Budget 2018 may have come and gone, but with it came a few new measures aimed at helping lower- and middle-income households. That’s good, but do you also know that these latest announcements are built on many existing initiatives?
Many readers are concerned about the increase in GST, but might not realise how some of the additional tax collection is given back through schemes to help those in need. In this article, we summarise a few key measures from this and earlier Budgets that help Singaporeans with a variety of expenses.
Meant to help offset GST expenses, the GST Voucher includes Cash, Medisave and U-Save payouts. The Cash and Medisave portions are disbursed in August each year while the U-Save portion is paid every quarter. How much support you receive depends on the eligibility criteria, which may include your income as well, annual value of your home, etc.
For an in-depth look at the GSTV and its different payouts, you can check out our full summary here.
What you might not be aware of is how the GST works in tandem with these vouchers. Bottom line: those who need the most help will get it. Here’s a simple summary of how it impacts Singaporeans:
There are a number of ongoing initiatives to help Singaporeans to purchase their own home. The most commonly known ones are the various CPF Housing Grants such as the CPF Housing Grant, Additional CPF Housing Grant and the Special CPF Housing Grant.
HDB also took steps recently to make the process of getting a home not only faster, having announced that flats will be built ahead of their sales launches to shorten waiting time, but also much easier, with the launch of the new HDB Resale Portal.
One of the most significant announcements from Budget 2018 has to be the enhancements to the Proximity Housing Grant (PHG). Not only has the amount been increased from $20,000 to $30,000 for couples buying a resale flat to live with their parents, singles can also benefit from up to $15,000 of grant depending on whether they stay with or near their parents.
In addition, the radius of proximity has been simplified from 2km or the same town, to 4km; giving most Singaporeans more flats to choose from to be eligible for the PHG.
Summary of Initiatives for Housing
|Improved accessibility for 1st timers||· Shorter waiting times for some BTO flats, with greater priority for first-time home buyers
· Quicker access to balance flats (Re-Offer of Balance Flats)
|Income ceiling for BTO flats||· Higher ceilings of up to $18,000 depending on flat type|
|CPF Housing Grants||· Up to $80,000 for BTO (including Additional CPF Housing Grant (AHG) and Special CPF Housing Grant (SHG))
· Up to $120,000 for resale flats (including CPF Housing Grant, AHG and PHG)
|Proximity Housing Grant (PHG)||· $20,000 for families buying resale flat to live with or near parents/children, and $10,000 for singles buying resale flat with parents
· Budget 2018: Higher quantum of $30,000 for families ($15,000 for singles) buying resale flat to live with parents/ children
· Budget 2018: $10,000 for singles buying resale flat to live near parents
|Pro-family Schemes||· Parenthood Priority Scheme, Parenthood Provision Housing Scheme|
|Fresh Start Housing Scheme||· Helps second-timer families with young children, who are currently living in public rental flats, own a HDB flat through initiatives such as grants, HDB concessionary loan and priority allocation|
Source: HDB website
Singapore is preparing for an increasingly aged population with the attendant rise in healthcare costs, and changes to ElderShield were one of the standout announcements from Budget 2018. The ElderShield Review Committee appointed by the Ministry of Health has recommended enrolling Singaporeans from a younger age. Although we may soon have to start paying ElderShield premiums earlier, this can help to ensure that annual premiums remain affordable.
Coupled with the construction of more general and community hospitals in recent years, and top-ups to funds such as the Senior’s Mobility and Enabling Fund, the aim is to ensure that healthcare are accessible to Singaporeans as well.
Summary of initiatives for Healthcare
|MediShield Life (MSHL) premium subsidies||· MSHL is a basic health insurance plan which helps to pay for large hospital bills and selected costly outpatient treatment
· Up to 50% structural premium subsidy provided to reduce premiums payable
· Up to 60% premium subsidy for Pioneers
|ElderShield premium subsidies||· The Government is reviewing the ElderShield scheme and will provide premium subsidies for lower- and middle-income Singaporeans to ensure that premiums are kept affordable|
|CHAS||· Subsidies for medical and dental care at participating GP and dental clinics|
|Polyclinic and Specialist Outpatient Clinics (SOC) subsidies||· 50% to 75% subsidy on services and medication, where applicable
· Additional 50% off their subsidised bill for Pioneers
|Intermediate and Long Term Care (ILTC) subsidies||· Up to 80% subsidy, depending on the type of ILTC services required|
|Hospitalisation subsidy||· Up to 80% subsidy, depending on ward choice|
Initiatives for Families and Raising of Children
There was significant focus on promoting childbirth and families. Some current initiatives include the Baby Bonus Scheme, which provides a cash gift of $8,000 for the first and second child, and $10,000 each for the 3rd child onwards.
In addition, parents can kickstart savings for their child with the Child Development Account (CDA). The Government will top up $3,000 in the CDA with the CDA First Step grant, and match savings in the CDA, up to $6,000 to $18,000, depending on birth order of children. The savings in your child’s CDA can be used for various things, including child care, kindergarten and special education school fees. It can also be used to offset costs from hospitals, pharmacies and more.
Summary of Initiatives for Singaporean Families (including Budget 2018 initiatives)
|Enhanced Baby Bonus Cash Gift||· $8,000 to $10,000, depending on birth order of children|
|Child Development Account (CDA)||· CDA First Step Grant of $3,000
· Total Government grant and matching contribution of up to $6,000 to $18,000, depending on birth order of children
|Medisave Grant for Newborns||· $4,000 for children born on or after 1 Jan 2015 to help parents defray child’s healthcare expenses|
|Parental leave schemes||· Maternity leave of up to 16 weeks, paternity leave of up to 2 weeks, shared parental leave of up to 4 weeks, childcare leave of up to 6 days|
|Expanded childcare capacity and more affordable fees (AOPs/POP scheme)||· 40,000 new full-day pre-school places by 2022 (30% more than the number of places available today)
· Monthly fee caps to keep fees affordable
|Childcare subsidies||· Basic Subsidy of up to $600/month for infant care and $300/month for childcare
· Additional Subsidy of $200 – $540/month for infant care and $100 – $440/month for childcare, depending on household income
|Marriage & Parenthood tax benefits||· Parenthood Tax Rebate, Qualifying/ Handicapped Child Relief, Working Mother’s Child Relief, Grandparent Caregiver Relief|
|Education subsidies||· Subsidised primary to post-secondary education|
|MOE Financial Assistance Scheme||· 100% subsidy of school fee and standard miscellaneous fees, free textbooks and school attire or $900 bursary, and transport credit/subsidy depending on the child’s education level
· School meal subsidies
|· Increase annual contributions from Jan 2019:
o From $200 to $230 for each primary school student
o From $240 to $290 for each secondary school student
|Bursaries in schools and IHLs
|· $350 – $4,000 bursaries for students in ITE, polytechnics and universities, depending on household income level
· Government loan schemes (tuition fee loan & study loan) for full-time diploma students and undergraduates studying in public-funded autonomous universities
· Edusave Merit Bursary:
o $200 – $500 depending on education levels.
o Budget 2018: Revised income criteria from $6,000 to $6,900 (Gross Monthly Household Income); from $1,500 to $1,725 – Gross Monthly Household Income Per Capita)
· Independent School Bursary
o 33% – 100% subsidy of school fee, depending on household income level and the child’s education level. Household with income not exceeding $2,750 or income per person not exceeding $690 will receive benefits similar to MOE Financial Assistance Scheme benefits.
o Budget 2018: Revised income criteria from $7,200 to $9,000 (Gross Monthly Household Income); from $1,800 to $2,250 – Gross Monthly Household Income Per Capita)
|More pathways to success||SkillsFuture movement to provide Singaporeans with opportunities to develop their fullest potential throughout life.|
Other Support Initiatives
Apart from the extensive number of measures across different living costs, the Government also announced several other measures to bolster financial support for Singaporean families.
Service & Conservancy Charges (S&CC) rebate
Extended for another year, around 900,000 Singaporean HDB households can expect to receive 1.5 to 3.5 months of S&CC rebate disbursed over the months of April 2018, July 2018, October 2018 and January 2019.
With the unexpected Budget surplus in 2017, the Government announced a special cash bonus of up to $300 for every adult Singaporean to share the fruits of Singapore’s development and performance with all Singaporeans.
The payout structure is as follows:
|Singaporeans aged 21 years and above in 2018
Assessable Income* for YA2017
|Up to $28,000||$28,001 to $100,000||Above $100,000|
Note: Individuals who own more than one property are eligible for SG Bonus of $100.
Support for Financial Planning
Apart from the financial support provided to Singaporean families, we at MoneySmart strongly believe that it’s extremely important to build a strong foundation in financial education. You know, feed a man to fish and all that. This year’s Budget announcement to pilot a new Financial Education curriculum at Polytechnics and ITE schools is certainly a big step in the right direction.
Furthermore, services at HDB and CPF Board will be enhanced to allow people easier access to information so that they can make better-informed decisions when they buy a flat or are approaching retirement.
What are your thoughts on the current initiatives to support Singaporeans? Share them with us here!