Singapore Budget 2014

Five ways the measures announced in Budget 2014 will affect you

Post Budget round-up by Maria Almenoar

Pioneer Generation

1. To qualify for the Pioneer Generation, you must have been at least 16 years old in 1965. Anyone who qualifies will get the benefits regardless of income and will get them for the rest of their lives. In total about 450,000 Singaporeans fulfil the criteria. Those who have just missed out may appeal.

2. The Pioneer Generation will get an additional 50 per cent off already subsidised bills at specialist outpatient clinics and polyclinics. This will start in September. In addition, from January next year, they will all qualify for the Community Health Assist Scheme (CHAS) which provides accessible and affordable medical and dental care.

3. From August, the Pioneer Generation will get annual Medisave top-ups of $200 to $800. They will also be given more flexibility to use their Medisave for a wide range of outpatient treatments.

4. All Pioneer Generation members will be covered under MediShield Life. Subsidies will be given according to age to ensure premiums for this scheme are affordable. At age 65, the subsidies will start at 40 per cent of the premium and will rise to 60 per cent by age 90. This will start end-2015. Those aged 80 and above in 2014 will have their premiums fully covered through premium subsidies and Medisave top-ups.

5. Those who have moderate to severe functional disabilities will get $1,200 cash a year.

Education

1. Lower- and middle-income families will get more help with kindergarten fees through the Kindergarten Fee Assistance Scheme (KiFAS). This means that more households will pay just $3 a month, down from as much as $75 previously.

2. The KiFAS scheme will be made available to all kindergarten anchor operators and all Education Ministry kindergartens.

3. Bursary amounts for students at the Institute of Technical Education, polytechnic and university level will be increased. For example, students from middle-income homes will see a $450 increase in their bursary amounts to $2,600 a year.

4. More students will also be eligible for bursaries. The Government is raising the per capita monthly household income threshold for bursaries from $1,700 to $1,900 from this academic year 2014. This will benefit students from two-thirds of all Singaporean households.

5. Families of children with special needs will get more subsidies for the Early Intervention Programme for Infants and Children. This programme includes educational and therapy support services. Those earning above median household income will benefit from a further 20 per cent to 50 per cent subsidy. This is on top of the $500 base subsidy available to all children enrolled in this programme.

Companies

1. The Productivity and Innovation Credit (PIC) scheme will be extended for another three years to 2018. Under the scheme, firms can get either tax deductions or cash grants when they invest in equipment to boost productivity. A new PIC+ scheme will be introduced. The expenditure cap for qualifying SMEs under the PIC+ scheme will be increased from the $400,000 under the PIC scheme to $600,000 per qualifying activity per Year of Assessment (YA) from YA 2015.

2. New industrial spaces that cluster companies within the same industry will be created. This will lower costs for small- and medium-enterprises as they will be able to consolidate their operations and pool resources.

3. The Lifelong Learning Endowment Fund will be increased by $500 million to $4.6 billion.

4. The Government is launching the ICT for Productivity and Growth programme, which will subsidise 70 per cent of the cost of information and communications technology products and services for SMEs. This is to encourage SMEs to adopt ICT. Companies piloting emerging technology will also get an 80 per cent subsidy from the Government for the qualifying costs, capped at $1 million. The Government will also subsidise SMEs' fibre broadband subscription plans of at least 100 Mbps.

5. To support companies who want to venture overseas, the Government will raise the support level for pilot and test-bedding projects from the current 50 per cent to 70 per cent under the Global Company Partnership.

Health care

1. Lower- and middle-income groups will get permanent subsidies so that they can fully pay their MediShield Life premiums out of regular Medisave contributions.

2. To ease the transition into MediShield Life, the Government will also provide subsidies to offset premium increases in the first few years. This will also cover those who have higher incomes.

3. From September this year, subsidies for specialist outpatient clinics for lower- and middle-income Singaporeans will be increased from the current 50 per cent to 70 and 60 per cent respectively.

4. Subsidies for medication will be enhanced as well. This will be introduced in early 2015.

5 Singaporeans aged 55 and above this year, who are not part of the Pioneer Generation, will receive an annual Medisave top-up of $100 to $200 over the next five years. The amount they are eligible for is based on the annual value of their home. This will be paid out in August.

CPF

1. The employer Central Provident Fund (CPF) contribution rate will be increased by 1 percentage point for all workers from January next year. This will go into the Medisave Account.

2. The CPF contribution rates for those aged 50 to 55 will increase by 1.5 percentage points, on top of the increase of 1 percentage point (refer to earlier point). This consists of 1 percentage point from the employer and 0.5 percentage point from the employee.

3. The employer contribution rate for CPF for those aged 55 to 65 will increase by 0.5 percentage point.

4. For points 2 and 3, employer contributions will be put into the Special Account, while employee contributions go into the Ordinary Account. This will begin in January next year.

5. The Government is not expected to make further changes to total CPF contribution rates any time soon.

Reliefs

1. Those aged 55 and above this year and who earn $26,000 or less a year will get a one-off Seniors' Bonus of $100 or $250, depending on the value of their homes.

2. Housing Board households will get one-off GST vouchers, ranging from $90 to $260. HDB households, up to 4-rooms, will get one to three months rebate on their conservancy fees.

3. Disabled individuals will get more subsidies for their transport needs. The Government will provide subsidies to cover up to 80% for those who require dedicated transport services to access special education and care services. This will apply to the lower two-thirds of households. Lower-income households with disabled members will get subsidies of up to 50 per cent under a new Taxi Subsidy Scheme.

4. Parent relief and handicapped parent relief will be increased by up to $3,000, with those living with their parents getting a higher relief quantum. Parent relief can now also be shared among family members.

5. Individuals caring for a handicapped spouse, sibling or child will see their reliefs increase by $2,000.