Raising Tax Relief Claimable under Working Mother's Child Relief Scheme

Mr Christopher de Souza asked the Deputy Prime Minister and Minister for Finance whether the amount of tax relief claimable under the Working Mother's Child Relief scheme can be increased by raising the Personal Income Tax Relief cap from $80,000 to $100,000 for working mothers with children, to encourage growth in our national total fertility rate and support families who incur exponential expenses when raising and caring for many children.

The personal income tax relief cap was introduced to enhance the progressivity of Singapore's tax system. Today, we have 15 personal income tax reliefs, and each serves a worthy objective. But taken together, the total amount of reliefs claimed may unduly reduce the taxable income for a small group of taxpayers with high income.

The current relief cap of $80,000 affects only 1% of our tax residents. For the remaining 99% of tax residents, their cumulative tax reliefs do not exceed the cap. Nine in 10 mothers who claim the Working Mother's Child Relief (WMCR) are not affected by the cap. Eight in 10 mothers who claim WMCR on two or three children are similarly not affected by the cap. Given that the total reliefs of the vast majority of working mothers do not even reach the current cap of $80,000, raising the cap to $100,000 would not be of assistance to them.

Therefore, looking beyond tax reliefs, the Government provides a comprehensive suite of measures to support Singaporeans in parenthood. Many of these benefits have been enhanced over the years. These include:

(a) Baby Bonus Cash Gift of up to $10,000;

(b) Government contributions of up to $18,000 to the Child Development Account, comprising the $3,000 First Step Grant and up to $15,000 in Government matched co-savings;

(c) $4,000 MediSave Grant for newborns;

(d) Significant subsidies for education and healthcare for all children. For instance, all Singaporean children can receive over $180,000 of education subsidies by the time they turn 16 years old, including preschool;

(e) 16 weeks of Maternity Leave, two weeks of Paternity Leave, and up to six days of paid Child Care Leave per parent per year; and

(f) Concessionary Migrant Domestic Worker Levy.

The Government remains committed to supporting Singaporeans who want to get married and have children, and will continue to review our policies and schemes to build a Singapore that is Made for Families.