With the rising cost of living, having children might be the furthest thing on the minds of young couples. Between funding a home, planning a wedding and sorting out your protection needs, is there even enough cash left to support a kid? The government attempts to tackle these issues in the recent 2023 Budget announcement with specific changes to cash support and leave entitlements with surprising benefits for would-be dads!

 

 

Additional S$3,000 Baby Bonus

 

Started in the year 2000, the Baby Bonus scheme provides financial support that helps couples with the cost of raising children. This year, the cash gift has been raised from S$8,000 to S$11,000 per child for the first and second child born from 14 February 2023. The cash gift for third and subsequent birth orders has similarly increased from S$10,000 to S$13,000.

 

Couples will receive the first cash payout at birth and every six months thereafter. View the full breakdown in the table below:

Table 1: Breakdown of how the Baby Bonus cash gift is disbursed | Source: Ministry of Social and Family Development

 

 

These changes could help defray some of the costs of having a child, especially expenses during pregnancy and delivery. A survey by Dollars and Sense revealed that a normal delivery (without interventions) costs an average of S$1,200 at a Class C ward in a government hospital but can go up to S$13,000 at a private hospital. Consider supplementing the cash gift with additional maternity coverage to cover any pregnancy complications.

 

 

Increased government paid paternity leave

 

Would-be dads like me will be pumped to know that paternity leave has been expanded from two to four weeks. While the additional two-week leave entitlement is currently offered on a voluntary basis and will be reimbursed by the Government, Finance Minister Lawrence Wong has confirmed it will be made mandatory for all companies in due course.

 

With more than half of fathers in Singapore now taking paternity leave, the increase is a welcome move that reinforces the importance of parental involvement, from dads as well as mums, as a norm in our society.

 

Unpaid infant care leave has also been doubled from the current six to 12 days per year for both parents from 1 January 2024. This new leave entitlement effectively provides working couples up to 26 weeks off in their child’s first year. Check out the table below to see full breakdown of the leaves available to parents. No more missing your little one’s first steps!

Table 2: Breakdown of the parental leave available to parents | Source: Made for families

 

 

Raised savings cap for Child Development Account

 

One support initiative new parents might not know about is the Child Development Account (CDA) which is a special savings account for your child’s needs. Parents can open a CDA at DBS/POSB, OCBC or UOB banks to receive the First Step Grant which has been increased from S$3,000 to S$5,000.

 

Subsequent savings deposited into the CDA will also be matched dollar for dollar by the government up to S$4,000 for the first child and S$7,000 for the second child, an increase of S$1,000. These funds can be used for pre-school and healthcare fees up to 12 years old. Unused funds will then be transferred to the Post-Secondary Education Account (PSEA).

 

Be sure to sign up with your preferred bank for your child as soon as possible so you don’t miss out on these additional funds!

 

 

Are you ready to be a parent?

 

With all these enhancements, the cost of starting a family is more manageable. The government has also announced support for first-time home buyers with an increase in CPF Housing Grants for resale HDB flats alongside additional ballots for Build-To-Order (BTO) applicants from specific groups.

 

Ultimately, it falls to you to plan your best life. Unsure where to get started? Click here to speak with one of Singlife’s friendly financial adviser representatives and chart your path to financial freedom today.

 

 

^Notes:

^{1. Source: Ministry of Health, Singapore, “Fee benchmarks and bill amount information”, accessed on 16 January 2023.}

^{2. Source: Made for families, Singapore, “Parental Leave and Benefits”, accessed on 16 January 2023.}