THE bottom 40 per cent of families by income will receive more in government benefits this year than they will pay in taxes.

Finance Minister Tharman Shanmugaratnam on Wednesday produced data to show that the Government's Budget policy provides ample help to low and lower-middle income households, and supports Singapore's social compact.

'The Singapore system is one that provides targeted help for the needy, while keeping the overall tax burden low so that we reward work and enterprise,' he said as he wrapped up two-and-a-half days of debate on his Budget speech.

For families whose incomes place them in the 11th to 20th percentile, the net gains from subtracting the taxes they pay from the government benefits they receive this year adds up to about 25 per cent of their income.

These benefits include the GST offsets, rebates, top-ups, Workfare Income Supplements and other grants,

These families thus receive more in benefits than they pay out in a range of taxes, including income tax, GST, foreign maid levies and car and property taxes.

They also receive additional subsidies for education, housing and healthcare, Mr Tharman said.

By contrast, the top 10 per cent of households by income will pay 13 per cent more in taxes this year than they will receive in government benefits.

Responding to MPs' concerns about whether enough was being done to help the needy in the face of a growing income gap, Mr Tharman stressed that Singapore's fiscal system is in fact 'highly progressive'.

The bulk of government revenues comes from the top 20 per cent of households, he said.

Read the full story in Wednesday's edition of The Straits Times