You will be able to count caregiving, housework and lost income when you decide what a fair split is.
When a couple splits household costs by what each person earns, the split counts cash and nothing else. It leaves out a large part of what keeps a household running: looking after children, caring for an ageing parent, cooking, laundry, and the admin of forms, appointments and bills. When one partner cuts paid hours to take on more of this work, a cash-only split misses what that partner now contributes. It also misses what they lose over the long term.
When a partner cuts paid hours to care for children or an ageing parent, the household gains real value. You pay no infant care fees for the hours that partner looks after the baby. A parent gets taken to appointments without either of you using a day's leave. Meals get cooked, forms get filled in and the home keeps running. The partner doing this work also frees the other partner to work longer hours, travel for work or go for a promotion. None of this shows on a payslip.
One way to value this work is to ask what it would cost to pay someone else to do it. If you priced the childcare, cooking and admin at what someone else would charge, the figure would not be small.
Courts count this work when a marriage ends. They take into account non-financial contributions, meaning the unpaid caring, cooking and running of the home that keeps a family going. Lesson 8.1, "How matrimonial assets are divided", explains how. It makes sense to count the same work while the marriage is going well too.
In Singapore, CPF contributions are paid on wages. When a partner's pay falls, both the employer's and the employee's contributions fall with it. If the partner stops working, contributions stop. Their CPF balances then grow more slowly, or not at all apart from interest on the existing balance, and their retirement savings fall further behind the other partner's every year.
The gap does not show for decades. It shows at retirement, as a much smaller CPF balance and a smaller monthly payout of their own. Lesson 5.3 of the course "The Singapore personal finance system", "How CPF turns into retirement income", explains how a CPF balance becomes a retirement payout. Check current contribution rates on the CPF Board website.
So a partner who cuts hours pays twice: once in take-home pay now, and once in retirement income later.
Hui Min and Daniel don't have a baby yet. Imagine it is three years from now and they do. Hui Min works at a hospital and goes back on a three-day week so she can be home the rest of the time. Her take-home pay drops from S$4,000 to S$2,400 (example figures, as are all the amounts that follow). Daniel's stays at S$6,000. Their shared costs stay at S$3,000.
Hui Min now spends about four days a week on childcare, cooking, laundry, paediatrician appointments and infant care waitlists. On paper her contribution to the household looks smaller, though anyone who has looked after a baby knows that is not the case.
Under a proportional split, each partner pays shared costs in proportion to their share of combined pay, so the lower earner pays less. Each partner's share is their pay divided by combined pay, multiplied by shared costs. Their combined pay is S$8,400 (S$6,000 + S$2,400). Daniel's share is S$6,000 / S$8,400, about 71.4%, so he pays about S$2,143 and keeps about S$3,857 (S$6,000 - S$2,143). Hui Min pays about S$857 and keeps about S$1,543 (S$2,400 - S$857).
This is fairer than an equal split because it already adjusts for her lower pay. It still leaves Hui Min with much less money of her own, and it does nothing about her CPF.
Start from the proportional split, then decide together whether to add anything on top. Couples use these options:
A monthly top-up to the lower earner's personal account, so both of you have a similar amount to spend and save on your own. A fixed amount into the lower earner's own savings or investments, held in their name, so their net worth keeps growing while their salary is lower. Cash top-ups to the lower earner's CPF under the CPF Retirement Sum Topping-Up scheme, which lets a person top up a spouse's CPF retirement savings. The giver may get tax relief if conditions are met. Lesson 4.3, "Keep the non-earning partner's own savings growing", covers this in more detail. A change to the split itself, for example the higher earner covering all of a new child-related cost such as infant care.
The CPF Board and IRAS set the conditions, amounts and limits for the top-up scheme and the tax relief, and these change from time to time. Check both websites before you rely on them.
There is no correct formula. What matters is that you both look at the unpaid work and agree how the split recognises it, or agree that it won't.
Any split is set for one moment in time and goes out of date when circumstances change. A partner moving to part-time work, taking unpaid leave, starting a business, losing a job or taking on the care of a parent all make it out of date. Write in a rule: whenever either partner's paid hours change, rerun the split and look again at the unpaid work.
It is easier to agree in advance what happens if one of you cuts back, while neither of you is tired or resentful. Hui Min and Daniel, with no baby yet, have agreed now what would happen if one of them cut back.
To start, look at your own household today. Who does the cooking, the cleaning, the caring for parents, the admin? Write it down for each of you, and think about how your split might take it into account.
Write down the unpaid work each of you does, and one way your split could take it into account.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).