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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.
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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.
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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.
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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.
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The Steering Group was responding
to feedback received since the announcement of the new parenthood package by
Minister Lim Hng Kiang on 25 Aug.
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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 (www.family.gov.sg).
(Please see Annex A
and Annex
B for a breakdown of the queries received by the
hotline and website respectively.)
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Transitional tax rebates for
children born in 2004
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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.
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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.
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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.
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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 Mother’s 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.
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Singaporeans with substantial
unused tax rebates have also asked whether the rebates can be used to pay for
their children's educational expenses.
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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.
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Parents can nonetheless use the
Government’s contributions to their children’s Baby Bonus accounts to pay
for childcare centre and kindergarten fees. Baby Bonus balances are eventually
transferred into the child’s Edusave account.
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Benefits for Stay-at-home,
Self-employed & Adoptive Mothers
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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.
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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.
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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 child’s growth and development.
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Self-employed mothers receive all
Government-funded benefits, including tax benefits for working mothers and
Government-paid maternity leave, except employer-paid leave.
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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.
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Benefits for fathers
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Some have asked why more benefits
have not been extended to fathers, especially paternity leave.
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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.
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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.
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Duration and Coverage of
Childcare Leave
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A common request was to extend
childcare leave beyond 2 days and to parents of older children.
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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.
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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.
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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.
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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.
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Families that Missed the Start
Date of Benefits
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Many Singaporeans have appealed
for the start dates of the new schemes to be extended to babies born before 1
Aug 2004.
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Since there must be a start date
for any scheme, it is inevitable that there will always be some group that
misses out.
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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.
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Having clear start dates does not
mean unequal opportunities for those whose children were born before the start
date.
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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.
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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.
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Treatment of Non-Citizens
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Permanent Residents have also
provided feedback, acknowledging that the new parenthood benefits should be
reserved for citizens.
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But some have asked why they are
no longer entitled to the now-defunct Enhanced Child Relief. The new Working
Mother’s Child Relief is claimable only by mothers of Singapore Citizen
children.
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The Working Mother’s 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.
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Measures that provide more
benefits for higher birth-order children, such as the Working Mother’s Child
Relief, should particularly be targeted at Singapore Citizen children.
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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.
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At the same time, the Government
continues to value the contributions of Permanent Residents and foreigners
living and working in Singapore through other schemes.
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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.
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Childcare leave and the 12 weeks
of maternity leave (without Government reimbursement)
also apply to them.
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Have Children for Love and
Fulfilment, not for Government Incentives
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The new parenthood measures have
been designed to support a wide range of family circumstances and practices.
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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.
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Making Singapore a great place for
families is a long term effort that goes beyond this package of measures.
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The Government will bear in mind
Singaporeans’ 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.
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Ultimately, parents should have
children because they want to experience the priceless joy and emotional
fulfilment that only raising a child can bring.
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Issued by: Steering Group on
Population
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Source: Ministry
of Manpower Press Release 7 Sep 2004
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