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Planning For A Child

Parenthood! It is one of the most fulfilling milestones you may experience in life and also one that will bring about many changes. Planning ahead financially will help you address the needs and challenges that go along with the patter of little feet right through to their financial independence.

Your 1st Steps​
 
Planning for a child can be one of the most exciting and transformational steps in your parenthood journey. Before your child is born, you may like to start thinking about your financial resources and child care arrangements. 

There are several schemes to support parents and families. You c​an visi​t heybaby.sg for information on a range of support measures from the Government to defray child-raising costs, including for healthcare and preschool. One example is the Baby Bonus Scheme that provides you with a cash gift and a special savings account (Child Development Account) to help lighten the cost of raising your child. Your child will receive a dollar-for-dollar match for savings deposited into this account, which can then be used to pay for approved expenses at authorised institutions.


Find out more details here.

As your family grows, you may need more room and wish to upgrade to a bigger house. Consider buying a property that is within your means, so as not to over stretch yourself financially. 

Here is a quick way to estimate how much you may need for a bigger house.


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In the midst of your excitement and joy, it is important for expecting mothers to take care of your health during pregnancy. You should consider getting prenatal care to provide you with advice and conduct regular medical examinations on the health of the baby. While medical costs will be an inevitable part of the maternity period, knowing what help is available to manage these costs is important when planning your finances for this life-changing phase. 
 
MediSave Maternity Package

The MediSave Maternity Package lets you use your MediSave for the pre-delivery medical expenses, deliveryexpenses and daily hospital charges, for your first four children. For the fifth and subsequent child, you and your spouse will need to have a combined MediSave balance of at least $15,000 at the time of delivery, in order to use your MediSave savings for the delivery and pre-delivery medical expenses. This ensures that you and your spouse have sufficient savings in your MediSave accounts for other healthcare needs in the future. The MediSave withdrawal limit applicable under the MediSave Maternity Package will depend on the delivery procedure (normal delivery or caesarean). 

For more info on the MediSave Maternity Package, click here.

 Maternity Leave

Working parents can apply for Government-Paid Maternity Leave​ benefits as long as you have been in employment for at least 90 days in the year preceding the birth of your child. 

Working mothers are entitled to a total of 16 weeks’ maternity leave, and you will be allowed to absent yourself from work four weeks immediately before and 12 weeks immediately after delivery. If you are a working father, you are eligible for one week of paternity leave. In addition, you will be entitled to one week of your wife’s paid maternity leave, under the Shared Parental Leave scheme. Find out mor​e.


MediSave Grant For Newborns


All eligible newborns born on or after 1 January 2015 will receive a MediSave grant of $4,000 in his or her MediSave Account automatically after birth registration.  Those born on or after 26 August 2012, but before 1 January 2015 were eligible for $3,000.
 
If Your Child Falls Ill
 
Childhood illnesses are common but should your child need to be hospitalised, your MediSave savings can be used to pay for the hospitalisation expenses. Do note that the use of MediSave is subject to approved outpatient treatment expenses at participating restructured or private hospitals, and is also subject to withdrawal limits.

Estimate how much you can claim from MediSave using this calculator.

 

MediShield Life

From 1 November 2015, MediShield Life has replaced MediShield.  The new MediShield Life:

 

  • Offers better protection and higher payouts, so that patients pay less MediSave/cash for large bills.
  • Covers all Singapore Citizens and Permanent Residents, including the very elderly and those who have pre-existing illnesses.  All Singaporean newborns, including those with congenital and neonatal conditions are also automatically covered.
  • Offers protection for life.

 

Newborns who are registered as Singapore Citizens at birth are insured under MediShield Life from birth.  The Central Provident Fund Board will notify his/her parent (usually the father) of the newborn's MediShield Life coverage details generally within 1 mont of the start of the MediShield Life Cover.

You can read more at www.medishieldlife.sg.

 

Caring For Your Child         

Child care arrangements can affect how you and your spouse manage your work and time. Whether at home or in a childcare centre, it is important to consider your child's development and any additional costs that you may incur.

Parental Care
If you or your spouse decides to stop working and provide full-time home-based child care, your household income will be reduced. Plan ahead for alternative sources of income or manage your expenses so that your debt obligations (eg. housing or car loans) are met.

Child C​are by a Baby Sitter or Relative
Hiring a baby sitter or paying a relative to care for your child will increase your monthly expenses. You may use child care centres' charges as a guide, in deciding on a fair amount to pay them. This can range from a few hundred dollars to over a thousand dollars each month.

Child Care by Foreign Domestic Worker
Many working parents in Singapore may hire a foreign domestic worker to help care for their child while they are at work. Do note that if you choose this option, you will have to pay a levy for the foreign domestic worker on top of the salary. However, families with children aged 12 and below, or with elderly persons aged 65 and above, are able to apply for levy concessions. For more information on hiring a foreign domestic worker and the applicable levy rate, click here.
 
Centre-based child care
Child care centres can be a convenient option that allows you to drop-off and pick-up your child, depending on you or your spouse's daily transport arrangements. Whether it is infant, child or student care, do consider the quality of care, costs and flexibility when making a decision. 

Find out which Child Care Centre is most convenient for you here​​​.


Planning Your Child's Education

Education is a key pillar of your child's life. By planning early, you will be well placed to decide on the best options to finance your child's education. Having a savings plan for each child can be helpful and by planning early, time becomes your ally as you will benefit from the effect of compounding interest. ​​

You can also use the monies from your Ordinary Account to pay for your child's local tertiary education at approved educational institutions, under the CPF Education Scheme. Do note that there is a limit on the amount of CPF savings that can be used for education.

If your child uses your CPF savings for his/her education, he/she will need to repay this loan (including interest accrued) to your CPF account, one year after graduation or the termination of studies, whichever is earlier. This will ensure that you have sufficient savings to meet your basic retirement needs in the future.

You have the option of waiving the repayment of the education loan if you are aged 55 and above and have set aside the Full Retirement Sum or the Basic Retirement Sum with sufficient property charge/pledge in the Retirement Account.


Find out more on the CPF Education Scheme.


Dependants' Protection Scheme

Unexpected events can disrupt even the best laid plans. Insurance coverage can help protect you and your loved ones against the unexpected.

The Dependants' Protection Scheme is an affordable term insurance that provides coverage of up to $46,000. The Dependants' Protection Scheme benefit will be paid out to you and/or your family members should you become permanently unfit for work or pass ​away. You can use the monies from your Ordinary Account and/or Special Account or cash to pay for the annual premiums.

For more information, click here.


CPF Nomination

If you pass on, your CPF savings will be transferred to the Public Trustee for distribution to your family under the intestacy laws of Singapore, which ensures that the interests of your family members are safeguarded. For Muslims, your CPF savings will be distributed according to the Inheritance Certificate, which your family members can obtain from the Syariah Court (Muslim inheritance law).

If you wish to distribute your CPF savings differently, you will need to make a CPF nomination. If you had made a CPF nomination before the birth of your child, you may wish to make a new nomination to include your newborn.

For more information on nominations, please cli​ck here.​


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Having a child will change the way you manage your finances. Early planning can help you better decide on the options to meet your child’s education, healthcare and other needs.

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