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Among developed nations, Singaporeans pay one of the lowest goods and services taxes (of 8%), which is levied on all goods brought into Singapore or purchased locally. Estimated to contribute $12.8 billion in 2022, GST is an important component of the government’s revenue.
This revenue is important as it allows the Government to provide good healthcare, education, public transport and infrastructure, as well as subsidies for all Singaporeans. As our population ages, our healthcare costs will rise in order to take better care of our seniors. Other costs, such as pre-school education, are also expected to rise in the years ahead as Singapore continues to invest in providing quality and affordable education for the young.
In order to meet rising costs for public goods and services, the government will need more revenue. One measure was to raise the GST to 8% from January 2023 and eventually to 9% in 2024.
No doubt, the higher GST will affect Singaporeans. To cushion this impact, the government first announced a $6 billion Assurance Package (AP) in Budget 2020. This was enhanced by another $640 million to $6.6 billion, as announced in Budget 2022.
Here’s what you need to know about the Assurance Package, including how much you will get and when.
#1 What Is The Assurance Package For GST
The Assurance Package for GST comprises:
– Assurance Package Cash (AP Cash)
– Assurance Package MediSave,
– GSTV – Cash (Seniors’ Bonus)
– Additional GSTV – U-Save rebates, and
– Community Development Council (CDC) Vouchers.
Combined, these offsets will benefit the majority of Singaporean households by covering at least five years’ worth of additional GST expenses. For lower-income households, they will cover about 10 years’ worth of additional GST expenses.
#2 Singaporeans (21 And Above) Will Receive A Total AP Cash Of Between $700 And $1,600 From 2022 To 2026
Beginning in December 2022, all Singaporeans aged 21 and above will receive a minimum of $100 and up to $400 per year for the next five years. In total, about 2.9 million Singaporeans will receive between $700 and $1,600 by 2026.
Qualifying criteria take into account your assessable income and property ownership. You can refer to the table below for a detailed breakdown of the payout you stand to receive.
Source: Ministry of Finance – Assurance Package (AP) Cash
#3 Singaporeans 20 Years And Below Or 55 years and Above Will Receive MediSave Top-Ups Of $150 every February between 2023 and 2025
Singaporeans aged 20 and below, or 55 and above, will receive MediSave top-ups of $150 per year in the month of February from 2023 to 2025.
This amounts to a total of $450 across three years, which will support about 2 million eligible Singaporean children and seniors for their healthcare needs.
Source: Ministry of Finance – Assurance Package (AP) MediSave
#4 Lower-Income Singaporean Seniors Will Get Additional Cash Of $600 To $900 Through GSTV – Cash (Seniors’ Bonus) From 2023 To 2025
The GSTV – Cash (Seniors’ Bonus) is an additional cash support measure for lower-income Singaporean Seniors to cope with the increased GST cost. To qualify, Singaporean citizens must:
i) be aged 55 and above,
ii) earn no more than $34,000,
iii) own no more than one property, and
iv) the annual value of their home should not exceed $21,000.
They will receive cash of between $200 and $300 each year from 2023 to 2025.
This will benefit about 850,000 lower-income senior Singaporeans, who will receive a total of between $600 and $900 in the next 3 years.
Source: Ministry of Finance – GSTV – Cash (Seniors’ Bonus)
#5 Eligible HDB Households Will Receive $330 to $570 Of Additional GSTV – U-Save From 2023 To 2026
About 950,000 HDB households stand to benefit from the additional GSTV – U-Save rebates under the Assurance Package from 2023 to 2026. These rebates are on top of the regular GSTV – U-Save that households can expect to receive.
For instance, a 1-and 2-room HDB flat type will receive the most rebate ($95) from the additional GSTV – U-Save in January 2023, while an Executive/Multi-generation flat type will receive a rebate of $55 in 2023.
In total, households whose members do not own more than one property will receive between $330 and $570 in Additional GSTV – U-Save for the next 3 years.
Source: Ministry of Finance – Additional GSTV – U-Save
#6 Every Singaporean Household will receive A Total Of $500 In Community Development Council (CDC) Vouchers
The Government is giving two rounds of CDC Vouchers to all Singaporean households in 2023 and 2024. For Tranche 2023, each household will receive $300 worth of CDC Vouchers, where $200 is part of the AP for GST announced at Budget 2022 and an additional $100 in CDC Vouchers as part of the $1.5 billion support package announced in October 2022.
The 2023 CDC Vouchers can be spent at participating hawkers, heartland merchants and supermarkets. For more information on the CDC Vouchers Scheme, visit vouchers.cdc.gov.sg.
Source: Ministry of Finance – CDC Vouchers
#7 Cost Of Living Support Extended To Singaporeans And Households
While AP is meant to relieve Singaporeans of the additional GST expenses, the government also introduced the Household Support Package in Budget 2022 to specifically assist Singaporean families in managing the rising cost of living (COL) pressures through various cash support schemes and other financial subsidies. The Government rolled out further support for COL pressures through the two $1.5 billion Support Package in June 2022 and October 2022.
Stay Tuned To Budget 2023
Understandably, with the high inflation and the higher GST, Singaporean households will have to cope with rising expenses. To help Singaporeans, especially the vulnerable groups, even more, the government announced in November 2022 that it would boost the Assurance Package further by $1.4 billion from its current $6.6 billion to $8 billion.
More details on what these measures are and who they might benefit will be revealed in this year’s Budget 2023 on Tuesday, 14 February 2023, so do stay tuned to the Budget!
