Enhancements to the marriage and parenthood tax measures announced during the Prime Minister's National Day Rally Speech

During his National Day Rally Speech on 17 August 2008, Prime Minister Lee Hsien Loong announced enhancements to the Marriage and Parenthood Package which was introduced to foster a pro-family environment and ultimately, boost the country's flagging birth-rate. The package includes both financial and non-financial measures both of which have been enhanced. Tax benefit enhancements are mainly in the form of increased child-related tax reliefs and rebates. These take effect from Year of Assessment 2009 and are detailed below.

Qualifying Child Relief (QCR) Relief - The amount of relief is increased from $2,000 to $4,000 per child and will be given for all children instead of being restricted to the first four.

Handicapped Child Relief (HCR) - The amount of relief is increased from $3,500 to $5,500 per child.

Working Mother's Child Relief (WMCR) - The is given for all Singaporean children instead of being restricted to the first four. However, as this relief is claimable only by the mother, the cumulative relief is capped at 100% of her earned income. In addition, the amount of relief claimable, calculated as a percentage of the mother's earned income, is increased from 5% to 15% for the first child, from 15% to 20% for the second child, and from 20% to 25% for the third child and each subsequent child.

The maximum claim allowed for QCR or HCR and WMCR is also increased from $25,000 to $50,000 per child.

Parenthood Tax Rebate (PTR) - A new rebate of $5,000 has been introduced for the first child, and rebates of $20,000 each will be claimable for the fifth and subsequent children. This applies to all Singaporean children born or legally adopted on or after 1 January 2008.

For further details, please call your usual PricewaterhouseCoopers contact.