CDA funds cannot be used at optical shops, retail pharmacies from Jan 1 due to risk of misuse: MSF

SINGAPORE – From Jan 1, 2026, parents and trustees can no longer use Child Development Account (CDA) funds at optical shops and retail pharmacies, said the Ministry of Social and Family Development (MSF).

In a statement on Oct 1, MSF said findings from audits conducted by the Auditor-General’s Office on withdrawals made by parents and trustees from the CDA under the Baby Bonus Scheme showed poor record keeping and unusual patterns of withdrawals at optical shops and retail pharmacies.

Based on MSF’s test checks, these included frequent withdrawals within a short period and purchases that did not appear to be for the child, or his or her sibling(s), which were made at one optical shop and different pharmacies, said the ministry.

Retail pharmacies refer to licensed pharmacy stores that supply prescribed medication and health-related products, such as those in shopping centres.

MSF’s follow-up investigations revealed instances where CDA funds were spent on purchases for adults instead of benefiting the child, or his or her siblings. It added that there were also cases of these establishments allowing or facilitating parents/trustees to encash the CDA monies, even though this is not allowed.

These findings were corroborated by MSF’s internal audit of 30 optical shops in 2024, which found that more than 85 per cent of outlets audited had similar unauthorised purchases.

“These findings show that there is a significantly higher risk of misuse at optical shops and retail pharmacies,” said MSF.

“Such merchants have also provided feedback that it is challenging and onerous to implement the necessary point-of-sales checks on CDA transactions, given the retail nature of the business.”

Optical shops and retail pharmacies that are registered as Baby Bonus Approved Institutions can continue accepting CDA payments – but these must be completed by Dec 31, as they will not be accepted from Jan 1, 2026.

This change does not affect pharmacy departments within healthcare institutions such as hospitals and polyclinics. CDA monies can continue to be used for prescribed medication and consultation fees at hospitals, polyclinics and general practitioner clinics that are Baby Bonus Approved Institutions, said the ministry.

The CDA was established in 2001 as a special co-savings account to be used for the child’s development and education. The funds in the CDA can be used for approved expenses at Baby Bonus Approved Institutions for the benefit of the child, or his or her sibling(s).

‘Very low’ CDA usage at optical shops, retail pharmacies

The ministry said it monitors CDA transactions and will investigate any unauthorised CDA withdrawals. Those found to have done so will be required to make refunds into the CDA.

In its statement, MSF noted that CDA usage at optical shops and retail pharmacies has been very low, comprising 0.8 per cent and 0.4 per cent, respectively, of total CDA spending in 2024.

CDA transactions have shown that most usage has been at pre-schools (including kindergartens) and healthcare institutions, which accounted for 97.1 per cent of total CDA spending in 2024, it said.

From May 1, the scope of CDA use was

expanded to cover incidental charges at pre-schools

to better meet families’ needs and support the child’s participation in a broader range of developmental activities.

The expanded use now includes enrichment programmes offered by pre-schools, such as speech and drama, allowing pre-schoolers to fully tap learning opportunities.

“The Government will continue to review the administration of the CDA to ensure that the scheme remains relevant and achieves its intended purpose to benefit the child and his/her sibling(s),” said MSF.

More information on the Baby Bonus Scheme and CDA uses can be found on the Baby Bonus website at

go.gov.sg/bbo