Difference in Income Tax Payable for Working Mothers from New Working Mother's Child Relief

Mr Chua Kheng Wee Louis asked the Deputy Prime Minister and Minister for Finance based on the personal income tax data of working mothers for Year of Assessment 2022, what is the percentage of mothers who would (i) pay a higher amount of income tax, (ii) experience no change in income tax paid and (iii) pay a lower amount of income tax, had the new Working Mother’s Child Relief formula been in place and applicable for working mothers.

The change to the Working Mother’s Child Relief (WMCR) should not be seen in isolation. It is part of a suite of moves to support marriage and parenthood in this and previous Budgets. We have changed the basis of WMCR to a fixed dollar relief to focus on providing support for children, regardless of the mother’s income. This effectively provides more support for those with greater needs. In tandem, we have significantly increased financial support via the enhanced Baby Bonus Cash Gift (BBCG) and the enhanced Child Development Account (CDA). These are available to all eligible parents, whether tax-paying or not.

Mr Chua is asking about a hypothetical scenario, as the new WMCR applies from YA 2025, and only for eligible mothers of Singaporean children born or adopted on or after 1 January 2024. Nevertheless, for the purpose of illustrating the impact of the changes on working mothers, the Inland Revenue Authority of Singapore (IRAS) has done a simulation using YA2022 data. When we take into account both the WMCR change and the $2,000 increase in the CDA First Step Grant in the child’s first year of birth, about 97% of mothers with newborns in 2021 would be better off or, at least, no worse off that year.

Apart from grants, we are also working with employers to better support parents in managing their work and family commitments through flexible work arrangements and enhanced leave provisions, some of which are funded by the Government.

The Government remains committed to supporting Singaporeans who want to get married and have children. We will continue to review and update our policies to build a Singapore Made For Families.