Explain the reliefs for supporting your parents and other family members.
Many adults in Singapore help support a parent, a grandparent, or a spouse, brother or sister with a disability. IRAS gives tax reliefs for this support, and families often miss them or claim them badly. When two siblings claim for the same parent without agreeing, IRAS has to sort it out, which usually means letters and a revised assessment. Siblings need to talk before anyone files.
Parent Relief covers supporting a parent, grandparent, parent-in-law or grandparent-in-law who passes three tests. The IRAS page has the current details. The first is age, and it doesn't apply if the parent has a disability. The second is income: the parent's own income must be below a limit IRAS sets for the year. The third is support. Either the parent lives with you in the same household, or you spend at least a set amount supporting them during the year.
The amount depends on the support test. It is higher when the parent lives with you, lower when they live elsewhere, and higher again when the parent has a disability. So siblings can qualify for different amounts for the same parent: the sibling the parent lives with and the sibling who sends money each month may get different amounts. Several children can support one parent and share Parent Relief for that parent, but each child can't claim the full amount. The total claimed for one parent is capped, and IRAS sets out how a shared claim is divided.
Grandparent Caregiver Relief is for a working mother whose young child is looked after by a grandparent or great-grandparent who is not working. The mother must be married, divorced or widowed, and the child must be within the age limit IRAS sets. Only one person can claim it for a given caregiver, and it goes to the mother, so neither the grandparent nor the father can claim it. It rewards something different from Parent Relief, so both can apply to the same grandparent. Check the conditions for each one separately.
The reliefs for family members with a disability are separate reliefs for supporting a spouse, brother or sister with a disability, alongside the higher Parent Relief amount for a parent with a disability. Don't assume they are larger than Parent Relief. Check the current amount for each one on the IRAS page. They are among the reliefs people most often miss. Their conditions follow the same pattern: the family member's income, your support, and in some cases where the family member lives. If more than one of you supports the same brother or sister with a disability, you can share the sibling disability relief, split in a way you agree between you, so you need the same conversation you have about Parent Relief.
Shu Ting is a working mother with a baby, Wen. Her mother is 66, lives with Shu Ting's brother Darren in his flat in Tampines, and does not work. Shu Ting sends her a monthly allowance and pays for her specialist appointments, and on weekdays her mother looks after Wen so Shu Ting can go back to work. For years the two siblings vaguely wondered whether one of them should claim something for their mother, but the filing deadline passed each year before they talked about it.
When they did sit down, they used the practice table from lesson 1.4, "Rebuild your tax bill from scratch", with S$9,000 for a parent living with the claimant and S$5,500 for a parent living elsewhere (invented example amounts; the real figures are on the IRAS page).
Darren qualifies for the higher amount because their mother lives with him. His chargeable income is S$33,000 and his marginal rate is 3%. Claiming would bring him to S$33,000 - S$9,000 = S$24,000, still inside the 3% band, so he would save S$9,000 x 3% = S$270.
Shu Ting qualifies for the lower amount through her support, provided she meets the spending condition. Her chargeable income is S$92,000 and her marginal rate is 10%, so she would save S$5,500 x 10% = S$550. The smaller relief saves her about twice as much (S$550 against S$270) because her top rate is higher. The sibling with the higher marginal rate can save more even on the smaller amount, though in other families the result goes the other way, so run your own figures rather than guess.
They agreed that Shu Ting would claim Parent Relief, as long as she can show the spending, and that they would revisit the decision if Darren's income rose. Because her mother looks after Wen and does not work, Shu Ting also checked the Grandparent Caregiver Relief conditions on the IRAS page and added that relief to her list.
Lesson 5.3, "Share the load with your siblings", in the course "Money as a couple and a family", covers how siblings split the care and the costs. The tax decision belongs in the same conversation.
Each of these reliefs rests on facts IRAS can ask you to prove: that a parent lives with you, that you spent the required amount, or that a grandparent cares for your child. Keep bank transfer records for allowances, receipts for medical bills you paid, and proof of address. A standing transfer with a clear reference puts a year of support in one place in your bank statements. Shu Ting set one up to her mother for this reason.
Start with a list of everyone in your family you support. For each person, note which relief they could give and check each relief's conditions on the IRAS page separately. Note which amount each sibling qualifies for, such as living together or supporting from elsewhere. Then work out each possible claimant's saving as relief amount x marginal rate, using their chargeable income, and check whether the relief moves their income into a lower band. Agree with your siblings who claims, or how a shared claim is divided, before anyone files, and agree to revisit the decision if incomes change. Keep the transfer records, medical receipts and proof of address as you go.
For the activity, list everyone in your family you support and the relief each one could give, then write down who should claim it, using your marginal rates from lesson 1.4.
List the family members you support, the relief each one could give, and who in the family should claim it.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).