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 with recent changes to cash support and leave entitlements with surprising benefits for would-be dads!
Additional S$3,000 Baby Bonus
Started in 2000, the Baby Bonus scheme provides financial support that helps couples with the cost of raising children. In 2023, the cash gift was 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:
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 increased from two to four weeks. It’ll be mandatory for all employers to provide eligible dads with this additional two weeks of leave from 1 April 2025 and it’ll be reimbursed by the Government.
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.
At the 2024 National Day Rally speech, Prime Minister Lawrence Wong announced that parents will be granted an extra 10 weeks of shared parental leave, to be shared by both spouses. This replaces the current arrangement where husbands can share up to four weeks of their wives’ 16 weeks of maternity leave. The new initiative will begin with six weeks of leave for parents of babies born from 1 April 2025, with the full 10 weeks available a year later.
Each parent also has 12 days of unpaid infant care leave per year from 1 January 2024, an increase from six days previously. This entitlement effectively provides working couples with up to 30 weeks off in their child’s first year. Check out the table below for the full breakdown of leave available to parents. No more missing your little one’s firsts in life!
Raised savings cap for Child Development Account
One support initiative that 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 bank 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 and even medical insurance up to 12 years old. Unused funds will then be transferred to the Post-Secondary Education Account (PSEA).
Be sure to open a CDA for your child with your preferred bank 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 on 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.
Note:
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.
