New childcare subsidies will slash costs for families

They will go to working mothers; poorer households will benefit most

THE cost of childcare is set to fall sharply for low- to middle-income families, thanks to larger government subsidies from April.

Poor families will pay as little as $3 a month for full-day child- care and $60 for full-day infant care. Middle-income households earning up to $7,500 a month will pay half of what they do today.

The increased subsidies will go to working mothers and are tiered according to household income, with poorer families receiving the most support.

Families with monthly household incomes of $2,500 or less will be subsidised up to $740 a month, making childcare virtually free for them as median fees at childcare centres are about $750 or less.

Overall, two-thirds of households - about 120,000 families with young children - will qualify for the higher subsidies, which will cost the Government $105 million a year.

In a Facebook posting yesterday, Prime Minister Lee Hsien Loong said he knew that many working couples and parents worry about childcare. Many had left comments on his Facebook page.

Apart from increasing child and infant care subsidies, he said the Government was also expanding the number of good quality and affordable childcare centres.

"This will give parents with young children greater peace of mind, and hopefully encourage couples to have more children," he said.

The increased subsidies were announced by Acting Minister for Social and Family Development Chan Chun Sing, who said: "We want to make sure that all children, especially the lower- and middle-income... have the best opportunities available to them, that when they reach the formal school system, they will not be left behind."

The changes should also assure young parents that childcare services will "always be affordable, should they choose to go back to work", added Mr Chan, who spoke to reporters yesterday when he visited the YWCA Outram Child Development Centre.

His announcement came two days after the news of a raft of measures to encourage citizens to marry and have babies early.

Mr Chan said that with the bigger subsidies, the proportion of a family's monthly household income spent on childcare will be shaved to 7 per cent or less.

That puts Singapore "comfortably in the top half" of the childcare affordability index of countries in the Organisation for Economic Cooperation and Development (OECD), he added.

He also said the Government will keep an eye on childcare operators to ensure that fees do not go up once the higher subsidies kick in. But this is less likely to happen because the new subsidy system is tiered. The capacity of childcare centres is being expanded and that will help keep fees down too.

Voluntary welfare organisations thought the changes were "bold and daring" as they cut childcare costs significantly for a large number of families.

National Family Council chairman Lim Soon Hock said: "I think it will go a long way to encourage families to have children."

For student care centre supervisor Sujata Beeratan, 32, the changes mean she will pay just $20 to keep her two young children in childcare instead of the $500 she is paying now.

"The significant savings take a huge burden off my shoulders," she said.

jcheam@sph.com.sg

Additional reporting by Janice Tai

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