Raising a child in Singapore needn’t break the bank. We outline how the Parenthood Tax Rebate and other government schemes can help.
Whilst there are many joys that come with having children, there’s no denying it’s an expensive endeavor.
Even before you welcome junior into the world, you’ll need to find good maternity services for a smooth and comfortable delivery. Along with it comes the gynae fees and other costs associated with giving birth.
As your child grows up, you’ll find yourself forking out money for tuition, textbooks, clothes, toys and other necessities to cater to their developing needs. Just taking your family out for lunch or to the movies can be costly too, especially when you compare it to date nights before the little ones came along.
That being said, parents can tap on government rebates to make the financial burden a whole lot lighter. The Parenthood Tax Rebate, a one-time tax abatement scheme, is particularly helpful. Without getting too technical, we outline what you need to know and answer your burning questions.
What exactly is the Parenthood Tax Rebate (PTR)?
The PTR is a government tax relief scheme, given to Singapore tax residents to encourage them to have more children. It can be claimed in the year following your child’s birth. If your child was born or adopted after 2008 and meets the qualifying conditions, you can make a PTR claim too.
You can make a claim for each child you have. As the PTR is a one-off rebate, it can only be claimed once for each qualifying child.
If your child was born or adopted before 1 Jan 2008, you will not be able to claim PTR for your first child. That said, you can claim PTR for subsequent children if they meet certain conditions.
How much can I claim?
Parents can claim a one-time amount of $5,000 for their first child, $10,000 for their second, and $20,000 for their third and each subsequent child. Any unutilised balance is automatically carried forward and offsets your future payable tax.
Note that the overall maximum amount of personal income tax reliefs claimable by an individual in a year is capped at $80,000.
Who qualifies for the PTR?
As per IRAS regulations, you must be a Singapore tax resident who is married, divorced or widowed in the relevant year.
Your child has to be born on or after 1 Jan 2008, and must be a Singapore citizen at the time of birth or within 12 months thereafter.
If your child is adopted, they need to be legally adopted on or after 1 Jan 2008. They must be a Singapore citizen at the time of legal adoption or within 12 months thereafter.
Parents can also make a claim if they get married after a child’s birth, but will need to register them before the age of six. Check out the IRAS website for full qualifying details. You can use this nifty PTR eligibility tool to check your eligibility as well.
Can both parents claim the PTR?
You can’t make a claim for each child more than once. But as long as you and your spouse are tax-paying residents, you can share the PTR to offset payable income tax, based on an apportionment agreed.
If your income tax for that year is less than the rebate, the unutilised amount will be carried forward to offset your tax in subsequent years. This goes on until the rebate is fully utilised.
Any unutilised amount may also be transferred online from your account to your spouse's account. All you need to do is log in to IRAS’ myTax Portal to view your PTR balance and transfer it to your spouse.
Can I still claim the PTR if I’m divorced?
Yes, you and your ex-spouse may continue to utilise any remaining PTR balances in your respective accounts to offset your tax. If you’re both unable to agree on the apportionment, IRAS will apportion the PTR equally between you.
Can I claim the PTF if I’m giving up my child for adoption?
If your child was given up for adoption after the year of birth, parents are not entitled to any PTR once the adoption is legalised. Your remaining PTR balance will be forfeited as well.
If your child was given up for adoption in the year of birth itself, you are not entitled to the PTR.
How do I claim the PTR?
You can make a claim when e-filing your income tax returns. Simply follow these steps:
1. Login with your Singpass or Singpass Foreign user Account (SFA) at myTax Portal.
2. Go to Individuals > “File Income Tax Return”.
3. Select “Edit My Tax Form”.
4. Go to “Deductions, Reliefs and Parenthood Tax Rebate”.
5. Go to “Parenthood Tax Rebate (For NEW Claims Only)”.
6. Click “Update” and enter your claim.
If you’ve made a claim previously, there’s no need to make another claim the following year. Any unutilised balance will be automatically carried forward to offset your future tax payable.
Other schemes that parents can tap on
As a working parent, there are other useful government schemes to take advantage of, especially if you’re a working mother or have a domestic helper.
#1 Foreign Domestic Worker Levy (FDWL) relief
What it is: The FDWL relief is given to encourage married women to stay in the workforce.
Married women, divorcees and widows with school-going children may claim relief for foreign domestic worker levy paid in the previous year.
FDWL relief can only be used to offset your earned income (income derived from employment, pension, trade, business, profession or vocation, less allowable expense). Singles and married men are not eligible for this relief.
How do I qualify?
To claim this relief for the Year of Assessment (YA) 2021, you must satisfy the following prerequisites:
- You or your husband employed a foreign domestic worker in 2020
- In addition, in 2020, you were:
(a) married and lived with your husband; or
(b) married and your husband was not a tax resident in Singapore; or
(c) separated from your husband, divorced or widowed and had children who lived with you and on whom you could claim child reliefs.
How much is claimable?
You may claim twice the total foreign domestic worker levy paid in the previous year, on one foreign domestic worker.
As per IRAS website, the current levy rate for the first foreign domestic worker (FDW) employed, not on concession, is $300 per month. For subsequent FDW(s) employed, not on concession, the levy rate is $450 per month.
Visit the website for a more detailed illustration of the maximum FDWL you can claim.
#2 Working Mother's Child Relief (WMCR)
What it is: The WMCR is a tax rebate scheme given to reward families with children who are Singapore citizens. It also encourages parents to take up Singapore citizenship for their children, and married women to remain in the workforce after having children.
How do I qualify?
To claim this relief in the Year of Assessment (YA) 2021, you must satisfy all of the following prerequisites in 2020:
- Be a working mother who is married, divorced or widowed
- Have taxable earned income from employment, through pensions, trade or business, or through a profession or vocation.
- Maintained a child who is a Singapore Citizen as at 31 Dec 2020 and has satisfied all conditions under the Qualifying Child Relief (QCR) / Handicapped Child Relief (HCR).
How much is claimable?
You may claim 15% of your earned income for your first child, 20% for your second child and 25% for your third and subsequent child. The total amount claimable is capped at 100% of your earned income, with a total personal income relief cap of $80,000.
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