properties fall under this threshold).

For eligible lower income Singaporean residing in homes with annual value above $13,000 and up to $21,000, the GSTV Cash component will be increased from $250 to $350 in 2023 and $450 from 2024 onwards.

* Note: To qualify for GSTV – Cash Special Payment, eligible recipients must be:

  • Singaporean aged 21 and above in 2022
  • Have an Assessable Income (AI) for Year of Assessment (YA) 2021 not more than $34,000
  • Reside in Annual Value (AV) of home (as indicated on NRIC) not more than $21,00
  • not own more than one property

Read Also: Annual Value (AV) Of Your Residential Property: Here’s How Its Calculated And Why It Matters

Cost-of-Living Special Payment of $200 To $400 And Other One-Off Support Under Assurance Package (AP)

To help Singaporean tide over the current period of higher inflation, the Assurance Package will be enhanced with another $3 billion top-up.

AP Cash: As previously announced, all Singaporeans aged 21 and above will receive the AP cash payout of $100 to $400 between 2022 to 2026 for a total of $700 to $1,600. This will be increased to $300 to $650 for a total of $700 to $2,250 over five years.

Cost-of-Living Special Payment: Eligible adult Singaporeans will receive between $200 to $400

Cost-of-Living Seniors’ Bonus: Eligible Singapore citizens aged 55 and above will receive between $200 to $300

CDC Vouchers: All Singaporean households will receive another $100 in CDC Vouchers. This will bring a total of $300 CDC Vouchers in January 2024.

U-Save Rebates: Eligible HDB households will also receive additional support with the doubling of U-Save Rebates over 3 disbursement tranches in 2023 for a total of up to $760 in U-Rebates.

Top-Ups To CDA/ Edusave/ PSEA for children: Families with children can also expect additional $400 top-up to their child’s Child Development Account (for children aged 6 and below) or $300 top-up to their child’s Edusave account or Post-Secondary Education Account (for older children).

Eligible First-Timer Families Will Receive Additional $30,000 To Purchase Resale Flats

To help genuine first-timer families start their families and build the first home, HDB will be giving more support for First-Timer families to buy a resale flat.

CPF Housing Grant will be increased by $30,00 for these eligible First-Timer families buying 4-room or smaller resale flats and by $10,000 for those buying 5-room or larger flats. This will take immediate effect and the additional grant amount will be credited to their CPF accounts from April 2023 onwards.

Baby Bonus Cash Gift Will Be Increased To $13,000

To increase support for families especially during the child’s early years, the Baby Bonus Cash Gift will be increased by $3,000 for all eligible Singaporean babies born from 14 February 2023.

Eligible first and second child will receive $11,000 and third and subsequent child will receive $13,000.

To help spread out the Baby Bonus, the disbursement will be restructured to pay out over a longer period of time, up to when the child turns 6 and half years old, all the way until the child enters primary school.

Additionally, to cover children born before 14 February 2023, the one-off Baby Support Grant of $3,000 given during the pandemic will be extended to cover all children born from 1 October 2022 to 13 February 2023.

Read Also: Complete Guide to Baby Grants in Singapore – Baby Bonus; CDA; Mediasave & Tax Relief

Eligible Singaporean Children Will Receive Additional $2,000 First Step Grant And Increased Government Co-Matching Cap

The First Step Grant is given to all Singaporean children born from 24 March 2016 onwards. This is automatically credited to their Child Development Account.

This First Step Grant will be increased to $5,000 for children born from 14 February 2023 onwards.

The government co-matching cap for CDA will also be increased up to a cap of $4,000 for the first child and $7,000 for the second child.

The existing caps will remain at $9,000 for third and fourth child and $15,000 for fifth and higher child.

Working Mother’s Child Relief Will Be Fixed At $8,000 For The First Child

Currently, working mothers enjoy tax relief on their earn income based on a percentage. From the Year of Assessment 2025, this will be changed to a fixed dollar relief for Singaporean children born or adopted on or after 1 January 2024. This will provide more support for eligible lower to middle income working mothers as eligible working mothers will claim the same amount of tax relief for a child in the same birth order regardless of their earned income.

For Singaporean children born or adopted before 1 January 2024, there will be no change to the Working Mother’s Child Relief claimable.

CPF Monthly Salary Ceiling Will Be Raised To $8,000 By 2026

To help Singaporeans save adequately for retirement, the CPF monthly salary ceiling will be raised from $6,000 to $8,000 in 2026.

This is to keep pace with rising salaries as the last time CPF salary ceilings was raised was in 2016.

To help employers and employees adjust to the changes, the CPF increases will be phased in over 4 years, starting from 2023.

CPF Contribution Rates For Senior Workers Will Be Increased

In line with the recommendations from the Tripartite Workgroup on Older Workers, the CPF contribution rates for senior workers have been increased and will continue to increase.

Employers will also be supported with CPF Transition Offset.

Read Also: Senior Worker CPF Contribution Rates And CPF Transition Offset Scheme: What Businesses Need To Know

Lower Income Platform Workers Will Receive CPF Transition Support

As part of strengthening protection of platform workers, these workers who are younger than 30 will be required to make increased CPF contributions. Platform companies will also be required to pay CPF contributions to these platform workers

To cushion the impact, the government will provide CPF Transition Support to lower-income platform workers who see an increase in their contribution rates for the first 4 years after implementation.

Minimum CPF Monthly Payout For Seniors On The Retirement Sum Scheme Will Increase To $350 A Month

Additionally, to strengthen retirement for seniors, the minimum CPF monthly payout for seniors on the Retirement Sum Scheme will also be raised to $350 a month.

Taxes Will Increase For Property, Cars And Tobacco

With immediate effect on 14 February 2023, Buyer’s Stamp Duty or BSD, will increase with higher marginal BSD rates for higher-value residential and non-residential properties.

For residential property, the portion of the value of the property in excess of S$1.5 million and up to S$3 million will be taxed at 5%. Those in excess of S$3 million will be taxed at 6%, up from the current rate of 4%.

The changes are expected to affect 15% of residential properties.

For non-residential properties, the value of the property in excess of $1 million and up to $1.5 million will be taxed at 4%. Properties in excess of $1.5 million will be taxed at 5%, which will be up from the current 3%. This is expected to affect 60% of non-residential properties.

Luxury cars will be affected by additional registration fee (ARF) rates.

Buyers of cars with open market value of more than S$40,000 will pay higher marginal ARF rates than they do today. For the highest open market value tier, the revised ARF rates will be 320%, up from 220% today. Preferential ARF rebates will be capped at S$60,000, to avoid providing excessive rebates to more expensive cars.

These changes are expected to affect the top one-third of cars by open market value. Buyers of cars with an open market value of S$40,000 or less will not be affected.

Additionally, the government will raise the excise duty on all tobacco products by 15% to discourage consumption. These taxes take immediate effect.

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