Singapore govt unveils slew of tax reliefs for households
23/02/2010
By Imelda Saad/Satish Cheney, Channel NewsAsia
SINGAPORE: The government has introduced a slew of tax reliefs to support families, especially the middle-income and those with elderly and handicapped dependants.
For a start, those taking care of their parents and grandparents can expect greater tax relief of up to S$7,000.
Wives who are taxpayers can also claim a spouse relief of S$2,000 - similar to the current scheme for husbands.
Finance Minister Tharman Shanmugaratnam announced the measures in his 2010 Budget Statement on Monday.
The income threshold for dependant-related reliefs will also go up from S$2,000 to S$4,000.
Mr Tharman said this increase recognises taxpayers' efforts in supporting family members who are genuinely dependent, while giving them the flexibility to do some incidental work.
And in recognition of the extra resources needed to take care of the disabled, the income threshold for handicapped dependant-related relief will be removed.
For the elderly, there will be a one-off top-up of the CPF-Medisave Accounts of older Singaporeans aged 50 and above.
The older you are, the more you get.
For example, most Singaporeans aged 50 to 59 will get a top-up of between S$200 and S$300. Those aged 70 and above will get about twice as much, at S$400 to S$500. The majority of those aged 60 to 69 will get a top-up of S$300 to S$400.
The Medisave top-up will benefit about one million Singaporeans and cost the government S$310 million.
An additional S$200 million will also be set aside for Medifund - which supports needy Singaporeans - and another S$200 million for the ElderCare Fund to meet longterm healthcare needs.
For families with children, they can look forward to further top-up of the Post Secondary Education Accounts (PSEA).
For example, children in primary school will get S$200 in their accounts while those between 13 and 20 years old will receive up to S$500.
650,000 young Singaporeans will benefit from the additional top-up, which will cost the government S$230 million.
Other tax reliefs include those aimed at lifelong learning and encouraging donations to charities.
Tax relief for course fees will go up from S$3,500 to S$5,500, while the enhanced tax deductions for donations will be extended for another year.
All in, S$1.4 billion will be transferred to households this year. Including the Workfare Income Supplement (WIS) scheme targeted at low-income workers, the total sum transferred to households is S$1.8 billion.
While the benefits are for all Singaporeans, Mr Tharman said more will go to the lower and middle-income groups.
Take for example, a family living in a 3-room HDB flat. Two working adults - the husband earning S$1,800 and the wife S$800 a month - and living with an elderly parent. The wife will get S$1,100 through the Workfare Income Supplement. Together with payouts from existing schemes like GST Credits, senior citizens' bonus and others, the family can expect a total of S$2,900 in benefits this year.