I tend to avoid taking cabs these past few weeks. Not only because I can’t afford the taxi fare, but also because taxi drivers are rather fond of engaging you in political discussion even though the General Elections are long over. One thing we Singaporeans love to gripe about is how we feel like we’re not treated like citizens in our own country. But how true is that complaint, really? We look at just how much Singapore Citizens are currently being subsidised.
Singapore Citizens are the only ones who can apply for a new HDB BTO flat. Even if you’re a Permanent Resident, you can’t apply for a new flat unless you’re applying with a spouse (whether married or engaged) or children who is a Singapore Citizen. As you know, new flats in Singapore are heavily subsidised. Even without including further subsidies from grants, a new 4-room HDB flat in Tampines will cost $281,000. In contrast, a resale 4-room flat in the same neighbourhood will probably cost around $425,000 or about 50% more than a new flat.
But since I mentioned housing grants, did you know that Singapore Citizens qualify for up to $100,000 when buying a new or resale flat? The exact amount depends on their average monthly household income, with lower-income families naturally receiving higher subsidies.
Simply put, Singapore Citizens not only are eligible for subsidised housing, they are also eligible for grants to further lower the property prices. On the other hand, Singapore PR and foreigners are not only subject to the full price of property, they are also penalised with Additional Buyers’ Stamp Duty, which adds anything from 5% to 15% of the purchase price. 15% of a resale flat that costs $425,000 is $63,750. That’s not a small sum.
Whether it is just for a simple checkup at the polyclinic, or an urgent surgery at a local hospital, the healthcare costs for Singapore Citizens are subsidised more than Permanent Residents, while foreigners end up having to pay in full.
For example, a general visit to a polyclinic will cost an adult Singapore Citizen around $11.80. The same visit would cost between $22.50 and $30.80 for a Singapore PR, around 2 times more. A foreigner would be charged about $45. And this is just for a general polyclinic visit!
When it comes to hospital wards, a Singapore Citizen would be charged about $75 a day for a Class B2 ward (not including treatment, of course). This goes up to about $130 a day for a Singapore PR, and as much as $235 for a foreigner. Working backwards, we can say that Singapore Citizens get subsidised $160 a day for a Class B2 ward.
For day surgeries, Singapore Citizens are eligible for subsidies of 65% of outpatient fees at public hospitals, while Singapore PRs are eligible for 40%. Foreigners, of course, aren’t eligible for any subsidies.
In addition to their healthcare subsidies, Singapore Citizens also have the opportunity to pay a significant portion of their medical bills using Medisave. This portion of your CPF savings not only earns up to 5% interest each year, but often can be used to fully fund your medical bills, meaning your cash flow won’t be too affected during a medical emergency.
This may come as a surprise to some of you, but Singapore Citizens don’t pay a cent in school fees for Primary School education, and only $60 a year for Secondary School education. That means, for the first 10 years of your child’s school education, it will only cost around $240, or an average of $24 a year.
Compare this to the cost of an international student, especially after the recent education fees increase announced last week. Starting next year, they will have to pay $550 per month for Primary School education, and $800 a month for Secondary School education. Over 10 years, that can come up to $39,600 for Primary School and $38,400 for Secondary School, for a total of $78,000. That’s an average of $7,800 a year!
Singapore Citizens therefore are being subsidised a hefty average of $7,776 a year for Primary and Secondary School Education. Let’s not even talk about the difference in fees for tertiary educational institutions.
Needless to say, each Singapore Citizen is receiving at least $100,000 in education subsidies in their lifetime.
4. Leave Benefits
Did you know that being a Singapore Citizen also gives you government-paid childcare leave benefits? More accurately, if your child is a Singapore Citizen under the age of 7, you and your spouse are entitled to at least 6 days a year of childcare leave (subject to employment conditions). If your child is not a Singapore Citizen, you are only entitled to at least 2 days a year.
If your newborn baby is a Singapore Citizen, mothers get at least 16 weeks of government-paid maternity leave (subject to employment conditions). If your newborn is not a Singapore Citizen, you’re only entitled to 12 weeks of maternity leave.
Fathers are only eligible to government-paid paternity leave if the child is a Singapore Citizen.
Not everyone is convinced that it’s financially sound to have a child in Singapore, but for those who do take the plunge, it might be a good idea to get Singapore Citizenship for your child. Since most of these leave benefits are paid for by the government and not by your employer, they would be considered subsidies due to parents of Singapore Citizens.
5. Tax Rates and Rebates
This may seem obvious to some, but it’s important to note that Singapore Citizens generally pay less income tax compared to non-residents. Singapore Citizens are taxed on a progressive rate that charges higher rates the more you earn. A Citizen that earns $40,000 a year will be taxed $550 before rebates, or about 1.3%. In comparison, a non-resident that earns $40,000 a year will be taxed a flat rate of 15%, or $6,000.
That’s a $5,450 difference. Singapore Citizens and Permanent Residents are also eligible for tax reliefs that are not available to non-residents such as the CPF cash top up relief.
Tax relief is also given to members of society who meet “specific social and economic goals”. I’m referring, of course, to married parents of children who are Singapore Citizens. These are eligible for the Parenthood Tax Rebate. There are three ways to be eligible. If the child was born while you were married, then claim the tax rebate in the year of birth. If you get married before your child reaches 6 years old, then claim the tax rebate in the year of marriage. If you adopt a child younger than 6 years old and while you’re married, then claim the tax rebate in the year of adoption.
Do you know of any other subsidies that Singapore Citizens qualify for? Share them with us.
Keep updated with all the news!
Get the latest personal finance tips and tricks delivered to your inbox!
We promise never to spam you!