You will be able to explain what the Baby Bonus Scheme provides and how the Child Development Account works.
At Mei's office, a colleague back from maternity leave was asked how much the government gives for a baby, and she gave one figure. Another colleague gave a different one, remembered from his own child five years earlier. A third had read a news article about a recent Budget and quoted a third number. All three were sure, and none of them was talking about the same thing.
Support for parents in Singapore comes in several parts, paid in different ways into different accounts, and the amounts are revised from time to time. This lesson explains how each part works, so you know what to look up and where the money goes. You won't find amounts quoted here, because you will record the current ones yourself, with the date you checked.
The Baby Bonus Scheme is the main government support for families with a newborn child who is a Singapore citizen, and it comes in two parts.
The first is a cash gift. It is paid to the parents in instalments, into a bank account they nominate, once the birth is registered and they have applied. The money is yours to use as you see fit, and most parents use it towards the everyday costs from lesson 6.1, What a child costs in the first five years.
The second is the Child Development Account, which is the subject of the next section.
The amounts of both parts depend on the child's birth order, so a first child and a third child may receive different amounts. They have been changed in past Budgets, and the rules on who qualifies, such as citizenship and the parents' marital status, are set out with them. Check the current figures and conditions on the Baby Bonus pages of the Made for Families website, madeforfamilies.gov.sg, where you also apply.
The Child Development Account, or CDA, is a special savings account opened in the child's name at one of the banks appointed for it. It gets money from the government in two ways.
The first is a grant paid into the account without any deposit from you, often called the CDA First Step Grant.
The second is matching: when you deposit money into the CDA, the government adds the same amount, dollar for dollar, up to a cap, and anything you deposit beyond the cap is not matched. The cap depends on the child's birth order, and there is a time limit on when deposits can be matched. Check both on the Baby Bonus pages.
The money in a CDA can only be spent at approved institutions, for approved purposes. These include childcare and kindergarten fees, medical and dental bills, and some other costs for the child or siblings. You pay by using the CDA card or by asking the institution to deduct from the account. That matters for budgeting: CDA money is not locked away until the child grows up. It can pay for costs you would have paid anyway, which lesson 6.3, Use the CDA match without straining the budget, builds on.
Newborns who are Singapore citizens may also receive a MediSave grant, paid into the child's own MediSave account. It is meant for the child's healthcare costs, such as MediShield Life premiums and some medical bills. Check the current amount and conditions on the CPF Board website and the Baby Bonus pages.
Because this money goes into CPF rather than to you, it doesn't reduce your monthly spending directly. It does mean some early medical costs and premiums may not need to come from your budget.
Several other forms of support exist, and which apply to you depends on your family. Childcare subsidies from ECDA, covered in lesson 6.1, are the largest for many working parents. Tax reliefs and rebates for parents, such as the Qualifying Child Relief and the Parenthood Tax Rebate, reduce income tax and are listed on the IRAS website. Some employers offer their own benefits too.
Check each one before counting it. A relief that reduces your tax only helps if you pay enough tax to use it, and a subsidy that depends on working status changes if one parent stops working.
All of this support is set by the government and revised from time to time, often in the annual Budget statement. A figure from a friend, an old article or even your own first child may be out of date by the time your next child is born.
So for each type of support, record three things in your plan: the current amount from the official website, the date you checked it, and the conditions that apply to you. When you recheck the plan every six months, look again at these figures, especially after a Budget statement.
Mei and Daniel open a note in their goals sheet called "child support", with one line each for the cash gift, the CDA grant, the matching cap, the MediSave grant and the tax reliefs. Each line has an amount, a link to the page it came from and a date. Yours will start the same way, from the official pages rather than from memory.
Look up the current Baby Bonus cash gift, CDA grant and matching cap and record them with the date checked.
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