STI: Raising junior is easier now

Aug 26, 2004

Raising junior is easier now
by Sue-Ann Chia

LOOKING after junior just became more affordable.

Parents with children aged below 12 can enjoy a lower maid levy, those with babies get a new infant-care subsidy, and there is a new $3,000 relief which working mums can claim from the taxman if a grandparent is helping to care for the child.

These were among the measures announced yesterday to ease the cost of raising children so couples may be encouraged to have more.

Mr Lim Hng Kiang, chairman of the steering group on population, which unveiled a comprehensive baby package yesterday, noted that the Government cannot dictate when couples should have children.

'But, at the same time, we believe there is a role for the Government and the community at large to provide a conducive framework for couples and families to raise their children,' he said.

This is because government surveys and feedback given indicate that 'cost consideration is an important factor in the couples' decision for how many children they want to raise.'

The monthly maid levy will be cut from $345 to $250 for families with children aged below 12. The others who can pay the lower levy: those aged 65 or older or people with parents or grandparents aged at least 65 staying with them.

This will cover more than half of current households with maids, and the estimated loss to government coffers is $90 million a year.

The lower levy was first announced by Prime Minister Lee Hsien Loong in his National Day Rally speech on Sunday.

One person who had been anxious to know how low it would get was administrative assistant Mrs M.S. Teo, 34.

'It may be just $95 less but any reduction is good as it helps to defray costs. It's really expensive to raise kids,' said the mother of two children aged five and seven.

Over the years, the maid levy has been a bugbear for many parents. Bank manager Ian Tan, 33, who has a maid to look after his two children aged four and seven months, said: 'A lot of people have said it is too high, but nothing happened for some time and I thought they were just flogging a dead horse.'

The Government had maintained that a certain amount was set to control the number of maids here. The $345 rate - set at 1998 - still applies to other employers who do not meet the criteria.

Manpower Minister Ng Eng Hen who was on the panel delivering the good news yesterday conceded that the lower levy will increase the number of maids here 'quite significantly'.

Hence, his ministry intends to reduce potential problems such as the working ties between maids and employers and will announce measures to beef up the quality of maids soon.

A new centre-based infant-care subsidy was also introduced yesterday. It will be given to parents with Singaporean babies aged two to 18 months. The maximum subsidy is $400 per month for a working mother, and $75 for a non-working mother.

It is the Government's recognition that the cost of infant-care programmes is high compared to childcare. Childcare subsidies remain unchanged as they are deemed adequate.

Mr Simon Mok, 32, an IT regional manager with a working wife and a nine-month-old daughter in infant care, was pleased as he now pays slightly more than $1,000 a month.

On whether the changes will prompt him to have baby No. 2, he said: 'One at a time. My wife and I have to review it year by year. It is 60 per cent financial concerns; and 40 per cent of the concern is whether we have the time.'

The role of grandparents in caring for grandchildren has also been given a boost, with a Grandparent Caregiver Relief.

A working mother who seeks the help of her parents or in-laws to care for her children aged 12 or below can claim a maximum deduction of $3,000. But she must be the only person claiming the relief for the parent.