Increase in Number of Children without Child Development Account

Ms Lee Li Lian asked the Minister for Social and Family Development (a) why there has been an increase in the number of children without the Child Development Account (CDA) from 2,600 children for the 2001-2005 birth cohort to 11,600 for the 2006-2011 birth cohort; (b) what are the reasons for only 48% of CDAs in the 2006-2011 birth cohort saving up to the

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maximum co-savings cap while only 10% fully utilised the CDA; and (c) what is the breakdown according to household income of those children without CDA and those who have reached the maximum co-savings cap for the 2006-2011 birth cohort.

For the 2001 to 2005 birth cohorts, parents had six years to open and save in the Child Development Accounts (CDAs). About 3% or 2,600 of the children do not have CDAs. For the 2006-20135 birth cohorts, so far, 5% or 11,600 of the children do not have CDAs. As parents now have 12 years to open CDAs, we expect this percentage to fall over time. Similarly, we expect the percentage of parents who save to the CDA co-savings cap to increase over time.

The approved uses for CDA funds were expanded in 2012. Parents may choose to use the funds to pay for educational and healthcare expenses within the 12 years, or save for post-Secondary education6. As there is a longer period and more approved uses, we expect the utilisation for the 2006-2013 birth cohorts to increase over time.

MSF does not track the longitudinal household income changes of the families who open CDA accounts. We are thus unable to provide the proportion by household income of those who have yet to open their CDA accounts or those who have reached the maximum co-savings cap for the 2006-2013 birth cohorts.