This article was contributed and first published in TODAY on 4 February 2013.
With increasing life expectancy as well as low fertility rates, Singapore is faced with two key imbalances in its population: It is getting older and, due to low fertility rates, it will have fewer younger people to support this ageing population.
In the past fortnight, the Government has announced various schemes to encourage people to get married early and have children.
While these are extremely calibrated measures, the Government may wish to consider these suggestions to supplement and make its policies more effective.
First, the saying “prevention is better than cure” needs to be applied effectively.
The ageing population has to remain healthy, not only to reduce the Government’s medical bills but also to provide support to our younger generation who are willing to get married and have children.
The Government could incentivise adopting a healthy lifestyle by, for example, granting tax reliefs or rebates to individuals for obtaining gym or other memberships for physical exercise and weight management programmes — which they would have to prove they have attended.
Or they could provide enhanced tax deductions or rebates to companies for the expenses incurred in providing these benefits to employees.
The mentality to stay healthy should be instilled from a young age.
Some countries, such as Canada, provide a tax credit to parents for registering a child in eligible physical activity programmes, including sports and dance. The policy is aimed especially at low-income families who may not otherwise be able to afford such programmes.
These children typically develop fewer medical complications later in life, thereby reducing the stress on the public health system. Singapore could consider similar schemes.
Ease medical cost burden
Even so, the reality is that senior citizens will inevitably require medication and/or hospitalisation support at some point in time.
Individuals could be encouraged to obtain additional private health insurance plans over and above MediShield and ElderShield protection.
This is because Medisave and MediShield can be easily wiped out, while Eldershield payouts may not be sufficient when an individual is diagnosed with a critical illness requiring surgery or prolonged care.
The Government could encourage individuals to obtain additional private health insurance plans by granting tax deductions for the extra premiums paid.
Concurrently, medical and health insurance services, currently subject to 7 per cent GST, should be zero-rated to make medical and health plans cheaper and to provide an incentive for individuals to invest and provide early for their healthcare.
Zero-rating life insurance policies would also allow life insurers to recover their input tax, the cost savings of which can be passed on to customers in the form of lower premiums.
Similarly, companies offering employee medical benefits should be allowed to claim a tax deduction for their employees’ medical expenses in full, instead of the current cap of up to 2 per cent of the total remuneration of employees.
A spin-off benefit would be a reduction in the disproportionate tax compliance cost of calculating the deductible expenses.
The measures in the enhanced marriage and parenthood package to provide partial funding for assisted reproduction treatment and allow Medisave withdrawals for assisted conception procedures are a step in the right direction.
But this does not address the needs of women who, for various reasons, may desire to have children at a later stage in their life.
One measure that could be considered is to give women the option of freezing and storing their eggs, as some form of protection against the irreversible decline of egg quality that comes with advancing age and increased risk of miscarriage and abnormal births.
This would be useful for women who, for various reasons, decide to defer their plans to have children till such time they are ready to take the plunge.
In this regard, the Government could conduct open fertility clinics to educate women on childbirth options, for example, egg freezing procedures. It could also consider co-funding the costs associated with these fertility treatments or grant tax relief for these costs.
This would encourage a certain segment of our women, who may not otherwise be able to conceive, to have babies at a later stage when they are ready. Ultimately, it is better late than never.