F. SUPPORTING FAMILIES, STRENGTHENING COMMUNITY
F.1. Budget 2015 also provides a package of support for families with children. In addition, as part of SG50, it provides strong encouragement for the spirit of giving in the community.
Support for Growing Years
Enhance Affordable, Quality Child Care
F.2. We have put in place substantial and enhanced subsidies for families with pre-school children. Today, lower-income families pay as little as $3 per month for child care, and $1 per month for kindergarten. We have also created many more affordable and quality pre-school places by expanding the Anchor Operator (AOP) scheme.
F.3. We will now introduce a new Partner Operator (POP) scheme to complement the AOP scheme. Child care operators on the scheme will have to commit to keeping fees affordable, developing their teachers, and enhancing quality. Parents will benefit from lower fees than the centres run by these Partner Operators currently charge, and higher quality care.
F.4. To illustrate, a household with median income whose child is enrolled in a centre with the median monthly fee of $900 today, currently pays $500 a month after receiving a subsidy of $400. If the centre comes onto the POP scheme, the household will pay around $100 less, and can look forward to quality improvements.
F.5. Currently the AOP scheme accounts for one-third of the pre-school sector, comprising both child care and kindergartens. Through a combination of the AOP scheme and the new POP scheme, we aim for about 50% of pre-school children to benefit from enhanced government support for more affordable and quality pre-school by 2020.
F.6. This is estimated to cost $250 million over five years.
F.7. The Minister for Social and Family Development will provide more details at the COS.
Top-up to the Child Development Account
F.8. In addition, we will help families pay for pre-school fees through a top-up to the Child Development Accounts (CDAs) of every Singaporean child aged six and below in 2015. Those currently without CDAs can open accounts and receive the top-up. The majority of children will receive $600. (See Table 2).
F.9. For a middle-income household, the top-up of $600 is sufficient to cover more than a month of child care costs after subsidies. 22
F.10. The top-up will cost $126 million and benefit 230,000 children.
Primary to Post-Secondary Education
F.11. While education is already heavily subsidised for Singaporeans, we will provide further help with education costs.
Waive Exam Fees for Singaporean Students
F.12. We will henceforth waive fees for national examinations (PSLE, GCE ‘N’, ‘O’, and ‘A’ levels) for Singaporean students in Government-funded schools.
F.13. Students and their families will save up to $900 for their national examinations from primary school to pre-university.
F.14. In addition, we will waive examination fees for Singaporeans enrolled full-time in our ITE and Polytechnics.
Top-up to Edusave
F.15. We will provide a $150 top-up to the Edusave Accounts of Singaporean students aged 7 to 16, on top of the annual contribution of up to $240. (Refer to Annex B-2.) Students above the age of 16 who are still in secondary school will also receive the top-up.
F.16. These are meaningful top-ups. For example, the $390 that will go into a secondary school student’s account this year will cover most of the fees for a short Outward Bound Singapore course.
F.17. This will benefit around 400,000 students.
Enhance Financial Assistance
F.18. We will also enhance the MOE Financial Assistance Scheme (FAS). Students on the FAS currently do not pay school fees and standard miscellaneous fees, and benefit from free textbooks and uniforms.
F.19. We will now include a transport subsidy that will cover at least half of students’ transport costs. This will cover public transport for all students, as well as school buses for primary school students.
F.20. We will increase the annual grants for school-based financial assistance for the next three years. This will give School Advisory and Management Committee more resources to provide further targeted assistance to needy students.
F.21. The initiatives will also be extended to our Special Education (SPED) schools, appropriately adjusted to meet their specific needs.
F.22. The Minister for Education will provide more details at the COS.
F.23. Our Self-Help Groups (SHGs) have been doing good work, helping children from needy families to progress. To enable them to do more, I will provide an additional $6 million grant to the SHGs over the next two years to support them as they expand their programmes and their reach.
Top-up to the Post-Secondary Education Account
F.24. We will provide a top-up to the Post-Secondary Education Account (PSEA) of Singaporeans aged 17 to 20 to assist households in saving for tertiary education. The majority will receive $500. (See Table 3.)
F.25. These top-ups too are meaningful. For students from lower-income families entering Polytechnic in 2015, the PSEA top-up, together with existing bursaries, will offset a full year of the diploma course fee. For ITE students, the top-up will cover more than one year of course fees.
F.26. This top-up will benefit 160,000 Singaporeans.
F.27. All in, these measures for students from the primary to post-secondary level will cost about $250 million over the next three years.
Fostering a Spirit of Giving
F.28. On the occasion of our Jubilee Year, we should take the opportunity to engage in giving to the causes that we feel matter to us as Singaporeans.
F.29. Charitable donations have risen significantly in recent years. Individual donations in 2014 reached an all-time high of $1.25 billion, or a 30% increase from 2008.23 Our enhanced tax incentives for donations have helped. In other words, the benefit hasn’t gone to the donors, but has led to more donations.
F.30. We recently announced an extension of our matching grant support for the Care & Share Movement till 31 Mar 2016, and the Government is providing an additional grant of $250 million. This doubles the total matching grant for Care & Share to $500 million. We will do more to encourage giving this year.
Enhanced Tax Deduction for Donations in 2015
F.31. We will increase the tax deduction from 250% to 300% for donations made in this Jubilee Year. We will also extend the 250% tax deduction for donations, which was to expire at the end of 2015, for another three years till the end of 2018.
F.32. Taken together with the Care & Share matching grant support, our measures effectively multiply every dollar that the community is giving. For every dollar that you donate in 2015, the Government is more than doubling it.24
Encouraging a Culture of Giving from Young
F.33. We want to encourage the spirit of giving and to raise the awareness of community causes in our students from young. As part of SG50, schools will work with their students to identify suitable beneficiaries as part of values-in-action education. The idea is for them to choose IPC charities – not only to raise funds for them, but to do projects with them in the community.
F.34. To support this effort, the Government will donate $20,000 to each school to use for the causes that they identify. This initiative will be extended to Polytechnics and ITE, for which the Government will donate $150,000 and $250,000 respectively on behalf of each institution.
Other Measures Affecting Singaporean Households
F.35. We will provide in this Budget some additional support to help Singaporean families with their costs of living. We will also take the opportunity to make several tax changes.
Enhancements to GST Voucher scheme
F.36. The GST Voucher (GSTV) – Cash is one component of the permanent GSTV scheme that we introduced in 2012. The other components are the GSTV – Medisave and GSTV – U-Save. Taken together, the GSTV ensures that the GST is not a burden for the lower-income group.
F.37. To help lower-income households with costs of living, we will be increasing the quantum for GSTV – Cash by $50 across the board from 2015 onwards (See Table 4). This means that eligible individuals will receive up to $300 in GSTV – Cash. This will benefit 1.4 million Singaporeans.
F.38. We will also provide our seniors aged 55 and above with a GSTV – Seniors' Bonus in 2015 to help them with their daily expenses. This will effectively double the GSTV – Cash that they usually receive. They will therefore get up to $600.
F.39. Furthermore, for those aged 65 and above and living in HDB flats, we will give an additional $300 this year. They will therefore get a total of $900. This will be helpful to these older seniors while we work out the details and implementation of the permanent Silver Support scheme, which will begin next year. This additional payment in the meantime will cover a larger group than Silver Support.
F.40. Taken together, these measures will cost Government an additional $385 million in 2015.
Service and Conservancy Charges Rebates
F.41. To provide further support for cost of living, we will provide one to three months of Service & Conservancy Charges (S&CC) rebates. 1- and 2-room HDB households will receive a total of three months of rebates for this year, while 3- and 4-room households will receive two months of rebates. This will cost the Government $80 million.
Personal Income Tax Rebate
F.42. To help middle-income taxpayers, I will provide a Personal Income Tax Rebate of 50%. I have set the cap at $1,000 so as to ensure that the benefits go mainly to the middle and upper-middle income groups. This will be for the YA 2015 (i.e. for income earned in 2014).
F.43. 1.5 million individuals will benefit from the tax rebate. It will cost the Government $717 million.
Changes to Indirect Taxation
F.44. In this Budget, I will make a few changes to our indirect taxes to support two objectives. First, I will take further steps to reduce vehicular carbon emissions and promote a greener living environment. Second, I will provide support for middle-income families in their cost of living by reducing the foreign domestic worker concessionary levy.
Carbon Emissions-based Vehicle Scheme
F.45. In 2013, we introduced the Carbon Emissions-Based Vehicle Scheme (CEVS) to encourage the take-up of carbon-efficient vehicles.
F.46. We are encouraged by the results after two years - over 65% of the cars registered in 2014 qualified for CEVS rebates whilst about 5% paid the surcharge.
F.47. I will extend the CEVS for two years, from 1 July 2015 to 30 June 2017, with some refinements to encourage a further shift to greener cars. The details are in the Annex, and will be discussed by the Minister for Transport at the COS. (Refer to Annex A-6.)
F.48. Related to this, we will enhance the Early Turnover Scheme (ETS) to further encourage the replacement of older commercial vehicles with greener vehicles that meet higher emission standards from August 2015. The Minister for the Environment and Water Resources will provide more details at the COS.
Petrol Duty and Road Tax Rebate
F.49. To encourage less car usage and reduce carbon emissions, I will raise petrol duty rates which have remained unchanged since 2003. The duty rates for premium grade petrol will be increased by $0.20 per litre, and intermediate grade petrol by $0.15 per litre. With falling oil prices, pump prices after the petrol duty changes would remain lower than the levels in the last two and a half years. These changes will take effect today, and yield about $177 million a year.
F.50. To ease the transition to the higher petrol duties, I will provide a one-year road tax rebate of 20% for cars, 60% for motorcycles, and 100% for the small number of commercial vehicles using petrol. The road tax rebate will offset about two-thirds of the impact of the petrol duty change on intermediate grade petrol for a typical car. The one-year road tax rebate will cost Government $144 million.
Foreign Domestic Worker Levy Concession
F.51. We will reduce the foreign domestic worker concessionary levy from $120 per month to $60 per month. We will also extend the concessionary levy to households with children aged below 16, up from below 12 today. These changes will provide greater support for middle-income families who are taking care of their children and elderly parents.
F.52. The reduction will take effect from 1 May 2015, and will benefit 144,500 households.
F.53. This will cost about $125 million per year.
F.54. The annual savings from the reduced maid levy amount to $720. The savings will be much larger than the rise in petrol duties if the same family also drives a car. (For a 2,000 cc car, the extra cost will be about $360 a year on average.25 For a 1,600 cc car, the cost will be lower at about $230 a year on average.26)
Enhanced Support for Singaporean Families
F.55. Let me illustrate how our policies will add up for Singaporean families. The Annex provides examples (Refer to Annex B-3), but I will summarise here the additional support that we are providing for our middle-income families, to help them meet their aspirations and deal with the cost of living.
a. First, we are supporting families with children and elderly:
i. Expanding affordable and quality child care through our schemes for Anchor Operators and new Partner Operators;
ii. Lowering the cost of schooling by removing examination fees permanently, and through additional top-ups to the CDA, Edusave and PSEA; and
iii. Halving the foreign domestic worker concessionary levy from now on.
b. Second, besides families with children and elderly, we are providing stronger support for those who have started working or are in the middle of their careers to pick up new or deeper skills and progress in their careers. They will enjoy SkillsFuture Credits, the new SkillsFuture Awards, and significantly enhanced subsidies for educational and training courses;
c. Third, we are also helping them enhance their savings for retirement, through the increase in the CPF salary ceiling, higher contribution rates when they are in their 50s, and Extra Interest in the later years;
d. Fourth, they will receive support for costs of living: both from the reduced maid levy and educational costs I mentioned earlier, and from the income tax and S&CC rebates.
e. Fifth, many families will also benefit from the enhanced support for our seniors, through the extra GSTV – Seniors’ Bonuses this year. Some of their parents may also benefit from the new Silver Support Scheme that starts next year.
Last updated on 24 Feb 2015