Longer maternity, childcare leave and better baby bonuses are some of the announcements that got Singaporeans sitting up at the National Day Rally on Sunday night.

The Singapore government plans to spend an additional S$700 million a year on measures to boost its flagging birth rate. Currently, it spends about S$900 million a year.

Below is the summary of the changes:

ENHANCED BABY BONUS

Both elements of the Baby Bonus, i.e. cash gift and dollar-for-dollar government matching contribution for the Child Development Account (CDA), will be enhanced. With the enhancements, the Baby Bonus will be up to $10,000 for each of the first two children and up to $18,000 for each subsequent child. The enhanced Baby Bonus applies to Singaporean babies born on or after 1 Jan 2009.

1. Cash gift: The cash gift for the first and second child will be raised from $3,000 to $4,000. The cash gift for the third and fourth child remains at the current level of $6,000n
2. CDA: The government matching contribution will be extended to the first child at up to $6,000. The matching contribution for the CDA for the second, third and fourth child will remain at the current levels. For the fifth child and beyond, a dollar-for-dollar matching for the CDA of up to $18,000 per child will be introduced.

ENHANCED LEAVE MEASURES

Leave measures for working fathers and mothers will be enhanced to give parents more time to spend with their children.

1. Extended government-paid maternity leave: Maternity leave will be extended from 12 weeks to 16 weeks for mothers with Singaporean children born on or after 1 Jan 2009. The last eight weeks can be taken flexibly over 12 months from the birth of the child, subject to mutual agreement betw%en the employer and employee. For the first two confinements, the first eight weeks of maternity leave will continue to be employer-paid, with the last eight weeks to be funded by the Government (capped at $20,000 per confinement, inclusive of CPF contributions). For the third and subsequent confinements, the full 16 weeks will be funded by the Government (capped at $40,000 per confinement, inclusive of CPF contributions).
2. More leave for childcare: From 1 Jan 2009, paid childcare leave will be increased from two days to six days per year per parent if one has a Singaporean child below the age of seven. The first three days will be employer-paid while the last three days will be Government-paid (capped at $500 per day, inclusive of CPF contributions).
3. New unpaid infant care leave: A new unpaid infant care leave of six days per year per parent if one has a Singaporean child below the age of two will be introduced to give parent additional time to spend with their child. Parents with a child under the age of two are entitled to both paid childcare
   leave and unpaid infant care leave.

ENHANCED TAX BENEFITS

The existing tax benefits will be substantially enhanced to provide greater financial support to parents in raising children.

1. Qualifying Child Relief/Handicapped Child Relief (QCR/HCR): For parents with qualifying children (existing or newborn), the QCR will increase from $2000 to $4,000 per child, and the HCR from $3,500 to $5,500 per child.
2. Working Mother’s Child Relief (WMCR): Working mothers with qualifying Singaporean children (existing or newborn) will enjoy higher WMCR. Currently, the WMCR for the first, second, third and fourth child are 5%, 15%, 20% and 25% of the mother’s earned income respectively. The WMCR will now be 15% and 20% of the mother’s earned income for the first and second child respectively, and 25% per child for the third and subsequent child. The WMCR will be subject to an overall cap of 100% of the mother’s earned income for all her qualifying children.
3. Combined QCR/HCR and WMCR: The total amount of QCR/HCR and WMCR claimable will be capped at $50,000 per child, twice the current cap of $25,000. Parents will be able to claim the enhanced QCR/HCR and WMCR from Year of Assessment 2009.
4. Parenthood Tax Rebate (PTR): Currently, PTR is only available for the second to fourth qualifying Singaporean child in a family. Going forward, PTR will be extended to the first child and beyond the fourth child. The PTR will be $5,000 for the first child, $10,000 for the second, and $20,000 for each subsequent child. Both the father and the mother may use the PTR to offset their income tax payable. Parents of children born or legally adopted on or after 1 Jan 2008 will be able to claim the enhanced PTR from Year of Assessment 2009.

ENHANCED QUALITY OF KINDERGARTEN EDUCATION

In order to further improve teacher quality and enhance teacher-pupil interactions in kindergartens, the Ministry of Education will increase recurrent funding for eligible kindergarten operators. The total recurrent grant to be provided is expected to reach up to $62.5 million per year in five years’ time, compared to the current $17 million a year. The additional grant will allow the operators to recruit better qualified teachers and principals, engage more teachers to improve teacher-pupil interactions and provide more support to children who are weak in English. The Ministry of Education will also provide bursaries and scholarships for existing kindergarten teachers to upgrade their professional qualifications in approved institutions.