[UPDATED] Budget 2020 Highlights — 10 Key Announcements To Note
I have to admit — I’m quite impressed by the Budget 2020 announcement by Deputy Prime Minister and Finance Minister Heng Swee Keat. From what he shared, the government seems to be feeling dang generous. This is despite the turbulent times and uncertainties.
In fact, a deficit of $10.9 billion (2.1% of GDP) — the highest projected deficit in a decade — is expected for FY2020. Thankfully, an $18.7 billion surplus was accumulated over the current term of government, so we don’t have to dip too much into past reserves.
But that’s all very macro stuff that most of us couldn’t care less about. Sorry ah, it sounds very auntie but what I really want to know is whether GST is going to increase, and how much in payouts we’ll be receiving…
[UPDATED] 10 Key highlights of the Budget 2020 announcement
If you missed Mr Heng’s colourful announcement, here’s a quick overview of the key announcements that will affect most Singaporeans.
FYI, I’ve also compiled a list of the handouts we’ll all be receiving. Scroll to the bottom to see it.
Note: The Care and Support package GST Voucher payout sums were revised during the Supplementary Resilience Budget 2020 announcement. This article has been updated to reflect the new information.
1. GST to remain at 7% until 2021
Although not explicitly stated when, it was previously announced that the GST in Singapore will increase by 2 percentage points to 9% by 2025. This budget 2020 gave an update that this increase will not happen in 2020 or 2021.
A $6 billion package has already been planned and will roll out when the increase is implemented. This will offset at least 5 years of extra GST expenses, with Singaporeans receiving between $700 to $1,600 over 5 years.
2. [UPDATED] Up to $900 payout for Singaporeans
Under the Care and Support package to help Singaporeans cope with the sluggish economy and coronavirus outbreak, Singaporeans aged 21 and up will receive a one-time payment of up to $900.
|Assessable income for 2019||Care and Support Package payout (cash)||Additional cash for parents (>1 child 20 y/o and under) *|
|$0 to $28,000||$900 (previously $300)||+ $300 (previously $100)|
|$28,001 to $100,000||$600 (previously $200)|
|$100,001 and up (or owns >1 property)||$300 (previously $100)|
* Additional cash for parents explained in next point (#3).
3. [UPDATED] Extra payouts for families with children and elderly
Singaporeans with at least 1 Singaporean child (20 years old and younger) will also get an extra $300 cash (previously $100). For Singaporeans 50 years old and up, there will also be a $100 cash payout (previously PAssion Card top-up).
As part of the package, Singaporeans (21 years old and up) living in 1- or 2-room flats will also get grocery vouchers ($300 in 2020 and $100 in 2021).
4. Double GST voucher and U-Save rebates
Eligible households — most of us — will get 2X the regular GST voucher and U-Save rebates. Households with specifically 5 members or more will get extra (2.5X the usual rebate).
For HDB dwellers, the service and conservancy charge rebate will be extended for yet another year. Those eligible will receive 1.5 to 3.5 months worth in rebates.
GST Voucher-U-Save for FY2020
|HDB Flat type||Regular GST Voucher (U-Save)||U-Save Special Payment GST Voucher||Additional U-Save Rebate GST Voucher||Total U-Save GST Voucher for FY2020|
|All eligible households||Larger households|
|1- and 2-room||$400||+$400||+$200||$800 or $1,000|
|3-room||$360||+$360||+$180||$720 or $900|
|4-room||$320||+$320||+$160||$640 or $800|
|5-room||$280||+$280||+$140||$560 or $700|
|Executive and 3Gen flats||$240||+$240||+$120||$480 or $600|
5. Up to $1,000 in SkillsFuture credit top-ups
In bid to help Singapore’s workforce remain competitive and employable, Mr Heng announced that there will be a $500 top-up of SkillsFuture credits for all Singaporeans above 25 years old.
For mid-career switchers aged 40 to 60, there will be an extra $500, making it $1,000 in total. Unlike the regular $500 that has no expiry, the newly announced credits will be in by 1 Oct 2020 and will expire on 31 Dec 2025.
6. Matched Retirement Savings Scheme and Silver Support Scheme for needy seniors
Under the Matched Retirement Savings Scheme (2021 to 2025), eligible Singaporeans aged 55 to 70 who do not have the Basic Retirement Sum will have the government match every dollar of cash top-up made to their CPF retirement account. It will be capped at $600.
It’s worthy to note that the Basic Retirement Sum for those turning 55 years old will increase from $90,500 this year to $93,000 in 2021 and $96,000 in 2022.
For the seniors, there’s also the Silver Support Scheme (Singaporeans aged 65 and up). Quarterly payouts will be bumped by 20% and there will be a new tier introduced to include more Singaporeans.
This new payout tier will include seniors who were previously not eligible, with monthly incomes between $1,300 and $1,800.
7. Extra $100 for pre-university students from lower-income families
Under the Ministry of Education’s Financial Assistance Scheme, the amount given to lower-income students will be increased from $900 to $1,000.
There will also be an increase in transport subsidies for all students, as well as school meal subsidies for secondary school students.
Cash bursaries for needy students will increase to up to $200 a year, and ITE students from lowest-income families will get a full subsidy from 2020 too. In total, the government will spend about $198 million on funding bursaries for high education.
8. [UPDATED] The Jobs Support Scheme and Wage Credit Scheme
In light of the slowing economy, Mr Heng announced quite a few measures to help businesses keep afloat.
The most notable highlights are the Jobs Support Scheme (25% to 75% offset of employee wages until the end of 2020) and the Wage Credit Scheme (wage limit up to $5,000; government to co-fund 20% instead of 15% of wage increments).
9. [UPDATED] Government to help defray costs in key sectors hit by coronavirus outbreak
Mr Heng identified 5 key sectors affected by COVID-19: tourism, aviation, retail, food services and point-to-point transport services. These sectors will receive extra support via the Adapt and Grow initiative to help reduce costs, improve cash flow, and retain and reskill staff.
This includes tax rebates, rental waivers and more measures you can read more about it here: Budget 2020 — Measures to Cushion Impact of COVID-19 on Key Sectors
10. New Coastal and Flood Protection Fund, the HDB Green Towns Programme and more
Thankfully, amidst this coronavirus madness, the government has not forgotten the battle against climate change.
Mr Heng announced a new Coastal and Flood Protection Fund which will be set up with $5 billion for now. HDB will also strive to be more sustainable through a Green Towns Programme.
Additionally, there will be more incentives for Singaporeans to switch to electric cars and taxis. There will be a rebate of up to 45% on the additional registration for fully electric cars and taxis, starting January 2021 (for 3 years).
[UPDATED] Bonus: A complete list of cash, CPF and other payouts from Budget 2020
|For who?||Payout type||How much|
|Singaporean adults||Cash||$300, $600 or $900 cash payout for Singaporeans (21 y/o and above in 2020)|
|Singaporean adults||Cash||Doubled U-Save rebates through one-off GST Voucher (plus U-Save Special Payment for eligible households)|
|Singaporean adults||Rebate||1.5 to 3.5 months of Service and Conservancy Charges Rebate (extended for 1 year)|
|Families with kids||Cash||$300 for Singaporeans with at least 1 Singaporean child (under 20 y/o in 2020)|
|Large families||Cash / rebate||Additional GST voucher rebate for families with 5 or more members, plus up to $1,000 in U-Save rebates depending on flat type|
|Lower-wage Singaporeans||Cash||For Singaporeans on Workfare: $3,000 cash payout|
|Low-income seniors||Cash||+20% quarterly payout for bottom 20% (and slightly more) of Singaporeans over age 65, under Silver Support Scheme |
New payout tier to include seniors with $1,300 to $1,800 monthly income
|Seniors||Cash||$100 cash payout for Singaporeans aged 50 and above in 2020|
|Lower-wage Singaporeans||Grocery vouchers||$300 in grocery vouchers in 2020 and $100 in grocery vouchers in 2021|
|Singaporean adults||SkillsFuture credits||$500 SkillsFuture top-up for Singaporeans aged 25 and above in 2020 (validity 1 Oct 2020 to end 2025)|
|Mid-age Singaporeans||SkillsFuture credits||+$500 SkillsFuture top-up for Singaporeans aged 40 to 60 in 2020 (on top of the earlier announced)|
|Lower- to mid-income seniors (age 55 to 70)||CPF||Government will match every dollar of cash top-up made to their CPF Retirement Account (capped at $600 yearly)|
What do you think of the Budget 2020 announcement? Tell us in the comments below.