The Central Provident Fund (CPF) Board mistakenly paid out $1.7 million more in Medisave grants for 885 babies who were not citizens at birth, it revealed yesterday.
The board put the mistake down to a "processing error", and said that it will recover the money from the babies' Medisave accounts next Wednesday.
Parents who have spent the money, leaving insufficient funds in their children's accounts, will have to pay the shortfall in cash, a CPF Board spokesman said in response to queries from The Straits Times.
Fewer than 100 children do not have enough money in their accounts for the funds to be recovered, with the largest single shortfall being $159. The spokesman added that the board will "work with (parents) on alternative payment arrangements if they have any difficulties".
The error was uncovered in January, after a parent made an inquiry about the grant. When checks were done, it was discovered that the child had received more money than he was supposed to.
The affected babies, who received their citizenship after birth, were either not eligible for the Medisave Grant for Newborns or should have received a pro-rated amount - depending on the age at which they became citizens.
However, between March last year and January this year, they each received between $1,000 and $3,000 more than they were eligible for.
In its statement, the board apologised to the affected families, who will be informed by mail.
"We have rectified the work processes involved in the payment of the Medisave Grant for Newborns," it said. "We have also conducted a thorough review of our processes and have strengthened them to ensure accuracy in future Medisave Grant for Newborns payments." This will include having additional payment verification checks on all newborns who are eligible for the grant.
Newborns who were Singapore citizens at birth were not affected by the mistake.
The $4,000 Medisave grant is given to all Singaporean newborns as part of the Marriage and Parenthood Package, and is meant to be used for healthcare expenses such as vaccinations or MediShield Life premiums. Children who are not citizens at birth, but obtain Singapore citizenship before they turn two, are given pro-rated amounts.
Since 2012, about 150,000 children have received the Medisave Grant for Newborns, said the CPF Board, and the affected children make up less than 1 per cent of the total cohort. Families affected by the error can call the CPF Call Centre on 1800-227-1188, on weekdays between 8am and 5.30pm, if they need more information.