Tan Kin Lian / Columnist
I find the incentives implemented during the past years to encourage procreation (i.e. Singaporeans to have more children) to be unnecessarily complicated and discriminatory.
Each time that the Government implemented a new package to address the failure of the past packages, there will be loud howls of protests from parents who missed out.
The parents who fall on the right side of the cut-off date were delighted and thanked the Government for its generosity. This breeds a culture of selfishness, where each Singaporean thinks about his or her personal benefit, rather than what is fair to everybody in society.
Marriage & Parenthood Package 2008
To make it easier for the people to understand the myriads of complicated incentives, the Government published a full page advertisement in a Sunday paper. I am now more enlightened about the incentives but have many more questions.
First, let me list down the headings in this package
Enhanced tax benefits
Qualifying Child Relief (QCR)
Handicapped Child Relief (HCR)
Enhanced Working Mother’s Child Relief (WMCR)
Parenthood Tax Rebate (PTR)
Enhanced Baby Bonus
Baby bonus cash gift
Baby bonus Child Development Account (CDA)
Enhanced Subsidies for Center-based Care
Infant Care Subsidy for Singaporean infants aged 2 to 18 months
Childcare Subsidy for Singaporean children aged above 18 months to below 7 years old
Here are my observations.
> We have to introduce five abbreviations, i.e. QCR, HCR, WMCR, PTR and CDA, as each incentive needs a detailed explanation on eligibility and other details. In due course, we will see a few more abbreviations created for the other incentives. (Perhaps, this is why Singaporeans are so fond of using all kinds of abbreviations which confuse foreigners).
> The incentives vary according to the child order, the date that the child is born, the citizenship status of the parent and probably other factors that I may not be aware of.
I now come to my questions.
1. Who is eligible for the enhanced tax incentives? Do they apply to citizens, permanent residents, professional pass holders and work permit holders?
2. What are a Qualifying child and a non-Qualifying child? Some of the incentives appear to apply to a qualifying child and other incentives apply only to a qualifying Singaporean child.
3. How is the child order determined for parents who have a child from the earlier marriages and the current marriage?
4. Does the incentive apply to a legally adopted child? It seems to imply that the parent can claim some incentives but not other incentives.
5. Some incentives apply to a child born on or after 1 Jan 2008, while other incentives apply to a child born on or after 17 August 2008. Are there other cut-off dates that apply to other incentives, but not specifically mentioned?
6. What is a Baby Bonus? Is this a cash payment to the parent? Or, is this money that is locked up in an account to be used for specific purposes only?
7. What is a Baby Bonus CDA? Is this money that is locked up in an account to be used for specific purposes only? Is there a requirement for the parent to make a co-payment into this account?
8. What are a working mother and a non-working mother (as this status affects the subsidy for infant care and childcare)? How is part time work or casual work treated?
It is wonderful that the advertisement includes a hotline (1800 233 2229) for the public to call and seek further clarification.
I suspect that the hotline will be deluged with calls from anxious parents enquiring about their eligibility and entitlements. I hope that the hotline staff can cope with the potential volume of calls.
My wish list
Let me now say how I would do things differently, if I were the person in charge (which I am not).
I would adopt the following principles in designing the incentives:
> treat each tax payer fairly (i.e. regardless of citizen status)
> treat each child equally
> simplify the incentives
Enhanced Tax Benefits
My wish: This will apply to each child within a certain age range, regardless of when the child was born and the birth order of the child. As this incentive is linked to tax, it should be given equally to all tax payers, regardless of citizenship status.
Enhanced Baby Bonus
My wish: As this is a cash payment, it should apply to a Singaporean child born on or after a certain date. This applies to a child that is considered to be Singaporean at birth.
I will remove the requirements for the parent to co-pay into a Child Development Account, so that the child will not be discriminated against, if the parents are too poor to make the co-payment.
If there is the fear that the poor parents will bear more children, then this Baby Bonus can be restricted to a certain number of children in each family.
Enhanced Subsidies for Center-Based Care
My wish: The same subsidy should be given, regardless of the working status of the mother. In my view, the non-working mother should be entitled to a higher subsidy, as they do not have an income, but I do not wish to argue this point.
The working mothers already enjoy the enhanced tax benefits (which are quite generous, especially for those at the higher income). There is no need to make a further discrimination here.
I believe that the failure to achieve the goal of encouraging family to have more children is partly caused by the complicated and discriminatory incentives adopted in the past.
Some parents had privately told me previously that they decided to hold back having an additional baby and to wait for new incentives to be announced, so that they will not miss out by being on the wrong side of the cut-off date. This type of delay must have a negative impact on the birth rate.
The Marriage and Parenthood Package 2008 continues the same complicated and discriminatory approach, although the benefits are now more generous and costly to the nation.
I hope that future packages will be designed to be fairer and non-discriminatory. A child is a child.
Tan Kin Lian also blogs at http://tankinlian.blogspot.com/ .