At 20 months old, Olympia finally joined the PlayGroup level in preschool. As a first-time parent, Heartland Boy approached this milestone with equal excitement and trepidation. He was excited for Olympia to expand her social circle but also anxious on how she would cope in a vastly different environment. On the back of his head, he also realised that it meant expenses in the household would inevitably creep up with child care fees. This article explains Heartland Boy’s experience applying for child care subsidy in Singapore.
Government Child Care Subsidies
One of the key measures to arrest declining birth rates is the provision of childcare facilities and childcare subsidies. Daycare centres are critical supporting infrastructure for parents especially during a time when both are encouraged to remain active in the workforce. In 2019, it was announced that means-tested preschool subsidies will be further enhanced from 2020 onwards to make preschools more affordable. Heartland Boy still remembers watching the 2019 National Day Rally and cheering this piece of good news as he could be a potential beneficiary. With this announcement, it means that the Additional Childcare Subsidy is added on top of the Basic Childcare Subsidy.
Basic Childcare Subsidy
Firstly, the Basic Childcare Subsidy is a wide-ranging subsidy that does not take into account the income levels of the household. Instead, the amount of subsidy dispensed depends on the applicant’s working status. (Note that a working applicant is defined as a mother or single father who works at least 56 hours per month)
As shown in Diagram 1, a working applicant will be given a higher Basic Childcare Subsidy of $600 for full-day infant care while non-working mothers are only entitled to $150. The disparity is huge and the underlying message clear. As long as the child is a Singapore citizen and enrolled in a childcare centre licensed by the ECDA, the applicant qualifies and will be entitled to the Basic Childcare Subsidy. Even with the Basic Childcare subsidy, a full-day programme operated by anchor operators where fee is capped at $720 would still be $470 after adding GST. For the sandwich generation with multiple dependents, this is definitely no small sum. Therefore, more government intervention to arrest this social issue is required.
Additional Childcare Subsidy
As the name suggests, the Additional Childcare Subsidy is in addition to the Basic Childcare Subsidy. It came into effect from January 2020, in the same year that Olympia commenced preschool. The Additional Childcare Subsidy is a form of means-tested subsidy as the amount of subsidy levied is directly related to the household income. To be eligible for Additional Childcare Subsidy, the family must either:
- Have a gross monthly household income of $12,000 or below, or
- Have a gross monthly per capita income of $3,000 and below if they form a large family nucleus with 5 or more family members whereby there are at least 3 dependents who are not earning an income
For those who are interested to understand how the gross monthly household income and monthly per capita income are computed may refer to this CC_IC Explanatory Notes (from Jan 2020) that is available from the EDCA website.
As shown in Diagram 2, there are different tiers of subsidies and minimum co-payment requirements under the Additional Childcare Subsidy. As an example on how to interpret this table extracted from ECDA, a working mother that
- belongs to a household with gross monthly income of less than $3,000 and below or.
- belongs to a large household with gross monthly per capita income or $750 and below
- Basic Childcare Subsidy of $300 and
- A maximum Additional Childcare Subsidy of $467
- while co-paying a minimum of $3 in childcare fees
Another useful tip is to download the LifeSG (previously known as Moments of Life) mobile app to use the ECDA subsidy calculator to have an estimate on the amount of subsidy available to your household. Do also note that non-working mothers under specific circumstances or job-seeking mothers can seek special approval to apply for higher levels of subsidies than the prescribed limits. Likewise, families who wish to apply for the Start-Up Grant and/or Financial Assistance can approach their childcare centres to retrieve the relevant application forms.
Heartland Boy’s Experience Applying For Child Care Subsidy
As Heartland Boy was filling out the Subsidy Application Form, he was pleased to learn that he was not required to submit any supporting documents. He simply granted permission for ECDA to verify his household income with the CPF Board. He was notified of the outcome that his household will only be entitled to the Basic Childcare Subsidy but not the Additional Childcare Subsidy. He was not too disappointed as his child care fees are still manageable since they are capped at $800. (this is the maximum rate before subsidy and taxes for preschools under the Partner Operator Scheme) Besides, he can pay these fees from the Child Development Account (‘CDA’).
There would also be another review when the child transits from N2 to K1. Of course, he is hoping that he would remain ineligible for the Additional Childcare subsidy. However, with all the uncertainty wrecked by Covid-19 on the global economy, he would be thankful that such enhanced day care subsidies exist should he ever need to tap on them one day.