Debated in Parliament on 7 Jul 2014.
Mr Yee Jenn Jong asked the Minister for Social and Family Development since 2001 (a) what percentage of the Child Development Co-Savings Scheme budget allocated for babies born into households of 1-room to 3-room flats, 4-room flats, 5-room and executive flats, and private property respectively, have been disbursed; (b) what percentage of children in each of these household types have received the full co-matching amount; and (c) what are the reasons for the differences in take-up rates amongst these groups, if any.
Mdm Speaker, since 2001, close to 300,000 Child Development Accounts (CDAs) have been opened for Singaporean children. From 2001 to 2013, the Government had disbursed $1.4 billion of co-savings into the CDAs.
MSF does not track the opening, matching and usage of CDAs by housing type. The Ministry is mindful that low-income families face more challenges in opening and depositing savings into the CDAs of their children. We work through touchpoints, such as the Social Service Offices and Family Service Centres, to encourage these families to save up for their children. We also support initiatives by the community, such as the OCBC Starter Scheme, which contribute additional funds into the child's CDA to help low-income families kick-start their CDA savings. We encourage more such initiatives.
I thank the Minister for the answer and I noted that the Ministry does not track the adoption by income level. I hope that there could be more data tracked on this because we want to understand how the lower-income families have participated in this programme. I would like to ask the Minister if the Ministry has evaluated what are the key reasons why people do not take up this programme and what more can be done.
Mdm Speaker, first and foremost, let me clarify. There is usually a period of time given for various families to top up the account to enjoy the co-savings programme by the Government. So, for some of the more recent cohorts, it would be too premature for us to say that they do not fully top up the amount because they still have some time to go before their top-up actually ceases.
For those earlier batches, the usual reasons are awareness and ability. So, for both awareness and ability, we have to tackle the issues head on. For awareness, we enlist the help of all the community partners to go out and let the families know about such a scheme. For ability, that is where community efforts like the OCBC Starter Scheme comes in very useful, because for every $50 that some of these low-income families save over a six-month
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period, OCBC will contribute $100 at the end of the period. On top of that, the Government will do a matching one-for-one, up to $150 in this account.
I thank the Minister for the reply. I would like to ask whether it is still relevant to insist on co-matching. Can we find other ways to encourage those who can afford it to put more into their children's education by, say, having higher interest rates for co-matching the amounts that they put in? Is it possible for us to remove this co-matching criterion totally, so that we can help the lower-income families?
Sorry, can I clarify the Member's query? He wants to raise the interest rates and wants to do away with the co-matching? What exactly is the solution?
The first part will be: can we totally do away with co-matching? Of course, if the reason for co-matching is that you want the parents to participate in the programmes, for those who can afford it, maybe we can create some other schemes to reward them for putting more into the account. But for the lower income families, in order to help them, can we not have co-matching at all?
Do away with co-matching?
Yes.
For everyone?
Yes.
Okay, let us take a step back on this one. I think when the scheme was conceived, the aim of the scheme was to encourage families to save up for their children. So, I think that remains a relevant policy objective, which is to encourage families to save up for their children. Having said that, of course, we understand that some of the lower-income families may not have the ability to save up, and we will have to use other policy instruments and community help schemes to help them, encourage them to save up. But I am not sure, because of that, we want to do away with the entire co-savings scheme. I am not sure about that.
For every policy intent and policy instrument, generally, we know that if you have one policy intent, you need a policy to do that, and it is very difficult for us to achieve many policy intents through one instrument. So, in this particular case where lower-income families are unable to save up as much, I think we should look at how we can help them to save up. But the philosophy of getting the families, to encourage the families to save, I think that remains
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relevant and that should be our objective.
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