Channel NewsAsia
Updated: 02/26/2013 01:47 | By Channel NewsAsia

Budget 2013: Govt to spend S$1.7b to help households cope with rising cost of living

Budget 2013: Govt to spend S$1.7b to help households cope with rising cost of living


Budget 2013: Govt to spend S$1.7b to help households cope with rising cost of living

SINGAPORE: The government is helping households cope with increases in the cost of living by doling out some S$1.7 billion in direct handouts.

All taxpayers will also receive a personal income tax rebate. Those below 60 years old will receive a rebate of 30 percent, capped at S$1,500. Those above 60 will get a higher rebate of 50 percent, subject to the same cap.

The move will cost the government some S$615 million.

The range of direct handouts includes GST Voucher, Medisave top—ups and rebates on service and conservancy charges.

The GST Voucher scheme aims to help families offset some of the Goods and Services Tax (GST) they pay each year.

Some 1.4 million Singaporeans from lower— and middle—income households will receive double the amount of assistance this year.

This can come in the form of cash, Medisave or U—Save payments.

For example, those currently living in a 3—room flat will now receive a U—save rebate of S$480 to help them offset their utilities bills, instead of S$240.

The first half will be paid in July this year, and the rest in coming January.

The cash, Medisave and U—Save payouts are expected to cost the government an extra S$680 million.

The measures were announced by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam in his Budget Statement on Monday.

"When we established the permanent GST Voucher scheme last year, we set aside $3.6 billion to finance the scheme until fiscal year 2016. To underscore our commitment to help offset what our lower income Singaporeans pay in GST, I will top up the GST Voucher Fund by another $3 billion. This will ensure sufficient funds for the government to make the yearly GST Voucher payouts up to fiscal year 2020," said Mr Tharman.

All households will also enjoy rebates of between one month and three months on their service and conservancy charges, with those living in smaller flats receiving more. The rebates will cost the government S$77 million.

Singaporeans aged 45 years and above will also receive a S$200 top—up to their CPF Medisave accounts for their healthcare expenses.

The top—up will benefit 1.5 million Singaporeans and cost the government S$300 million.

Mr Tharman said all the direct assistance measures will provide significant financial help to Singaporeans, with the elderly receiving the most help.

For example, a retiree couple living in a 3—room flat can receive S$3,000 in benefits, nearly half of which will be for Medisave.

A middle—income family living in a 4—room flat will get about S$1,500 in benefits.

Families with dependents such as children, elderly parents and disabled family members will also get additional relief if they hire a foreign domestic worker.

From next month, they will pay a lower concessionary levy of S$120 per month, instead of the current $170.

The change is expected to cost the government an additional S$73 million.

— CNA/ir

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