Starting next month, employers will no longer have to wait until a worker uses up all her maternity leave before being reimbursed. They will get part of the subsidy as long as half of the 16 weeks of leave mothers are entitled to, has been taken.

The change is prompted by feedback from employers, who said the system had caused cashflow problems because it had them waiting up to one year after a birth for the Government to pay its share.

Dr Vivian Balakrishnan, Minister for Community Development, Youth and Sports announced the change yesterday during a visit to Nee Soon South constituency of Ang Mo Kio GRC.

He said the new arrangement would make the system fairer to employers, especially with the drab economic climate.

The existing subsidy scheme requires the Government to reimburse businesses for half of the 16 weeks of leave but only after the mother has taken all the leave.

'With the current system, that can be as late as 12 months after delivery and in the current circumstances, that's not fair to the companies,' he told reporters.

The change, he added, 'is to improve cashflow for the companies because I also want to encourage companies to support women who want to have children and to remember that in both good and tough times we must continue to be a family-friendly society.'

The existing system was put in place last August when Prime Minister Lee Hsien Loong unveiled a basket of measures to encourage more couples to have children. The Government spends $1.6 billion annually on the incentives. The package included a bonanza of tax benefits and generous paid maternity leave, which was bumped up from 12 weeks to 16 weeks, with the Government paying the wages for half of that period.

Mothers could also spread out the last eight weeks of the leave over one year from the child's birth instead of taking it all at once.

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