Utilisation Rate of Government Co-Matching Child Development Accounts across Household Income and Caregiving Arrangements

Mr Victor Lye asked the Minister for Social and Family Development (a) whether the Ministry has studied the differences in the utilisation rate of the Government co-matching of Child Development Account across (i) household income bands (ii) caregiving circumstances; and (b) if so, what broad trends have been observed.

The Ministry of Social and Family Development (MSF) studied the utilisation rates of Child Development Account (CDA) monies for the birth cohorts from 2008 to 2011, across income bands from the time the child is zero to 12 years old.

Most parents saved close to the Government co-matching caps to maximise the Government co-matching for the first two birth orders across all income bands. However, lower-income families tended to save lower than the Government co-matching caps from the third child onwards. Consequently, the CDA accounts of children from lower income bands also have less balances compared to the other income bands at the point of account closure when the children turn 12 years old.

The income data used in the study was based on the parents' declaration at the point of application and family circumstances could have changed over time​. The cohorts studied also do not qualify for First Step Grant and the ComLink+ Package for Preschool, as these schemes were introduced after 2011 and may influence savings and utilisation behaviour especially in low-income families.

MSF has not conducted a study on differences in utilisation rate of the CDA monies across caregiving circumstances.