Monthly subsidies for working mothers were doubled from $150 to $300 a child. Infant-care subsidies went up from $400 to $600.
But parents have since found out that many childcare centres are planning to increase fees.
The average monthly fees for childcare and infant care now are $684 and $1,184 respectively. A Sunday Times check with 20 childcare centres found that all but three intend to charge $30 to $120 more a month.
Some PCF Sparkletots childcare centres, for example, said there are plans to raise fees though a final decision has not been made yet. The 30 centres, run by PAP Community Foundation, charge a median fee of about $450 now. But NTUC Childcare, the biggest operator with 39 centres, said it will not charge more.
On online forums, parents have described the hike as an opportunistic move.
One parent, Mr Ronnie Tan, wrote to The Straits Times last Thursday when he learnt that almost all the childcare centres near his home are revising fees.
'With childcare centres increasing fees, there are no savings for parents,' wrote the 36-year-old human resource manager, who has two sons.
He wrote: 'Will the Ministry of Community Development, Youth and Sports (MCYS) stop childcare centres from increasing their fees as a result of the increase in the childcare subsidy?'
However, on its website, MCYS said it does not control fees but requires centres to give at least a month's notice prior to any fee increase.
Last month, MCYS announced plans to ramp up the quality of the 748 childcare centres here. This includes introducing a common curriculum and having better-trained teachers.
The Government will give up to $21 million a year, by 2013, to help eligible not-for-profit centres upgrade. But private operators have to fend for themselves.
When contacted by The Sunday Times, childcare centres said escalating costs - in rental, food and salaries - have driven them to up fees.
Take the case of MacPherson Sheng Hong Childcare Centre, run by the Society of Sheng Hong Welfare Services. Its monthly rent has gone up from $25,000 to $36,000 in the last three years. Last year, it incurred a deficit of more than $500,000.
With the adjustment in monthly fees for full-day care from $450 to $550, principal Wendy Tan said she hopes the centre will be able to cope. 'We can't be in the red all the time,' she said.
At a media conference last month, Dr Vivian Balakrishnan, Minister for Community Development, Youth and Sports, described the increase in childcare fees as 'unavoidable'.
'If you want better services, you want more convenient services, there will be inevitably some increase in cost, which the operators will also have to cope with,' he said. He added that the significant increases in subsidies should be enough to offset the fee hike.
But Mr Tan and his wife have done their calculations and found out otherwise. With the $150 subsidy now, they have to cough up $647 for their four-year-old son's childcare fees.
But since the centre is closing, they have to find a new one soon. One in Sengkang they are considering has upped its fees to $995. Even taking into account the $300 subsidy, which kicks in only next year, they will have to fork out $695 on their own.
In two years' time, their younger son, now two, will enrol in a childcare centre too.
Said mum Annie Tan, 35, a financial adviser: 'This will be a huge financial burden. We were planning to have two more kids. But now we may need to reconsider.'
