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Budget 2022: What the measures mean for a young parent

SINGAPORE — After the birth of her second child, part-time educator Annu Rai saw her family's monthly expenses grow over time. She currently spends an average of S$1,500 a month on her two boys, aged four and six, including education fees and enrichment classes. 

Ms Annu Rai with her two sons, aged four and six.

Ms Annu Rai with her two sons, aged four and six.

  • During his Budget speech on Feb 18, Minister of Finance Lawrence Wong announced that the Goods and Services Tax (GST) will be delayed to 2023 and staggered over two years
  • This provided relief to Ms Annu Rai, a young mother of two
  • To Ms Rai, this will give her more time to adjust to rising household expenses and childcare costs

SINGAPORE — As Ms Annu Rai's children grew, so did her family's monthly expenses.

And before she knew it, the part-time educator is spending an average of S$1,500 a month on her two boys, aged four and six, including education fees and enrichment classes. 

To Ms Rai, the rising cost of living is a huge concern, as raising children “is expensive”. 

So when Finance Minister Lawrence Wong announced during his Budget speech that the rise in Goods and Services Tax (GST) will be staggered over two years, starting from January 2023, Ms Rai felt an immense sense of relief. 

“I was actually expecting it to rise to 9 per cent so I was very worried about that,” the 35-year-old said. 

The staggering of the GST hike will give Ms Rai more time to adjust to rising household expenses and childcare costs.

Her husband works in the aviation sector, which has been hard hit by the pandemic. 

The family currently stays in a rented property and will be moving to an executive condominium next month.

MORE SUPPORT FOR WORKING MOTHERS

Prior to the Budget announcement, Ms Rai told TODAY that she was hoping for greater support for working mothers, which stems from her own personal experience. 

When she had her first child six years ago, Ms Rai, who was pursuing a Masters while on leave from her full-time job as an educator, had to put her career on hold while she took care of her firstborn. 

She took a four-month paid maternity leave which employees are entitled to but subsequently decided to extend her leave, unpaid, to two years as she had no parental support.

“My parents were still young and so they were still working. I had no choice but to take two years off because I don’t have parents supporting me,” she explained. 

Now, she works part-time so that she can still care for her children, but doing this means taking a fairly substantial pay cut and saying goodbye to her career prospects.

“It will be good if there is some kind of scheme where people can retain their jobs and at the same time manage the kids without affecting their career,” she said.

HOW THE BUDGET BENEFITS FAMILIES 

For families like Ms Rai’s, they will be receiving a series of cash payouts, GST vouchers and rebates, as part of an enhanced S$6.6 billion Assurance Package announced by the finance minister on Friday. 

"(We) will provide significant additional support in this Budget to help them tide over the current period of higher prices," Mr Wong said.

Ms Rai will also receive a S$200 top-up to her children’s Child Development Accounts, in addition to the annual Edusave contribution by the Government. They will receive the top-ups from September onwards. 

“The S$200 is not much, but it will definitely help,” she said. 

The Ministry of Finance (MOF) also provided an illustration of how the Budget measures will benefit families, such as a couple with two young children living in a 4-room HDB flat.

MOF said the family could receive S$3,850 over five years, offsetting about five years of GST increase.

The amount comprises:

  • Cash payout: S$2,100
  • Additional GST voucher - U-Save: S$450
  • MediSave Top-up: S$900
  • CDC vouchers: S$400

The estimated increase in GST that the family will incur per year is S$806, said MOF.

For a couple with two young children living in a 3-room HDB flat, the family could receive S$5,010 over five years, offsetting about 12 years of GST increase. 

This amount comprises:

  • Cash payout: S$3,200
  • Additional GST voucher- U-Save: S$510
  • MediSave Top-up: S$900
  • CDC vouchers: S$400

The estimated increase in GST that the family will incur per year is S$397, said MOF.

Related topics

Budget 2022 Budget 2022 profiles GST hike GST GST Vouchers CDC Voucher Scheme Edusave Assurance Package

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