Higher subsidies for child, infant care for lower and middle income families from 1 Apr 2013

By Monica Kotwani, Channel NewsAsia, 23 Jan 2013

From April, 120,000 households with young children will benefit from a new subsidy framework aimed at making childcare and infant care more affordable.

Acting Minister for Social and Family Development Chan Chun Sing announced the new framework after a visit to YWCA Child Development Centre on Wednesday.

All parents will continue to receive a basic subsidy of S$300 a month for childcare and S$600 for infant care services.

Families with a gross monthly income of S$7,500 and below will receive an additional subsidy.

Eligible families using full-day programmes will see an increase in their current child care subsidies of at least S$100 and infant care subsidies of at least S$200, with lower-income families receiving more.

The final maximum total subsidy could be as high as S$740 for full-day childcare, and S$1,140 for full day infant care programmes. However, they are subject to a minimum co-payment sum that parents must pay out-of-pocket.

For example, a lower-income household with a monthly income of S$2,500 and below will get an extra S$440 for a basic full-day childcare programme. This will bring its total subsidy to S$740, subject to a minimum co-payment by parents.

The additional subsidy will replace the Centre-Based Financial Assistance Scheme for Child Care (CFAC), which provides child care-related financial assistance for families earning S$3,500 and below.

Up to two-thirds of households will benefit.

Mr Chan said this will mean more affordable access to childcare for the low and middle income households.

He said: "Those at the lowest income bracket may be able to have access to childcare for as low as a few dollars a month. In general, every family will spend [around] three to seven per cent of their household income on childcare fees, and this would put us in the top half of the OECD (Organisation for Economic Co-operation and Development) affordability index."

Mr Chan said the subsidies will cover a large part of costs, as the median cost of a full-day childcare programme in an HDB estate is about S$615.

Families that exceed the monthly household income of S$7,500, can still apply for additional subsidies based on their household's per capita income.

This will be determined by calculating the gross monthly income for the household, and divided by the number of family members living in the household.

Lower-income families earning S$3,500 or less can also apply for the S$1,000 start-up grant, which can be used to cover initial costs of placing a child in the centre -- for example, paying a deposit, registration fees and uniforms.

The new subsidies come after other measures were announced on Monday as part of the government's Marriage and Parenthood Package. These include bigger and more generous baby bonuses as well as paternity leave.

As for concerns that higher subsidies would result in childcare operators increasing fees, Mr Chan said this would be closely monitored.

He said: "This risk will be much higher if we have applied a universal subsidy across the board. We are really focusing the help on lower- to middle-income families, and the risk of childcare operators raising prices universally is mitigated.

"On top of that, the other ways we can manage the price rise are through attracting better quality anchor operators, which I will announce in the second quarter of this year, and also to look at the kind of quality programs that they conduct. We will also be expanding the number of centres and increase the pool of teachers available in the sector."

The new subsidy framework will increase the government's investment in child and infant care by S$105 million and bring the total budget for government spending in this area to about S$360 million for financial year 2013. This will come into effect from April 1.

Less risk of fee increases as new subsidy is tiered: Minister
By Jessica Cheam, The Straits Times, 24 Jan 2013

THE Government will keep a watchful eye on operators of childcare centres to ensure they do not raise fees in the wake of the higher subsidies being offered to parents.

Acting Minister for Social and Family Development Chan Chun Sing made the pledge yesterday, in a move to assure parents who had complained about such a tendency among the operators.

He also said it was less likely to happen this time because the new subsidy system is tiered. "The risk will be much higher if we applied a universal subsidy across the board... (Now) we are focusing the help on lower- to middle-income families and the risk of childcare operators raising prices universally is mitigated."

Mr Chan added that the Government can keep prices competitive by having more centres and roping in more anchor operators to raise the number of teachers and quality of childcare.

In addition, his ministry is encouraging operators to site childcare centres where there is greater demand, preferably where people live, where they work, and where their grandparents live.

Recently, the Government said it would set up a statutory board to oversee the sector, give better training to teachers, and rope in more anchor operators.

Details of how these operators can be involved will be released in the second quarter of the year, he added.

Childcare operators said yesterday that higher subsidies do not mean higher fees.

Ms Sandy Koh, manager of YWCA's (Young Women's Christian Association) 10 childcare centres, said a fee hike is unlikely unless costs soar beyond the fees charged.

Its last hike was in 2010, when fees for nursery programmes went up by $130 to $690, and those for kindergarten by $120 to $630.

Parents laud subsidies for childcare

Govt move will ease financial burden, given recent fee hikes by operators

By Janice Tai, The Straits Times, 24 Jan 2013

AS PHOTO frame makers, Madam Shen Boon Keow, 46, and her husband, 50, bring home a total of $2,000 every month.

Unable to afford a maid, they had to send their six-year-old son to a childcare centre, though its $330 monthly fees eat up a chunk of their finances. To cut expenses, they rarely venture out on weekends, preferring the pocket-friendly mode of watching TV at home.

But with the Government's latest move of giving more subsidies to make childcare services more affordable for lower- and middle- income families, they will soon pay just $3 a month from April.

On the other end of the spectrum are middle-income families like Mr Adrian Tan's. With a monthly household income of $7,000, the sales engineer is able to quite comfortably fork out some $700 every month in childcare fees for his two children aged six and four. Yet the 37-year-old still feels the pinch from the rising costs of living and cuts back on enrichment programmes for them.

"When we go swimming, my son would ask me if he could go for lessons as he is still using a float. I told him maybe when he is older when we have more savings," said Mr Tan, who will now save $200 when the additional subsidies kick in. He intends to enrol his children for lessons.

Families with five or more members - including more than two dependants - who bust the $7,500 household income criterion can still apply for subsidies based on their per capita income. If it is $1,875 and below, they may still receive them.

Childcare operators that The Straits Times spoke to say the move is timely, given the recent childcare fee hikes. Over the last two to three years, there have been fee increases ranging from $50 to $400.

"Rental fees and teachers' salaries have shot up, so the centres have to increase the fees to stay viable," said Ms Lurvin Lee-Yuen, director of childcare chain Just Kids Learning Place.

She added that the latest subsidies will reduce the incidence of low-income families sending their children to school late, resulting in possible learning loss.

"Parents with many children tend to either delay sending them to childcare or they send them for a shorter-hour programme to save money... They may lose out in areas like social skills if they are left at home with grandparents."

Madam Nurasitin Md Shamhudi, 29, sent three of her children to infant-care programmes when they were just 18 months old but when one more came along, she could no longer afford to do so. Her youngest child attended childcare only at four years old. "My household income was $2,500 then and sending four of them to childcare ate up about half of that, so we had no choice."

The subsidies have tipped the balance for parents previously hesitating to send their children to childcare services. "We struggle to put food on the table so we were cautious. But now I am definitely sending my twin boys there so that they can learn and mingle with others," said Madam Faridah Markalee, 28, whose household income is $1,500.

Though parents and childcare operators welcomed the added financial help, they hope more can be done to raise the quality of childcare. Acting Minister for Social and Family Development Chan Chun Sing said yesterday that the ministry will be looking into the training of teachers.

Said Mr Francis Ng, founder of childcare centre chain Carpe Diem: "Besides training teachers, we need to embark on research and development to enhance the curriculum and foster a culture where operators can discuss and share these resources."

* Pay criterion for new child subsidies clarified
By Stacey Chia, The Straits Times, 17 Jun 2013

THE Early Childhood Development Agency (ECDA) has clarified how parents should apply for the new government childcare subsidies, after some reported that they were confused about how to calculate their gross monthly household income.

The Straits Times spoke to three pre-school operators, who said that between them, at least 15 parents thought this income referred to only their basic monthly salaries. But a spokesman for the agency said gross monthly household income includes allowances, commissions and bonuses.

The new child and infant-care subsidy framework took effect on April 1. Under the scheme, parents will continue to enjoy a basic subsidy at the current rates of up to $600 and up to $300 for infant care and childcare respectively.

On top of that, those with gross monthly incomes of $7,500 and below will also get additional subsidies of between $100 and $440 for childcare, and between $200 and $540 for infant care.

These are dependent on household income level. For example, a couple with one child in a full- day childcare programme, and a monthly household income of between $4,501 and $7,500, can receive an additional subsidy of $100. Those with a monthly household income of $4,001 to $4,500 can get an additional sum of $220.

The ECDA spokesman said that parents can use the online subsidy calculator which can be found on the Child Care Link portal. This will estimate the amount of subsidy they will be eligible for with bonuses and allowances included in the calculation.

For applicants who are salaried employees, their income will be based on the average monthly pay received over the last available 12-month period, including bonuses and allowances.

For the self-employed, it will be based on monthly income derived from the last available net trade income assessed by the Inland Revenue Authority of Singapore within the last two assessment years.

Engineer Martin Lee, 34, pointed out ECDA's brochure and online page of frequently asked questions did not state that payments like bonuses and commissions would be included - only that monthly household income is based on gross combined pay of parents.

Mr Lee, who has a two-year- old son in Eager Beaver Schoolhouse, initially thought he would qualify for an additional subsidy of $100. "You can't expect parents to have the time to click on all of the links on the website. It should be in the brochure that parents are most likely to read."

Mrs Geraldine Ong, 33, who also sends her two children to Eager Beaver Schoolhouse, said it was "disappointing" to find out that her family is not eligible for the additional subsidy due to bonuses and allowances. "We get a transport allowance because we have to travel a lot for work, but yet we are being penalised," said Mrs Ong, an operations coordinator.

The ECDA spokesman said the agency will consider appeals on a case-by-case basis.

Ameba Schoolhouse centre director Xinhui Liaw-Tan said several parents whose monthly household incomes exceed $7,500 have sent in appeals to the ECDA, and all except one have been granted the additional subsidy.

The new subsidy framework is part of the Government's efforts to improve accessibility, quality and affordability of early childhood education. Overall, two- thirds of households - about 120,000 families with young children - will qualify, costing the Government $105 million a year.

Ms Denise Phua, deputy chairman of the Government Parliamentary Committee for Social and Family Development, said that while the ECDA's website has a lot of useful details, "it appears the critical information of the definition of gross income is not easily found".

"It is good to also ensure that those who are not Internet-savvy have access to such critical information through other means," she added.

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