Friday, October 26, 2012

Singaporean Benefits (Part I) (Revision 02)

Revision 02: updated on July 29, 2014

If you are a Singapore Permanent Resident (SPR) and still in dilemma if you want to apply for Singapore Citizenship, this blog might give you a better picture. Let's jump into the topic. If you are a single, forget it, don't waste your time, stick to your own nationality. If you plan to have kids in Singapore, that makes much more sense to become a Singaporean especially for working class women. Nevertheless, below are the Singaporean benefits apply purely for us, you may use it as a reference.

(1) Lower rate of HDB Service & Conservancy Charges (S&CC)
As we all know, most of the town councils now increase the rates for the S&CC. Singaporean rate remain the same. Our 4-room HDB monthly rate now from normal rate of S$61.50 dropped to S$51.60. That's annual saving of S$118.80.

(Take not that in year 2011, Singapore government waived 2 months S&CC for Singapore 4-rooms flat household, but not this year, so on and off, you will hear government waiving some S&CC charges only for Singaporean household).

(2) Baby Bonus - Cash gift from Singapore government - one time S$4,000 for your 1st child.
It is free cash for you, transferred into your normal saving account. ( It is now raised up to S$6,000 for the 1st child starting from end of August 2012 and we are the first batch to get S$6,000 ! ).

3. Additional S$6,000 from Singapore government. It is a matching governemnt contribution in Child Development Account (CDA), provided that you also save S$6,000 in the account. There are only two banks offering the CDA accounts. Standard Chartered and OCBC bank. We chose OCBC bank simply because they have a sign-up booth at the hospital. 

OCBC CDA saving account gives 0.5% interest , if you keep $20,000 balance in the CDA account, the interest is 0.8%. Alternatively, I  upgraded my OCBC CDA account to OCBC CDA extra by committing S$50 per month GIRO into this account. This as well can earn higher interest from 0.5% a year to 0.8%. For a normal saving acccount, 0.8% interest a year is very high in Singapore, even higher than the fix-deposit in Singapore. :)

The money in the CDA account may be used by all your children to pay for: 1) Fees at Approved Institutions (AIs) which have registered with MCYS under the Baby Bonus Scheme:
a) Child Care Centres;
b) Kindergartens and special education schools registered the Ministry of Education (MOE) or the Council for Private Education (CPE);
c) Early intervention programmes registered with the National Council of Social Service (NCSS) or the Centre for Enabled Living;
d) Healthcare institutions licensed under the Private Hospitals and Medical Clinics (PHMC) Act;
e) Licensed pharmacies;
f) Optical shops; and
g) Assistive technology device providers

Sometimes, I see stupid complaints that they regret to bank in the money into the CDA account (as they can't take out the money until the baby turn 6 years old) and they can't wait to withdraw the money by then.

As for me, I wish the government will match the dollar-for-dollar saving up to S$12K for the first kid. A simple calculation shows that17 months of infant child care will easily dry up the CDA account balance of S$12K. Anyway, I will use CDA account for my baby vacinnation, doctor fees, infant care center, and thereafter child care center. I am also very grateful that my company allows us to claim our kids doctor fees of up to S$1,000 per year. That's very good policy indeed.

4. Parenthood Tax Rebate. For the first baby, Singapore government gives you one time tax rebate of S$5,000. You can use this S$5,000 to pay your yearly income tax. It is roughly FREE income tax for the next 3 years at least.... :) Not to mention, additional S$10,000 for 2nd kid , S$20,000 for 3rd kid. It is like the next 20 years, you don't have to pay a single cent for income tax! Why Singaporean doesn't want to have more kids ?

5. For the 1st child, mother can claim working mother's child relief (WMCR) which is 15% of the mother's earned income. Majority of the saving come from here, do your own maths and you will be shocked too. I can't imagine some can claim even up to 25% of the mother's earned income (if you have three children and above), the saving will be tremendous !

6.Tax matter also. Farther or mother of the child can claim qualifying child relief (QCR), which is S$4,000 per child. With WMCR (working mother's child relief) + QCR (qualifying child relief), a rough estimation shows mother can pay less tax per year up to S$1,600 - S$2,800 (depend on mother earned income). It will be at least 4 digits saving per year!    
                                            In order to understand the tax matters in Singapore, you have to know the income tax rates working in Singapore, this is the latest rate.    
                                          Let say we will work in Singapore until age 58, that's another 25 years. Why I use 25 years? It is because you can claim the WMCR & QCR rebate until the kid started his first career and have his own income. You can claim above two rebate even if the kid is studying full time at any university. The total cost saving from Singapore PR to Singaporean will be at least S$100,000 for one kid and the list is not done yet. I have yet to calculate the HDB housing benefits, children education fees and many more, such as, waiver of certain SP utilities bills, some one-time bonuses announced each years, etc.I shall keep track those benefits along the way.     In conclusion, it is a wise choice. For us la ! (to be continued... ) Wait a minute, I should calculate the saving for the second baby and third baby too !!! you will be surprised if you can save up to SGD 400,000 .. :)
Updated on July 29, 2014
Singapore government is also quite generous to give GST Voucher in terms of Utilities Save and Special Payment for you to trade off the utilities bill. For year 2014, for a 4 rooms HDB flat, you will get S$330. In addition, you also receive two months waiver of town councils fees. Not bad indeed.

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