Singapore Budget 2020: Building a caring and inclusive home for all Singaporeans

The Government has tripled healthcare expenditure from $4 billion to about $12 billion a year, to meet the growing needs of seniors and to ensure that every Singaporean has access to affordable and quality healthcare. It is also doubling its support
The Government has tripled healthcare expenditure from $4 billion to about $12 billion a year, to meet the growing needs of seniors and to ensure that every Singaporean has access to affordable and quality healthcare. It is also doubling its support for the young in their pre-school years, raising expenditure on the early childhood sector from $1 billion to over $2 billion per year. ST PHOTO: KUA CHEE SIONG

A vibrant economy provides good jobs and opportunities for Singaporeans, and allows families to do well. It also gives us the resources to support our people with their needs, to build a caring and inclusive home.

Our tax and spending policies reflect our values. Over the past decade, we have significantly increased our social spending.

We tripled our healthcare expenditure from $4 billion to about $12 billion a year, to meet the growing needs of our seniors and to ensure that every Singaporean has access to affordable and quality healthcare. We increased our investments in education, from $10 billion to about $13 billion, so that all Singaporeans will have the best chance to fulfil their fullest potential. We increased the expenditure on national development from $2.4 billion to $3.6 billion, with the bulk of this going into subsidies on public housing, so that every Singaporean household can have a home to call their own. Last year, we gave out about $1.1 billion in cash to Singaporeans who need more help.

This reflects our commitment to invest in our people, to give every citizen a stake in our society, to care for our seniors, and to provide more help to those with less.


Good education provides a strong foundation for children to grow, realise their aspirations, and continue a journey of lifelong learning. We have committed to decisive shifts in the Government's support for early childhood development. We are determined to give every child, regardless of circumstances, a good start in life.

As PM announced at the National Day Rally last year, we will step up efforts to improve the affordability, accessibility and quality of pre-school services. We have significantly enhanced pre-school subsidies and made them available to more families from this year. We will also increase the share of government-supported pre-school places from just over 50 per cent today, to 80 per cent by around 2025.

Overall, we are doubling our support for our young in their pre-school years. In 2018, the Government spent about $1 billion on the early childhood sector. Within the next few years, this will double to over $2 billion per year.

In the primary to pre-university school years, education is already heavily subsidised for Singaporeans. Primary school is free for all Singaporeans, while the secondary school fee is $5 a month. Students pay only a few dollars of miscellaneous fees.

For students from lower-income families, we will provide further help. We will enhance the MOE Financial Assistance Scheme by raising the annual bursary quantum for pre-university students, from $900 to $1,000. We will also increase transport subsidies for all students, and school meal subsidies for secondary school students. The enhanced Financial Assistance Scheme will cost an additional $9 million per year - a total of $52 million per year.

We announced that we would enhance bursaries for diploma and degree holders last year. Starting from Academic Year 2020, students from lower-and middle-income families in the polytechnics and autonomous universities can benefit from higher bursaries. We will also enhance bursaries for full-time ITE students from Academic Year 2020. Students from households who qualify under the lowest income tier for the bursaries will now receive 100 per cent fee subsidy on top of the cash bursary. Students from low-and middle-income households will also benefit from an increase in the cash bursary quantum by up to $200 a year.

The cost of bursaries for higher education will rise from $148 million per year to $198 million per year.

A good education lays a strong foundation for a better future. This is why this Government has been providing significant education subsidies for each child. A Singaporean child will receive over $180,000 of education subsidies in total by the time he turns 16. These include about $50,000 in government subsidies over five years when they enrol in a full-day childcare programme with one of the anchor operators.

For those from less-privileged backgrounds, there are additional subsidies for pre-school, bursaries, and other financial assistance schemes. This substantial investment is how we maximise every child's potential, regardless of family circumstances.

When Singaporeans are ready to start a family and own a home, we make sure that there is good access to quality and affordable housing.

Last year, the Ministry of National Development consolidated existing housing grants into the Enhanced CPF Housing Grant. With the Enhanced Housing Grant, first-time flat buyers can now enjoy up to $160,000 in housing grants. The monthly household income ceilings for subsidised flats and executive condominiums were raised to $14,000 and $16,000 respectively.

We expect around 16,000 HDB households to benefit from these enhancements each year.


Singaporeans are living longer. Our life expectancy at birth is close to 85 years, the longest in the world. This is a good thing! Singapore will not just be a great place to raise a family, but a great place for seniors to live a life of purpose, dignity and contribution. Ageing with confidence includes having financial assurance in retirement.

Over the years, we have strengthened the four pillars of our social security system - home ownership, CPF, healthcare assurance, and income from Workfare and Silver Support. We have also been enhancing the ComCare schemes, which support Singaporeans who are unable to work and have little or no family support.

The CPF is a major scheme to enable Singaporeans to save enough for their retirement years. We need to keep on updating and improving our CPF policies over time, so that they remain appropriate for each cohort.

We have been adjusting the Basic Retirement Sum, or BRS, regularly, in line with rising income levels. Since 2017, household incomes per capita have risen by an average of 4.1 per cent per year (in nominal terms), while the BRS has increased by 3 per cent per year.

We will continue to adjust the BRS by the same 3 per cent per year for the next two cohorts. The BRS will be $93,000 for cohorts turning 55 in 2021, and $96,000 for those turning 55 in 2022. These modest continuing adjustments are necessary for payouts to keep up with basic retirement expenses.

We expect seven in 10 actively employed persons from these two cohorts to be able to set aside their BRS, significantly more than the four in 10 about a decade ago.

We are in a fortunate position that most of our seniors have housing assets that they can use to support their retirement, if they wish.

We will do more to help Singaporeans tap their housing assets for retirement by enhancing the Silver Housing Bonus and the Lease Buyback Scheme.

The CPF is a good retirement scheme, based on personal savings. Many Singaporeans want to top up their own, their spouse's, or parents' CPF accounts. We would like to encourage more to do so, particularly those whose CPF balances are on the low side.

To help those with less CPF savings to save more, I will introduce a Matched Retirement Savings Scheme from 2021 to 2025. Lower-to middle-income Singaporeans aged 55 to 70 who have not been able to set aside the prevailing BRS will be eligible. Under this scheme, the Government will match every dollar of cash top-up made to their CPF Retirement Account, up to an annual cap of $600. This is a way of encouraging and augmenting family support for our seniors with fewer means in retirement.

About 435,000 Singaporeans will be eligible.

While the CPF is a good scheme, for a small segment of the elderly population, it will not be enough.

Some had low incomes during their working years, and currently have little or no family support. We created the Silver Support Scheme to complement the CPF for this group, and give them more financial security in retirement.

I will raise the quarterly cash payouts by 20 per cent. For individuals living in smaller flats, this means that the cash payouts will increase from $750 to $900 per quarter.

I will also broaden the eligibility criteria of Silver Support. There will be a new payout tier to provide a smaller payout to seniors whose monthly household incomes per person are above $1,300 but not exceeding $1,800 - these seniors do not receive Silver Support today.

Overall, we expect about 100,000 more seniors to benefit from the enhanced Silver Support in 2021. The cost of Silver Support will nearly double, from today's $330 million, to around $620 million in 2021. These enhancements underscore the Government's commitment to provide seniors with greater assurance in retirement, and reflect the values we hold dear, such as taking care of our parents and seniors.

They will also complement the other schemes for our seniors, such as the Pioneer Generation Package and Merdeka Generation Package.

We will also help seniors stay active and contribute to the community. Many senior volunteers find volunteering gives them purpose, keeps them socially connected, and promotes active ageing. The community benefits from their wealth of experience and skills.


Our success in taking care of every Singaporean, from pre-school to retirement, is only possible with the support of our community partners. The Government will continue to support the community in building a stronger giving culture.

Last year, I announced the Bicentennial Community Fund.

This year, the Ministry of Social and Family Development and National Council of Social Service will set up the Community Capability Trust to fund-raise and support our social service sector partners in enhancing their capabilities and capacities to serve the community.

For a start, together with the Tote Board, we will provide $200 million to the trust in FY2020, and match up to $150 million in funds raised over the next 10 years. This will provide a pool of funds our social service agencies can tap to transform for the future.

Many enterprises have also built inclusive workspaces for persons with disabilities, or PWDs. To support the employment of PWDs, the Special Employment Credit (SEC) and Additional SEC schemes provide wage offsets for employers hiring Singaporean PWDs earning below $4,000 per month. At the last Budget, we extended the SEC and ASEC until the end of 2020.

In 2018, more than 5,700 employers hiring over 8,600 Singaporean PWDs benefited from the SEC.

We will introduce the new Enabling Employment Credit, or EEC, to provide stronger support for employers of PWDs. It will replace the current SEC and ASEC schemes for PWD employment. It will be available for five years, from 2021 to 2025, at a cost of about $31 million per year. To ensure it remains helpful for PWDs to find employment and remain in the workforce, the Government will review the EEC after two years and make adjustments if necessary.

I will also top up three funds that provide targeted help for the elderly and the lower-income: $750 million to the ElderCare Fund, $500 million to the ComCare Fund, and $200 million to the Medifund. These funds provide a safety net for the low-income, by helping them to meet their daily expenses and healthcare fees.

Budget 2020 supports the Government's long-term strategy of building a caring and inclusive society. This is our continued effort to improve the lives of our people and our future generations. We must continue to work together to build a society where opportunities are available to every Singaporean, at every stage of life.

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A version of this article appeared in the print edition of The Straits Times on February 20, 2020, with the headline Singapore Budget 2020: Building a caring and inclusive home for all Singaporeans. Subscribe