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Singapore Budget 2023
Over the past three years, Singapore has faced a challenging journey battling the Covid-19 pandemic. However, through collective efforts and trust in each other, a new milestone has been reached as the country charts its way forward in a new post-pandemic era. Budget 2023 has been set out to secure a brighter future by keeping the economy competitive and innovative, equipping workers, and providing a fuller range of opportunities for everyone to reach their potential.
The social compact will be strengthened, providing more assurance for families, seniors, and the more vulnerable in the community. Collective resilience will be built so that Singaporeans can continue to support each other and bounce back stronger from external disruptions and shocks. Although the road ahead is not easy for a small country in a globally uncertain environment, Singaporeans can draw confidence and strength from how they have overcome past challenges. Together, a better tomorrow can be secured for Singaporeans and future generations.
In 2023, the Singaporean government is implementing measures to support its citizens in coping with the rising daily expenses caused by the increase in inflation and GST. These measures are aimed at providing assurance and relief to Singaporeans who may be impacted by these changes. Through these efforts, the government aims to ease the financial burden on its citizens and ensure that they are able to maintain their standard of living. By prioritizing the needs of its people, the government is working towards a more resilient and prosperous future for Singapore.
$700 Cash Payout for Lower-Income Citizens in 2023 under Permanent GST Voucher Scheme
In order to mitigate the impact of the elevated Goods and Services Tax (GST) rates, an enhancement of the permanent GST Voucher program is underway. Lower income Singaporeans are set to receive a cash payout of $700 through the Permanent GST Voucher Scheme. This initiative is aimed at supporting and providing financial relief to those who may be more vulnerable to the impact of the GST increase. By providing this cash payout, the government aims to ease the financial burden on lower income Singaporeans and ensure that they are able to maintain their standard of living. This is part of the government’s broader efforts to create a more inclusive society and ensure that all Singaporeans are able to benefit from the country’s growth and development.
Specifically, the GSTV-Cash component is set to be augmented, with a rise to $700 in 2023, and further escalation to $850 commencing from 2024. It is worth noting that currently, the GSTV-cash amount stands at $500, and is only available to eligible lower income Singaporeans living in dwellings with an annual value of $13,000 or less, which encompasses all HDB properties below this threshold.
In addition, eligible lower income Singaporeans residing in homes with annual values exceeding $13,000 but not exceeding $21,000 can expect an increase in their GSTV Cash component from $250 to $350 in 2023, and subsequently to $450 starting from 2024.
To be eligible for the GSTV – Cash Special Payment, recipients must meet the following criteria:
- Be a Singaporean citizen who is 21 years or older in 2022
- Have an Assessable Income (AI) for Year of Assessment (YA) 2021 that does not exceed $34,000
- Reside in a home with an Annual Value (AV) not exceeding $21,000 (as indicated on their NRIC)
- Not own more than one property.
About The One-Time Assurance Package (AP)
Under the Assurance Package (AP), various forms of one-time assistance will be provided, including a Cost-of-Living Special Payment ranging from $200 to $400.
The Singaporean government will provide a top-up of $3 billion to the Assurance Package to help citizens cope with the current period of higher inflation. The following measures will be implemented:
- Cash: The AP cash payout for Singaporeans aged 21 and above, previously announced as $100 to $400 over five years, will be increased to $300 to $650 over the same period, totaling $700 to $2,250.
- Top-ups to CDA/ Edusave/ PSEA for Children: Families with children can expect additional top-ups of $400 to their child’s Child Development Account (for children aged 6 and below) or $300 to their child’s Edusave account or Post-Secondary Education Account (for older children).
- Cost-of-Living Special Payment: Eligible adult Singaporeans will receive between $200 to $400.
- Cost-of-Living Seniors’ Bonus: Eligible Singaporean citizens aged 55 and above will receive between $200 to $300.
- CDC Vouchers: All Singaporean households will receive an additional $100 in CDC Vouchers, bringing the total to $300 in January 2024.
- U-Save Rebates: Eligible HDB households will receive up to $760 in U-Rebates with the doubling of the U-Save Rebates over three disbursement tranches in 2023.
These measures are aimed at providing financial relief to citizens and supporting families with children, the elderly, and those who may be more vulnerable to the impact of inflation. By prioritizing the needs of its people, the government is working towards a more inclusive and resilient Singapore.
Strengthening & Building Families
First-time families who meet the eligibility requirements will receive an additional $30,000 to aid in their purchase of resale flats
HDB to Offer Increased Support for First-Timer Families Purchasing Resale Flats In order to assist genuine first-timer families in starting their families and purchasing their first home, HDB will be providing more assistance. Eligible first-timer families who are purchasing 4-room or smaller resale flats will receive an increase of $30,000 in CPF Housing Grant, while those purchasing 5-room or larger flats will receive an increase of $10,000. This will be implemented immediately, and the extra grant amount will be credited to their CPF accounts starting in April 2023.
Increase in Baby Bonus Cash Gift to $13,000 Announced
In an effort to provide greater assistance to families, particularly during the critical early stages of a child’s life, the Baby Bonus Cash Gift will be raised by $3,000 for all eligible Singaporean babies born on or after 14 February 2023.
Specifically, eligible first and second children will receive an amount of $11,000, while eligible third and subsequent children will receive $13,000.
As part of efforts to provide more even distribution of the Baby Bonus, disbursements will now be restructured to span a longer duration, extending up to when the child reaches 6 and a half years of age, and continuing until the child enters primary school.
Also, extension of One-Off Baby Support Grant to Cover Children Born from October 1, 2022 to February 13, 2023 Announced.
Singaporean Children Eligible for Increased First Step Grant of $2,000 and Higher Government Co-Matching Cap
The First Step Grant is a monetary award granted to every Singaporean child born from 24 March 2016 onwards, which is automatically credited to their Child Development Account.
Effective from 14 February 2023, the First Step Grant will be raised to $5,000 for all children born on or after that date.
Increase in Government Co-Matching Cap for CDA to $4,000 for First Child and $7,000 for Second Child, with Existing Caps Remaining for Third Child Onwards:
Working Mother’s Child Relief – First Child To Be Fixed At $8,000
As of the Year of Assessment 2025, working mothers in Singapore with eligible children born or adopted on or after 1 January 2024 will receive a fixed dollar relief of $8,000, in place of the current percentage-based system for tax relief on earned income. This modification will provide more equitable assistance for eligible working mothers with lower to middle incomes, as the same amount of tax relief will be available to all eligible mothers for a child in the same birth order, regardless of earned income.
It is important to note that for Singaporean children born or adopted before 1 January 2024, there will be no changes to the Working Mother’s Child Relief that is currently claimable.
CPF Monthly Salary Ceiling Set to Increase to $8,000 by 2026
In order to ensure that Singaporeans are able to save sufficiently for their retirement, the CPF monthly salary ceiling will be increased from $6,000 to $8,000 in 2026. This adjustment is necessary to keep up with the rising salaries, as the last time the CPF salary ceiling was raised was back in 2016.
To facilitate a smooth transition for both employers and employees, the CPF increases will be implemented gradually over a period of four years, commencing from 2023.
Increase in CPF Contribution Rates for Older Workers
Also, in accordance with the suggestions made by the Tripartite Workgroup on Older Workers, CPF contribution rates for senior employees have been raised and will continue to rise.
Strengthening Our Workforce and Boosting Economic Growth
Lower-Income Platform Workers to Receive CPF Transition Support for Increased Contribution Rates and Protection
As part of enhancing protection for platform workers, CPF contributions will be increased for workers under 30. Platform companies will also be mandated to pay CPF contributions for these workers. To alleviate the impact, the government will offer CPF Transition Support for the first 4 years after implementation to lower-income platform workers facing increased contribution rates.
Retirement Sum Scheme to Increase Minimum CPF Monthly Payout to $350 for Seniors
To enhance the retirement support for seniors, the minimum monthly payout for individuals on the Retirement Sum Scheme under the CPF will increase to $350 per month.
Buyer’s Stamp Duty (BSD) For Property, Vehicle, Corporate Income & Tobacco Taxed To Be Increased
source: MOF/ Budget 2023
Effective immediately from 14 February 2023, there will be an increase in taxes for property, cars, and tobacco. Specifically, the Buyer’s Stamp Duty (BSD) will have higher marginal rates for higher-value residential and non-residential properties.
For residential properties, a 5% tax will be imposed on the portion of the property value exceeding S$1.5 million and up to S$3 million, while those exceeding S$3 million will be taxed at 6%, up from the present rate of 4%. These changes are anticipated to impact 15% of residential properties.
For non-residential properties, a 4% tax will be levied on the value of properties in excess of $1 million and up to $1.5 million, while properties exceeding $1.5 million will be taxed at 5%, an increase from the current 3%. This is expected to impact 60% of non-residential properties.
Furthermore, to discourage tobacco consumption, the government will increase the excise duty on all tobacco products by 15%, with immediate effect.
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