In order for your children to receive the gift of financial freedom, you as the parents of your beautiful child must first take advantage of all the various windfalls, bonuses and gifts that the Government is giving to your child.
Singapore is experiencing a shortage of births as our society moves from third world to first world in all economic growth, immigration growth and ever rising costs of living.
Your child when born will face a tough, competitive and challenging world. Make no mistake about that. But you can better prepare yourself and your child financially to take on Singapore Inc by availing yourself to the BABY BONUS SCHEME.
How much is the Baby Bonus?
The Ministry of Community, Youth and Sports administers this scheme which essentially is a cash grant for your first child, and a cash gift plus matching grant for your second to fourth children.
This scheme is available to the first to fourth child born after 1 August 2004.
Cash Gift
You as the parents will receive Singapore Dollars $3,000 for the first and second child paid over 4 instalments of $750 each. For the 3rd and 4th child, you will receive cash gift $6,000 over 4 instalments of $1,500 each. The table below shows the cash gift schedule for 1st to 4th child.
Child Development Account
For your second child onwards, the Government provides a matching contribution of up to $6,000 for your second child and up to $12,000 for your third and fourth children. This is done by contributions to your child's Children Development Account (CDA). Please note that there is NO CDA for the first child.
You may use the CDA for the following purposes as specificed in the Baby Bonus website:
"1) Fees at Approved Institutions which have registered with MCYS under the Baby Bonus Scheme:
- Child care centres;
- Kindergartens and special education schools registered with the Ministry of Education (MOE);
- Early intervention programmes registered with the National Council Social Service (NCSS); and
- Healthcare institutions licensed under the Private Hospitals and Medical Clinics (PHMC) Act.
2) MediShield or Medisave-approved private integrated plans. "
The matching by the Government also takes place up to 31 December in the year your child turns 6 years of age.
Should your child not have unused balance in his or her CDA account, the Government says that,
"this will be transferred to his or her Post-Secondary Education Account (PSEA) in the year your child turns 7 years of age. You may continue to contribute to the PSEA until your child turns 18 years of age and receive the Government's matching contributions subject to the combined CDA/PSEA matching contribution cap of up to $6,000 for the second child and up to $12,000 each for the third and fourth child. The funds in the PSEA can be used to pay fees for post-secondary education in Singapore for your child and his or her siblings. The PSEA is under the purview of the Ministry of Education (MOE). More information on MOE can be found at MOE's website at http://www.moe.gov.sg/"
That means you can do the matching up to age 18 for your child.
You will receive the forms and instructions at the hospital where your child was delivered or you can read the FAQs given in the Baby Bonus website.
Do your sums before having a baby!
Singapore's high costs of living mean that having a baby shouldn't be decided purely on the amount available for baby bonus! You should consider the lifetime costs over 20 years as a minimum. In addition, having a baby requires enormous support mechanisms available from parents, parents-in-laws, domestic helpers etc besides the parents. It is not easy to bring up a child in Singapore.
A child is a gift. Cherish your gift. ;-)
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