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5 Things About Baby Grants That Singaporeans Must Know

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Raising a child in Singapore requires a great deal of investment. A rough estimate of the cost of raising a child shows that you will need a few hundred thousand. That is a big sum that could help you buy another HDB! In order to help Singaporeans cope with the cost of raising children, a slew of baby grants were introduced and enhanced in the past decade.

If you are in the midst of planning for a child, make sure you know this baby grant guide inside out so that you don’t miss out on the baby grants that you are entitled to. There are five things that you definitely have to know about as a Singaporean parent.

1. Baby Bonus Child Development Account

What is the Baby Bonus Child Development Account?

The Baby Bonus Child Development Account (CDA) was introduced as a co-savings scheme for newborn children. This is part of the government’s initiative to help support parents in raising a child. Every Singapore citizen baby who is born on or after 24 March 2016 will be eligible for a CDA.

How does Baby Bonus Child Development Account work?

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Source: HeyBaby.sg

CDA comes with an initial balance of S$3,000. This is known as the CDA first step. Beyond the CDA first step, the government will make a dollar-for-dollar contribution for every dollar that parents save in the CDA. For example, if parents make a savings contribution for their first child, they will get a dollar-for-dollar contribution of up to S$3,000. All you have to do is to make the savings contribution 31st December on the year your child turns 12.

Related: 8 Tips to Create a Beautiful Baby Nursery on Budget

Where to apply for a Baby Bonus Child Development Account?

You can choose to open a CDA with UOB, POSB or OCBC. The application can be done online on the following websites (OCBC, UOB or POSB). Furthermore, you also get to enjoy a higher interest rate of 2% per annum.

Note that OCBC only offers the 2% interest rate on the first S$36,000 deposited in your child’s CDA. There is no cap for POSB and UOB’s CDA.

Where can you spend the money in your Baby Bonus Child Development Account?

The money in your child’s CDA can be used on any of your children. You can use the money to pay for Approved Institutions (AIs) that have registered with MSF under the Baby Bonus Scheme. The list includes:

  • Child care centres
  • Kindergartens and special education schools registered with the Ministry of Education (MOE) or Council for Private Education (CPE)
  • Early intervention programmes registered with the National Council of Social Service (NCSS) or Centre for Enabled Living (CEL)
  • Healthcare institutions licensed under the Private Hospitals and Medical Clinics (PHMC) Act
  • Premiums for MediShield or MediSave-approved private integrated plans
  • Pharmacies licensed by the Health Sciences Authority (HSA) for the purchase of approved healthcare items
  • Optical shops registered with the Accounting and Corporate Regulatory Authority (ACRA) for the purchase of approved optical appliances
  • Providers of assistive devices

Related: Here Are 5 Places to Get Baby Essentials Without Overspending

2. Baby Bonus Cash Gift

What is Baby Bonus Cash Gift?

Baby Bonus Cash Gift is a set of cash provided by the government to parents of newborn babies. Every newborn that is born on or after 1st January 2015 will be eligible for the enhanced Baby Bonus Cash Gift. The amount of Baby Bonus Cash Gift is dependent on the number of children that you have.

Related: A Comprehensive Guide to Raising Financially Smart Children

Child Order Born on or after 1 Jan 2015 (for each child)
1st & 2nd Child S$8,000 (inclusive of S$2,000 Baby Bonus Plus)
3rd & 4th Child S$10,000 (inclusive of S$2,000 Baby Bonus Plus)
5th and higher S$10,000 (inclusive of S$2,000 Baby Bonus Plus)

How is the Baby Bonus Cash Gift paid out?

Before you start thinking that you have a windfall from your newborn, the Baby Bonus Cash Gift is paid out over five instalments. The cash gift will be disbursed and across 18 months when your newborn hits different milestones.

Read also: How to start saving for your child’s college education

Time Amount of cash gift disbursed
First and Second Birth Orders Third and Subsequent Birth Orders
Within 3 weeks after joining the scheme S$3,000 S$4,000
When your child turns 6 months old S$1,500 S$2,000
When your child turns 12 months old S$1,500 S$2,000
Baby Bonus Plus – When your child turns 15 months old S$1,000 S$1,000
Baby Bonus Plus – When your child turns 18 months old S$1,000 S$1,000
Total S$8,000 S$10,000

3. Baby Bonus One-Stop Service

If you are unsure about how to apply for any of the Baby Bonus, don’t worry. You can seek assistance to apply for Baby Bonus through the Citizen Connect Centres. There are also Baby Bonus One-Stop Centres set up at the birth registration counters of hospitals to guide you on applying for Baby Bonus. You can approach the Baby Bonus One-Stop Centres at any of the following hospitals:

  • Gleneagles Hospital
  • KK Women’s and Children’s Hospital
  • Mount Alvernia Hospital
  • Mount Elizabeth Hospital
  • Mount Elizabeth Novena Hospital
  • National University Hospital
  • Parkway East Hospital
  • Raffles Hospital
  • Singapore General Hospital
  • Thomson Medical Centre

Read also: New Parents: 8 Things to Look out for in a Child Care Centre

4. MediSave Grant for Newborns

Every newborn will also receive an automatic top-up of S$4,000 into his/her MediSave account upon birth. This is courtesy of the government’s MediSave Grant for newborns. The grant is automatically credited into your child’s MediSave account once his/her birth is registered. Thus, there is no need for you to apply for the MediSave Grant.

Where can you use the MediSave Grant for your child?

More importantly, you need to know how the money in your child’s MediSave account can be used.

The MediSave Grant is meant to support your child’s healthcare needs. Thus, you can use the money in your child’s MediSave to pay for recommended childhood vaccinations, hospitalisation, and approved outpatient treatments. You can also use the MediSave to pay for your child’s MediShield Life premiums till he/she turns age 21. MediSave can also be used to pay for approved Integrated Shield Plan premiums to enhance health insurance coverage for your child.

Related: CPF Medisave: A Guide + 6 Things You Can Pay With It

5. Tax reliefs and rebates for parents

Apart from cash gifts from the government, you can also claim for tax reliefs and rebates as a parent.

Tax relief vs tax rebate

One thing parents have to note is the difference between tax relief and tax rebate. Tax relief allows you to reduce the amount of tax payable to IRAS by reducing your calculated earned income. This will then affect the tax bracket that you fall into. On the other hand, tax rebate is the amount of rebate you can receive from IRAS.

Earned Income = Total Income For The Year – Tax Relief

Total Income Tax Payable = Income Tax On Earned Income – Tax Rebate

Read also: Should You Pay Your Taxes with Your Credit Card?

How much tax relief can you claim?

Tax Relief Tax Relief Amount Note
Qualifying Child Relief S$4,000 You can only claim one of these two reliefs
Handicapped Child Relief S$7,500
Working Mother’s Child Relief
  • 1st Child – 15% of earned income
  • 2nd Child – 20% of earned income
  • Subsequent Child – 25% of earned income
  • Max cap = 100% of earned income
Only claimable if you are a working mother.

How much tax rebate are you entitled to?

Child Order Parenthood Tax Rebate (for child born from 2008 onwards)
1st $5,000
2nd $10,000
3rd $20,000
4th $20,000
5th and subsequent child $20,000 per child

Read also: 6 Ways to Reduce Your Taxes in Singapore

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