Waiver of Foreign Domestic Worker Levy for Families with Three or More Children Aged Under 16 Years

Mr Ong Teng Koon asked the Minister for Manpower whether the foreign domestic worker levy can be waived for families with three or more young children who are below 16 years of age.

Mr Speaker, the number of foreign domestic workers (FDWs) in Singapore has increased substantially by about 40% in the last 10 years. In 2018, there were over 250,000 FDWs in Singapore. It is not sustainable for the population of FDWs to grow unchecked.

To moderate the demand for FDWs in Singapore, a levy has been payable by employers since April 1982. The levy is regularly reviewed and was last adjusted in April 2019 to $300 a month for employers without care-giving needs. However, families with care-giving needs continue to enjoy the FDW concessionary levy rate of $60 a month. This measure strikes a good balance between managing FDW demand and the need for continuing support for Singaporean households with children, seniors and persons with disabilities. Currently, there are no plans to further reduce the FDW concessionary levy.

The Government also provides other forms of support for families with children, some of which offer even more assistance to larger families. For example, the Baby Bonus Cash Gift, Child Development Account (CDA) and MediSave Grant for Newborns provide parents with up to $18,000 per child for their first and second child and up to $26,000 per child for their third and fourth child and up to $32,000 per child for their fifth and subsequent child. Parents with more children are also eligible for higher tax rebates and reliefs. As was announced recently during the National Day Rally, pre-school subsidies will also be substantially enhanced.

Mr Speaker, I would like to ask the Senior Parliamentary Secretary a supplementary question. Our latest TFR for 2018 shows a number of 1.14. This is the second lowest TFR in the past decade. And given the heavy demands of work, many parents have found it to be a necessity to employ an FDW to help them to do household chores and look after their kids. I believe The Straits Times ran an article over the weekend on this particular subject.

So, will the Ministry consider waiving FDW levies for families with more than three children in order to help them lower their financial demands and to encourage them to have more than three children?

Mr Speaker, I want to thank the Member Mr Ong Teng Koon for his supplementary question and to assure him that families with care-giving needs, including parents of young children, will continue to enjoy the FDW concessionary levy. Some of these parents with young children are also staying with their grandparents – so, inter-generational households. In fact, inter-generational households may hire more than two FDWs with levy concessions. Just to give an example.

For example, a couple with two young children under the age of 16 years old can hire two FDWs at the concessionary levy. And if their parents are staying with them and the parents are above 67 years old, because that sometimes is the preferred arrangement – extended family – they will be entitled to hire an FDW at the concessionary levy. So, in this example, the household would be able to hire three FDWs to help the parents, especially when they have young children, whether two, three or more. Allow me to share a number. Over the last three years, in fact, the majority of our FDW employers, that is, about 80% of our FDW employers enjoy the concessionary levy of $60 a month, which translates into a saving of $240 a month per FDW.

If Mr Ong would allow me to elaborate, the Government has committed additional resources and investments in pre-school education to give our young the best start in life. If you remember, a few months ago, Prime Minister Lee Hsien Loong, during the National Day Rally, announced a series of measures to further boost pre-school education, for example, to increase the total number of Government-supported pre-schools from the current 50% to 80% over time. At the same time, he also announced that more middle income families will benefit from additional pre-school subsidies with the increase of the income ceiling from $7,500 to $12,000. I am saying that when young couples consider having children or more children, an FDW could be one of the considerations. But more often than not, a pre-school is also a key consideration.

And to help families with young children financially, the Government provides many forms of support. I mentioned them earlier. In addition to those that I have mentioned, the Government also provides support, such as Primary and Secondary school subsidies as well as parental tax rebates and reliefs. A child entering Primary school in 2018 would have received more than $130,000 in education subsidies by the time he or she finishes Secondary school. And bigger families with more children will also receive more help from the Baby Bonus scheme as well as higher tax rebates.