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Budget: What help will middle-income earners get?
By Hoe Yeen Nie | Posted: 16 February 2011 1645 hrs
SINGAPORE: The concerns of the middle-income are expected to be addressed in the Budget this Friday, and observers hope it'll include rebates and tax reliefs to help this group cope with the rising cost of living.
Some are also suggesting reviewing the criteria for financial assistance programmes for the sandwiched class.
Help with education costs is top of the wish list for logistics manager William Song.
Mr Song earns an annual income of about S$92,000, which is comfortable by most standards.
Despite that, he says he feels the pinch from inflation, and worries about paying for enrichment classes for his two girls, aged 4 and 8 years old.
Mr Song's elder daughter, born in 2001, is not eligible for the Baby Bonus scheme, although her younger sister is.
The scheme awards cash gifts for children born on or after August 1, 2004, and those born after August 1, 2008 are given matching contributions from the government into their Children Development Account.
"When you have children, the priority is always your children. So you always hope that your children have the best things," Mr Song said.
"And you know children tend to compare when they go to school, so of course, my focus is that the government can put in more resources into the children's development and education."
Hit by rising costs, Mr Song says he has had to cut back on some household expenses, and thoughts of buying a weekend car were put aside, on the back of high COEs and fuel prices.
Mr Song says he hopes tax rebates, currently given to working mothers, can be extended to fathers too, especially if they are sole breadwinners like himself.
He's eyeing the Grandparent Caregiver Relief, which allows deductions of S$3,000 from earned income if a grandparent is looking after children aged 12 and below.
He also suggests raising the amount of Earned Income Relief, which has remained stagnant for years.
For working adults below 55 years, the rebate is S$1,000.
Those aged between 55 and 59 years old will get to deduct S$3,000 from their annual income, and for those 60 years old and above, it's S$4,000.
"Earned income relief is also a recognition for people to get employed. So I think maybe the government should move it to S$2,000 or S$3,000? Then the respective age groups should also move up appropriately," Mr Song said.
KPMG International Executive Services partner and head Ooi Boon Jin said he agreed that more tax reliefs could be awarded to men.
This includes extending the foreign maid levy relief to male taxpayers with a non-working spouse and at least three dependant children aged 16 years and below.
This, Mr Ooi says, will help support the family unit and could even encourage couples to form larger families.
Mr Ooi also suggests raising the zero income tax bracket.
Currently, about one-third of Singaporeans pay income tax. This means they earn over S$20,000 a year.
Mr Ooi says raising the qualifying bracket to even S$40,000 will bring relief to an estimated 330,000 lower-income taxpayers.
He adds that part of the revenue loss for the government would be offset by savings in administration costs.
As for those who don't earn enough to pay tax, one way is to review the criteria for financial assistance, to give breathing room to those feeling squeezed.
This includes raising the qualifying income cap, and looking beyond the size of the applicant's HDB flat.
MP for Pasir Ris-Punggol GRC Charles Chong said: "I've seen residents in five-room flats, extended families, two or three families in the five-room flat, all needing assistance.
"But they get very little assistance because they live in a five-room flat, compared to those living in one- or two-room flats.
"So I think we should fine tune the system to look at it more on a case-by-case basis".
MP for Ang Moh Kio GRC Inderjit Singh adds that given Singapore's strong economic performance last year, the government could disburse a one-off bonus of GDP shares.
"Just as we reward civil servants with a GDP bonus I think we can give money back to all Singaporeans - perhaps a S$500 cheque to all working adults and senior citizens," Mr Singh said.
"I think this S$1 billion-or-so bonus is worth spending to help all households in response to inflation."
Other MPs suggest Medisave top-ups to help with healthcare costs.
-CNA/wk
By Hoe Yeen Nie | Posted: 16 February 2011 1645 hrs
SINGAPORE: The concerns of the middle-income are expected to be addressed in the Budget this Friday, and observers hope it'll include rebates and tax reliefs to help this group cope with the rising cost of living.
Some are also suggesting reviewing the criteria for financial assistance programmes for the sandwiched class.
Help with education costs is top of the wish list for logistics manager William Song.
Mr Song earns an annual income of about S$92,000, which is comfortable by most standards.
Despite that, he says he feels the pinch from inflation, and worries about paying for enrichment classes for his two girls, aged 4 and 8 years old.
Mr Song's elder daughter, born in 2001, is not eligible for the Baby Bonus scheme, although her younger sister is.
The scheme awards cash gifts for children born on or after August 1, 2004, and those born after August 1, 2008 are given matching contributions from the government into their Children Development Account.
"When you have children, the priority is always your children. So you always hope that your children have the best things," Mr Song said.
"And you know children tend to compare when they go to school, so of course, my focus is that the government can put in more resources into the children's development and education."
Hit by rising costs, Mr Song says he has had to cut back on some household expenses, and thoughts of buying a weekend car were put aside, on the back of high COEs and fuel prices.
Mr Song says he hopes tax rebates, currently given to working mothers, can be extended to fathers too, especially if they are sole breadwinners like himself.
He's eyeing the Grandparent Caregiver Relief, which allows deductions of S$3,000 from earned income if a grandparent is looking after children aged 12 and below.
He also suggests raising the amount of Earned Income Relief, which has remained stagnant for years.
For working adults below 55 years, the rebate is S$1,000.
Those aged between 55 and 59 years old will get to deduct S$3,000 from their annual income, and for those 60 years old and above, it's S$4,000.
"Earned income relief is also a recognition for people to get employed. So I think maybe the government should move it to S$2,000 or S$3,000? Then the respective age groups should also move up appropriately," Mr Song said.
KPMG International Executive Services partner and head Ooi Boon Jin said he agreed that more tax reliefs could be awarded to men.
This includes extending the foreign maid levy relief to male taxpayers with a non-working spouse and at least three dependant children aged 16 years and below.
This, Mr Ooi says, will help support the family unit and could even encourage couples to form larger families.
Mr Ooi also suggests raising the zero income tax bracket.
Currently, about one-third of Singaporeans pay income tax. This means they earn over S$20,000 a year.
Mr Ooi says raising the qualifying bracket to even S$40,000 will bring relief to an estimated 330,000 lower-income taxpayers.
He adds that part of the revenue loss for the government would be offset by savings in administration costs.
As for those who don't earn enough to pay tax, one way is to review the criteria for financial assistance, to give breathing room to those feeling squeezed.
This includes raising the qualifying income cap, and looking beyond the size of the applicant's HDB flat.
MP for Pasir Ris-Punggol GRC Charles Chong said: "I've seen residents in five-room flats, extended families, two or three families in the five-room flat, all needing assistance.
"But they get very little assistance because they live in a five-room flat, compared to those living in one- or two-room flats.
"So I think we should fine tune the system to look at it more on a case-by-case basis".
MP for Ang Moh Kio GRC Inderjit Singh adds that given Singapore's strong economic performance last year, the government could disburse a one-off bonus of GDP shares.
"Just as we reward civil servants with a GDP bonus I think we can give money back to all Singaporeans - perhaps a S$500 cheque to all working adults and senior citizens," Mr Singh said.
"I think this S$1 billion-or-so bonus is worth spending to help all households in response to inflation."
Other MPs suggest Medisave top-ups to help with healthcare costs.
-CNA/wk
