The Straits Times
Published on Jan 28, 2013

Set up fund to spread out cost of raising a child


A RECENT survey showed that Singaporeans would like to marry, settle down and have two to three children if they can ("Say 'I do' one day? Yes, but..."; Jan 4).

However, two major issues hindering this, cited by over 85 per cent of the respondents, are the cost of having a child and the inability to set aside time to look after the child.

The first problem can be tackled by implementing a "child-raising fund" - an optional loan scheme - for adult Singaporeans to defray the cost of raising a child.

Workers can put a portion of their income into the fund, much like the current Medisave scheme. When a couple has a child, the Government can use money from our reserves to top up the amount to about $230,000 per child - enough to substantially, if not entirely, cover the cost of raising a child.

When the child reaches working age, the loan can then be paid back via contributions from both the parents and the child, over the rest of their working lives.

In this way, the cost of raising a child can be split over the parents' and child's working lives instead of being shouldered entirely by the parents in a shorter timeframe, thereby lowering costs in the short term.

To solve the second problem, the current flexi-work scheme can be extended.

The Government can compensate companies according to the amount of time mothers take off work, plus an additional incentive. It can also pay mothers who leave the workforce a substantial salary for up to seven years, when their child reaches school-going age.

The cost of this scheme can be offset by re-allocating our current fertility policy funds, a 3 per cent raise in the goods and services tax and income tax, and/or cutting back on our current expenditures.

These policies can address the concerns Singaporeans have about having children and might help lead to an improvement in our total fertility rate.

Abel Tan