Review of Monthly Basic Subsidy for Working Mothers with Singapore Citizen Children Enrolled in Full-Day Childcare Programmes

The Government regularly reviews our policies to ensure that preschool out-of-pocket (OOP) expenses remains affordable for families. The Basic Subsidy is only one of several avenues affecting preschool affordability. In recent years, the Government has enhanced preschool affordability in other ways to effectively lower OOP expenses for parents.

In 2020, we raised the household income ceiling for means-tested additional subsidies from $7,500 to $12,000 and increased the quantum of additional subsidy across all eligible income tiers. In addition, we keep fees at Government-supported preschools affordable by imposing fee caps on Anchor Operators (AOPs) and Partner Operators (POPs). In January 2023, monthly fee caps for full-day childcare at AOP and POP centres were lowered by $40 to $680 and $720 respectively. With these moves, a median-income household, with a child attending full-day childcare in an AOP centre, would spend 3.1% of their household income on preschool in 2023, which is lower compared to 4.6% in 2019. We will further lower fee caps in Government-supported preschools in 2025 and 2026, so that dual-income families with a child in full-day childcare, in an AOP centre, will eventually pay around the equivalent of primary school and student care fees, before means-tested subsidies.

We are also increasing the number of Government-supported preschool places, which allows more families to benefit from these lower fee caps. By around 2025, 80% of preschoolers can have a place in a Government-supported preschool. This is more effective than increasing the Basic Subsidy in enabling the vast majority of families to benefit from lower preschool OOP expenses.