SINGAPORE - A suggestion by an opposition member to do away with a requirement for parents to deposit money into their children's Child Development Accounts in order to enjoy matching sums from the Government was rejected by Minister for Social and Family Development Chan Chun Sing.
Mr Chan explained that the point of the Child Development Co-Savings Scheme was to encourage families to save.
He was responding on Monday to Non-Constituency Member of Parliament Yee Jenn Jong, who wanted the co-savings requirement to be done away to help poor families who find it more difficult to set aside funds.
Under the scheme, savings which parents deposit into their children's Child Development Accounts (CDAs) are matched dollar-for-dollar by the Government up to a cap of between $6,000 and $18,000 depending on the birth order of the child.
Mr Yee suggested that the scheme could have higher interest rates instead of matching savings dollar-for-dollar so as to encourage more parents, especially those from low income families, to participate in the programme.
Questions about whether the scheme favours higher-income families, who are better able to save to receive the matching grant, were raised by some MPs when the scheme was introduced as part of the Baby Bonus package in 2013.
On Monday, Mr Chan said MSF does not track the percentages of the programme's budget which went to children in different housing types.
But the ministry is "mindful that low income families face more challenges in opening and depositing savings into the CDAs of their children". It works with social service offices and family service centres to encourage these families to save for their children's needs, said Mr Chan.
He added that community efforts like a scheme by OCBC to contribute additional funds to help low income families to kick start their CDA savings can also help.