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Strong support for baby package


The Steering Group on Population said today (7 Sep 2004) that public feedback on the new parenthood package has been very positive on the whole, with many Singaporeans expressing strong support for the measures.

Responding to concerns that some families may become worse off with the new package, the Steering Group highlighted that the Government has put in place transitional arrangements to ensure that no Singaporean is worse off under the new package.

On whether some parents (such as stay-at-home mothers and employees not covered under the Employment Act) might not benefit from the package, the Steering Group assured that the package will benefit most families.

Responding to calls that the 1 Aug start date of some schemes be pushed back to encompass more families, the Steering Group said that even those whose children were born before 1 Aug 04 will get to benefit from many of the new schemes, such as childcare leave, the infant care subsidy, the foreign maid levy discount, and the revised tax breaks.

The Steering Group was responding to feedback received since the announcement of the new parenthood package by Minister Lim Hng Kiang on 25 Aug.

Singaporeans have shown keen interest in the new schemes, seeking clarification and voicing their views in numerous letters to the media, letters to PM Lee and members of the Steering Group on Population, calls to the Parenthood hotline (1-800-511-0000), and emails to the Parenthood website ( (Please see Annex A and Annex B for a breakdown of the queries received by the hotline and website respectively.)

Transitional tax rebates for children born in 2004

Parents whose second, third or fourth children are born in 2004 have asked whether they will be able to benefit from the previous tax measures.

As these couples may have planned to have babies in 2004 in expectation of the previous tax measures, the Government has put in place transitional arrangements to ensure that they are not worse off under the new tax regime.

Mothers whose second child was, or will be, born in 2004 will receive the higher of the Parenthood Tax Rebate or the Special Tax Rebate.

Mothers whose third or fourth child was, or will be, born in 2004 will benefit from the Further Tax Rebate on top of the Working Motherís Child Relief. These measures are transitional and will not apply for children born after
2004. IRAS will write to affected taxpayers to inform them of this transitional arrangement.

Singaporeans with substantial unused tax rebates have also asked whether the rebates can be used to pay for their children's educational expenses.

There is no longer any time limit on the utilisation of tax rebates with the new Parenthood Tax Rebate scheme. If tax rebate balances are not claimed by the time the parents retire, they cannot be converted into education grants because tax rebates are only meant to reduce the actual amount of tax payable; they should not be considered cash grants.

Parents can nonetheless use the Governmentís contributions to their childrenís Baby Bonus accounts to pay for childcare centre and kindergarten fees. Baby Bonus balances are eventually transferred into the childís Edusave account.

Benefits for Stay-at-home, Self-employed & Adoptive Mothers

Many have asked what benefits would apply to stay-at-home, self-employed or adoptive mothers. All these mothers benefit from most of the new measures, such as the enhanced Baby Bonus, maid levy discount, and subsidies on infant care fees.

For stay-at-home mothers, their working husbands can claim the Parenthood Tax Rebate. Naturally, stay-at-home mothers do not benefit from maternity or childcare leave or the tax breaks given to working mothers, as they do not work or pay income tax.

While the Government recognises the sacrifices made by non-working mothers, it also wants to ease the additional responsibility shouldered by working mothers. And as pointed out in the media by some Singaporeans, working mothers often miss out on some of the benefits of being a stay-at-home mother, such as the satisfaction of witnessing key milestones in their childís growth and development.

Self-employed mothers receive all Government-funded benefits, including tax benefits for working mothers and Government-paid maternity leave, except employer-paid leave.

Mothers of adopted children, in addition to the benefits mentioned in para 7, can receive 4 weeks of pay, up to $10,000, from the Government if their employers grant them leave to spend time with her newly adopted infant, provided the infant is Singaporean, and is younger then 6 months when the leave is taken.

Benefits for fathers

Some have asked why more benefits have not been extended to fathers, especially paternity leave.

Fathers play important roles in raising children. Working fathers can make use of the new Childcare Leave to spend time with their children until they turn 7, and can also enjoy the Parenthood Tax Rebate.

However, the experience of even the gender-neutral Scandinavian countries has demonstrated that not all fathers claim their leave, and not all employers in Singapore might be ready for longer paternity leave at this stage. The Government will monitor the situation and suggest areas for improvement in future.

Duration and Coverage of Childcare Leave

A common request was to extend childcare leave beyond 2 days and to parents of older children.

The current provision of 2 days per year for parents with children below 7 was arrived at after consultation with tripartite partners, balancing the needs of working parents and employers.

The legislation is meant to specify the minimum conditions which all companies can comply with. We recognize that the childcare leave provision may not be sufficient for some parents, but longer childcare leave will increase business costs and increase the workload of the co-workers who cover duties for those on leave. We encourage employers who have the resources, to give more than the statutory minimum.

Managers and executives are not covered under this part of the Employment Act. This allows them the flexibility to negotiate their desired set of employment terms with their employers.

Our experience is that by and large, companies extend the same leave benefits to executives as to rank and file employees in order to maintain consistency. We encourage employers to extend childcare leave to all employees including managers and executives as a matter of good HR practice.

Families that Missed the Start Date of Benefits

Many Singaporeans have appealed for the start dates of the new schemes to be extended to babies born before 1 Aug 2004.

Since there must be a start date for any scheme, it is inevitable that there will always be some group that misses out.

The 1 Aug start date was fair and reasonable since expectations of new benefits emerged only early this year. Children who are born prematurely but whose estimated date of delivery is on or after 1 Aug 2004 will also be considered for benefits.

Having clear start dates does not mean unequal opportunities for those whose children were born before the start date.

The parenthood package has been comprehensively designed to assist parents at different stages of their children's lives, so that even those whose children are born before 1 Aug 04 get to benefit from many of the new schemes, such as childcare leave, the infant care subsidy, the foreign maid levy discount and the revised tax breaks.

The Government also supports all citizen children by nurturing their development potential, especially through education. Government values every Singaporean child, regardless of when the child is born.

Treatment of Non-Citizens

Permanent Residents have also provided feedback, acknowledging that the new parenthood benefits should be reserved for citizens.

But some have asked why they are no longer entitled to the now-defunct Enhanced Child Relief. The new Working Motherís Child Relief is claimable only by mothers of Singapore Citizen children.

The Working Motherís Child Relief is part of the package of measures aimed specifically at building a core of Singapore Citizens for the next generation, and is therefore not available to parents whose children are not Singapore citizens.

Measures that provide more benefits for higher birth-order children, such as the Working Motherís Child Relief, should particularly be targeted at Singapore Citizen children.

It is necessary to make a distinction between Singapore citizens and PRs for certain benefits to recognise the role that Singaporeans play in nation building. This is why additional privileges are given to  Singaporeans, such as the right to vote, subsidies for buying HDB flats, asset enhancement programmes, and schemes such as the Economic Restructuring Shares and New Singapore Shares.

At the same time, the Government continues to value the contributions of Permanent Residents and foreigners living and working in Singapore through other schemes.

PRs and foreigners who are tax residents will continue to enjoy the Aged Parent Tax Relief, the Qualifying Child Relief, Handicapped Child/Spouse/Sibling Relief, and Foreign Maid Levy Relief, if they meet the standard qualifying conditions.

Childcare leave and the 12 weeks of maternity leave (without Government reimbursement)
also apply to them.

Have Children for Love and Fulfilment, not for Government Incentives

The new parenthood measures have been designed to support a wide range of family circumstances and practices.

It would be impossible for all families to benefit to the same extent, unless the new measures represent the lowest common denominator of family arrangements. Nonetheless, most Singaporean families will benefit in one form or another. No Singaporean will be worse off as a result of the new schemes.

Making Singapore a great place for families is a long term effort that goes beyond this package of measures.

The Government will bear in mind Singaporeansí feedback on the measures, and will refine our pro-family policies in future if necessary. While the current package of policies would be helpful to most families, the policies themselves should not be the motivating factor for having children.

Ultimately, parents should have children because they want to experience the priceless joy and emotional fulfilment that only raising a child can bring.

Issued by: Steering Group on Population

Source: Ministry of Manpower Press Release 7 Sep 2004


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15 September 2004