BUDGET 2016 - Shaping our future together: Helping families

More money in the kitty for baby

Parents of children born from March 24, 2016 will receive a new grant of $3,000 in their child's Child Development Account (CDA).
Parents of children born from March 24, 2016 will receive a new grant of $3,000 in their child's Child Development Account (CDA).PHOTO: ST FILE

$3,000 grant for those born from March 24; Medisave withdrawal limit to double to $900

Parents of Singaporean newborn babies will get more help to cope with their children's health and childcare expenses.

They will receive a new grant of $3,000 in their child's Child Development Account (CDA), without having to first deposit money in it.

Also, the Medisave withdrawal limit for pre-delivery expenses - such as money spent on ultrasound scans and prenatal consultations - will be doubled from $450 to $900.

These changes apply with immediate effect to Singaporean babies born from yesterday.


Finance Minister Heng Swee Keat said to laughter from MPs in the House yesterday: "I am told that, on average last year, we had 93 babies born every day. So congratulations to our 93 babies (born today)."

The changes are part of new family-friendly perks in the Marriage and Parenthood Package, which was introduced in 2001 and has been enhanced four times - in 2004, 2008, 2013 and last year.

The CDA scheme involves the Government matching parents' contributions dollar for dollar, up to a cap of $6,000 to $18,000, depending on the birth order of the child.

Parents can open a CDA and use it to pay for expenses such as their child's medical costs and childcare fees, from the time the child is born until he turns 12.

Eligible children will receive the new First Step Grant - which is part of the existing overall government contribution - automatically.

So, while the maximum government contribution remains the same, parents need to deposit only $3,000 to $15,000 for each child - instead of $6,000 to $18,000 - to get the maximum co-matching funds.

With the new grant, an estimated 74 per cent of CDA holders will be able to receive the maximum government contribution, up from the current 60 per cent, said Senior Minister of State Josephine Teo in a Facebook post yesterday.

  • $3,000

  • Child Development Account
    First Step Grant for all babies born from March 24

Mrs Teo, who oversees population issues, added: "Separately, about 5 per cent of CDA holders today do not save into their accounts at all, perhaps because they are unable to do so. They do not enjoy any of the co-matching funds.

"The $3,000 grant will be particularly helpful for this group of parents and their children."

Singapore had 33,793 citizen babies last year, the highest figure in 13 years.

The grant will be deposited into CDAs from July 1, after necessary updates to systems are made. The Ministry of Finance said parents of children born between March 24 and June 30 should wait until July 1 before saving in the CDA in order to benefit from the grant.

Staff from the Ministry of Social and Family Development will visit all hospitals over the long weekend to explain the grant.

Business development manager Ivan Ong, 32, who is expecting to welcome a second child in May, intends to use the CDA to offset pre-school costs, which have been rising steadily in recent years.

He said he will wait until July to save in the CDA, so that he needs to contribute only $3,000 to get the maximum $6,000 from the Government. "My wife will take maternity leave and there are a few months to go before we enrol the child in infant care, so I think we can wait."

•For more information on the First Step grant, go to www.babybonus.msf.gov.sg/parent

A version of this article appeared in the print edition of The Straits Times on March 25, 2016, with the headline 'More money in the kitty for baby'. Print Edition | Subscribe