The main objective of a new grant that encourages parents to save for their children is to help lower-income parents who find it hard to do so, said Minister for Social and Family Development Tan Chuan-Jin yesterday.
With the Child Development Account (CDA) First Step grant announced in this year's Budget, Singaporean children born on or after March 24 will automatically get $3,000 in their accounts, without their parents being required to make a matching deposit.
"We have found that some families are not able to put in any money, or can put in only a limited amount of money," Mr Tan told reporters after a visit to KK Women's and Children's Hospital to explain the new policy.
As a result, they are unable to benefit fully from the matching government contribution for these special accounts, he added. Roughly 5 per cent of account holders under the CDA scheme do not have any money deposited in their accounts.
"For those who may be lower-income, who may have some challenges (in coming up) with additional cash to put into the CDA, I think this would be particularly useful," said Mr Tan.
Previously, parents would have to deposit money into the account first to get a matching government contribution of up to $6,000 to $18,000 per child.
The money can be used at approved institutions to pay for childcare fees and medical expenses, among other things. Mr Tan yesterday also reminded parents to deposit money into their children's accounts only on or after July 1, in order to benefit from the grant when it comes into effect that day.
Former specialist clinic assistant Seri Hirdayu, 25, who gave birth to her third child, Liya Zafirah, at KKH on Thursday, said: "I want to go back to work, so I can use the $3,000 to pay for my daughter's infantcare. It is quite expensive."
Meanwhile, manager Jebson Chua, 45, whose second daughter was born last week, said he was disappointed and hoped the Government would consider backdating the grant to Jan 1.
Yesterday, Mr Tan told reporters there were no plans to do so. He said although the grant kicks in only on July 1, babies born from Thursday, the date of the announcement, would be eligible.