Singapore launches family supportive policies and cost-of-living measures

Mayumi Soh of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, said: “Rising costs of living poses a serious concern for many Singaporeans amidst global uncertainty, and the Singapore government’s Budget 2023 seeks to introduce measures to alleviate some of these concerns.”

According to the Budget announcement, Singapore’s government-paid paternity leave will be doubled from two weeks to four weeks from 1 January 2024. In the meantime, employers will retain the option to grant the two extra weeks of leave voluntarily and any additional leave granted will be reimbursed by the government accordingly. Unpaid infant care leave will be increased from six days to 12 days a year for each parent in the child’s first two years.

The baby bonus cash gift will also be increased by S$3,000 for each eligible Singaporean child born from 14 February 2024 – the bonus will be paid every six months until the child turns six-and-a-half years old. The Child Development Account (CDA) First Step Grant will be increased from S$3,000 to S$5,000.

The Central Provident Fund (CPF) monthly salary ceiling will be increased in stages from S$6,000 to S$8,000 by 2026. From September, it will be raised from S$6,000 to S$6,300 and will subsequently increase to S$6,800 from January 2024; S$7,400 from January 2025; and S$8,000 from January 2026. The CPF annual salary ceiling will remain the same at S$102,000. The minimum CPF monthly payout for seniors on the Retirement Sum Scheme will be raised from S$250 to S$350 effective from 1 June.

The government will also provide a one-time cost-of-living special payment to Singaporeans aged 21 and above in 2023 who have an annual assessable income below S$100,000 and who do not own more than one property. Singaporeans who earn S$22,000 each year will receive S$400; those who earn between S$22,000 and S$34,000 will receive S$300; and those who earn over S$34,000 and up to S$100,000 will receive S$200. The money will be distributed in June.

Also, the government will increase the home grant by up to S$30,000 for families who buy resale flats for the first time based on the flat size. Families will only be eligible for the grant if they do not earn over S$14,000 monthly and do not own any private property.

Lastly, there will be a higher marginal buyer’s stamp duty applied to all properties bought from 15 February. For residential properties, the portion of the property value over S$1.5 million and up to S$3m will be taxed at 5%, while the part over S$3m will be taxed at 6%, up from the existing rate of 4%. For non-residential properties, the part of the property value over S$1m and up to S$1.5m will be taxed at 4%, while the part over S$1.5m will be taxed at 5%, up from existing 3%. The initiative seeks to target higher-value properties as part of an enhanced property cooling measure.