The idea of starting a family might be overwhelming for many Singaporean young couples. It’s a milestone for every couple, but it also comes with a host of mental, physical, and, of course, monetary difficulties.
Fortunately, the government has programs that can help families out financially. For the first-time parents in Singapore, you may take advantage of some benefits such as Baby Bonus benefits where you can receive up to S$14,000, including a cash gift of $8,000, a $3000 grant cash through the Child Development Account (CDA), and a lot more.
Due to falling birth rates across the country and the worldwide economic instability caused by Covid-19, a $3,000 worth of Baby Support Grant has been added to the Baby Bonus scheme. Considering the thought that this is just added on top of a Baby Bonus cash gift, which can reach up to $10,000, it certainly feels like a winning fortune.
Baby Bonus Scheme and Child Development Accounts help Singaporean citizens with the high cost of having a family. Learn more about who is qualified to receive it, and the application process in this detailed guide.
What is the Baby Bonus Scheme for?
The Baby Bonus Scheme is also known as the Child Development Co-Savings Scheme. The Baby Bonus is paid out in three parts: a cash gift, the CDA First Step, and dollar-for-dollar matching.
If you and your partner have decided to start a family, you may be eligible for financial assistance through the Baby Bonus Scheme. This program is a component of the Marriage and Parenthood Package, which offers complete assistance to help couples establish and raise families. The Baby Bonus Cash Gift and the Child Development Account(CDA) are the two main features of this plan.
You can expect the following payouts:
Cash gift of $8,000 to $10,000. As early as 8 weeks before giving birth, you can sign up for this scheme. The only catch is that you have to be a part of a nuclear family that the government recognizes to receive this money. Unfortunately, the cash gift is not available to unmarried women.
Child Development Account (CDA). When you open a CDA in your child’s name, the government will deposit a grant of $3,000. When a kid is born, a CDA account is immediately set up for them. Simply decide which of DBS/POSB, OCBC, or UOB you want to use to handle your account.
Dollar-for-dollar matching (up to $15,000, amount depends on birth order): the exact amount is determined by the child’s birth order). Each dollar you deposit into your child’s CDA will be matched dollar for dollar by the government. Limits are set based on your child’s birth order, and this continues until they are 12 years old.
Baby Support Grant: After enrolling in the Baby Bonus Scheme, you can expect to receive the Baby Support Grant one month later.
Here’s how much you may expect to receive from the Baby Bonus program depending on the sequence in which your children were born:
Baby Cash Bonus
The Baby Bonus is a monetary reward given to parents to help with the costs of raising a child. All children born on or after January 1, 2015, are qualified to receive the bonus money. The good thing about this is that you get to choose how the money is spent, so you can put it toward meeting your most pressing concerns. It takes 18 months from the time of application for the bonus cash gift to be distributed in full.
The cash donation will be dispersed according to the table below.
Children Development Account (CDA)
The CDA can be used to set aside money for the child’s healthcare and education costs at a predetermined location. Grants of S$3,000 will be deposited into savings accounts for every child born in Singapore after March 24, 2016. As a result, the government will double the money that each parent puts into the account, up to a certain amount. There’s a limit to how much can be matched, and it only lasts until the child reaches 12 years old.
After giving birth, you’ll be prompted to select a bank among DBS, POSB, OCBC, or UOB to handle the CDA account.
Read on for a full breakdown of CDA’s inner workings in the accompanying table.
Baby Support Grant
Each Singaporean child born between 1 October 2020 and 30 September 2022 is eligible for a one-time $3,000 Baby Support Grant. There are no limitations placed on its application.
Parents can choose to have their Baby Bonus money put into a CDA account with DBS, OCBC, or UOB, and the grant will be paid out to that bank. The payment will begin on April 1, 2021, or as soon as the participant enrolls in the Baby Bonus program.
How To Be Eligible?
To qualify, you and your partner must be married legally. Only children born in Singapore between October 1, 2020, and September 30, 2022 will be eligible for citizenship.
If your child was born before his or her official Estimated Date of Delivery (EDD), which is October 1, 2020, you will still be eligible to receive the grant. You can simply send a scanned copy of your child’s EDD certification from your doctor to msf babybonus@msf.gov.sg.
Application Process:
This is a detailed guide on how to acquire the funds.
Starting with having a baby is the first step. You probably won’t need us to explain this process. You can also receive the Baby Bonus if you adopt a child.
Second, sign up for the Baby Bonus program. Your child must be born in Singapore or have Singaporean citizenship, and a valid marriage certificate is required. Online registration for the Baby Bonus program can be done as early as eight weeks before the expected date of delivery. Verify that you qualify.
The next step is to report the birth of your child. In three to five business days, your child’s CDA will be activated automatically. A CDA account can also be established online.
To take the fourth step, start a college savings plan for your kid. If you do this before he turns 12, the government will match your donations up to a certain limit (based on birth order). It’s a great return on investment, as we know of no other means of generating a 100% return.
However, keep in mind that money in the CDA account is restricted and can only be used for childcare, kindergarten, hospitals, clinics, etc. that are approved by Baby Bonus. Don’t rush to cash out your Baby Bonus just yet if you’re worried about money.
How to use the CDA money
Keep in mind that the funds in your CDA can only be used at affiliated centers for qualified medical or educational expenses. I hope you made good use of your Baby Bonus!
Here are some suggestions for spending the CDA money:
Childcare/Preschool Education
If you need financial assistance with childcare or preschool tuition, you can apply and use the funds through the Child Development Account (CDA).
Special Needs
If you have a child with special needs, his/her assistive technology can be purchased with the use of CDA funds. The cash can be used to get mobility and hearing aids.
Insurance
You may use the CDA money to purchase insurance for your kid. Insurance policies may earn a better rate of interest than CDA fund accounts, and they protect the kid from any unforeseen medical expenses. It’s important to get a policy that’s approved.
Medical Expenses
Expenses for the child’s healthcare can be covered by the CDA, both for emergency care and for longer stays in a hospital.
Extra Singaporean Government Support & Benefits for Childcare
The baby bonus is just one of many subsidies and advantages available to Singaporean citizens. These are the other subsidies you may need:
Parenthood Tax Deduction
To qualify for the Parenthood Tax Credit (PTR), you must be a married, divorced, or widowed taxpaying citizen. Below is a listing of available tax rebates.
Medisave grants for newborns
The government deposits S$4,000 into the CPF Medisave account of every baby born in Singapore. The money can be ustilized toward things like MediShield Life premiums, advised immunizations, or appointments to certified outpatient clinics.
Subsidies for basic child care and newborn care
Subsidies are available to low-income families in Singapore whose children attend childcare centers that have been approved by the Early Childhood Development Agency. They are given a base subsidy of $300 for childcare and $600 for baby care.
Kindergarten fee assistance scheme
Funding for kindergarten tuition ranging from S$21 to S$170 is available for children from low-income households in Singapore. Families with annual incomes of S$3,000 or less per person are eligible for the subsidies.
Maid levy concessionary rate
The monthly concessionary levy of S$60 is available to families who employ a maid to care for a child. The minimum age for the child is 16.
As a conclusion, you can use the Baby Bonus prudently to enhance your child’s well-being, despite the fact that it was partly instituted to address Singapore’s low birth rate. The grants and subsidies can ease financial strain, especially during the pandemic.
Our breakdown of information will help you make the most of your Baby Bonus subsidies. These will allow you to save more money, so bolstering your attempts to provide for your child.