How Singapore Budget 2023 Affects My Family Financially

The dust on Singapore Budget 2023 has finally settled down with many commentaries already published. Even with these helpful articles, I admit that it can be difficult to remember and grasp the slew of new policies announced. That is why I tried out the Budget Calculator (it’s really intuitive, do try it out) developed by Gov.tech to find out how much goodies I will be getting. This is how Singapore Budget 2023 affects my family financially.

Heartland Boy’s family situation

We are a dual-income family with 1 child and another baby on the way. Based on the median household income in 2022, I would categorise my family as upper-middle income. In terms of property ownership, we currently own and stay in a 3-room HDB flat. Finally, all 3 of us are Singapore citizens. Based on this demographic profile, here’s what my household can expect to receive.

Assurance Package

With reference to Diagram 1, the cash payout my household will receive in 2023 under the Assurance Package is $550. Since this is pegged to assessable income, I feel that Singaporeans earning more than $100,000 p.a. definitely require considerably less help than those in other income brackets. Therefore, I am all for the government allocating less payout to the high-income earners. I plan to make a donation to a IPC when I receive my payout. Its killing 2 birds with 1 stone as I get to help the less fortunate and enjoy tax relief at the same time.

In addition, one of us will also be entitled to a Cost-of-Living Special payment of $200 cash to be disbursed in June 2023.

GST Vouchers (Service and Conservancy Charge & U-Save Rebates)

From Diagrams 2 & 3, our household will be receiving 2.5 months of S&CC rebate and $680 worth of U-Save vouchers. This will help to offset our town council and utilities expenses.

CDC Vouchers

I am a big fan of the Community Development Council (‘CDC’) vouchers as I get to utilise them at my favorite hawker and neighbourhood stalls. I managed to fully utilise $100 worth of CDC vouchers in 2021 and I am still working my way through the 2022 CDC vouchers this year. In Jan 2024, my household will be receiving another $300 worth of CDC vouchers.

MediSave Top up

Olympia’s MediSave account will also receive $150 top-ups each in Feb 2023, 2024 and 2025. That’s a total of $450 in MediSave topups which will earn 5% interest since she is entitled to the additional 1% bonus interest rate. Her integrated shield plan is paid from my MA so this top up from the government will compound for a long time.

Child Development Account Top-Up

Olympia will also be receiving $400 cash top up into her Child Development Account (‘CDA’). The entire amount will be used to offset her childcare school fees.

Working Mother Child Relief

Because our children are born before 2024, Heartland Girl will continue to be entitled to apply a percentage to her assessable income to derive the tax relief under the Working Mother Child Relief (‘WMCR’) scheme. In other words, she is unaffected by the switch to a fixed amount for mothers with babies delivered in 2024 onwards.

My perspective is that if the same group of people have been saying that more baby bonus money does not motivate them to bring a child to this planet, then the stance should remain the same when it is flipped around. Applying the same logict, moving the Working Mother Child Relief from a percentage of income to an absolute number should also not affect the said group’s decision on becoming parents.

Baby Bonus and CDA

As we are welcoming our second child this year, our Baby Bonus will be $11,000 cash instead of $8,000 that was the case before Budget 2023. This will be disbursed over a period of 6.5 years.

In addition, the CDA First Step Grant will be increased from $3,000 to $5,000. Co-matching cap for 2^nd child will be increased by $1,000 to $7,000. I plan to max out the 2^nd child’s CDA as soon as possible so that the contribution from the government also starts to earn 2% interest rate. Therefore, our 2^nd child may start with $19,000 in her CDA but experience tells me that this will be exhausted in no time.

Overall, I must say that I am pleased at the policies rolled out in Budget 2023, especially the extra financial incentives on Baby Bonus. The timing is extremely opportune for my family.

Published on 25 Feb 2023

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