Unpacking Singapore’s Budget 2024: What It Means for You

Spread the love
 
HAIR GROWTH OIL ELIXER

DPM Lawrence Wong just dropped Budget 2024 for Singapore. The theme is “Building Our Shared Future Together” and how the Government plans to support citizens and keep them secured in uncertain times. Some highlights include financial support for individuals and households, assistance for those in need, increased possibilities for mid-career workers to upskill, and measures to help elderly age comfortably. Check out the entire overview to receive all of the details from Budget 2024!

Singapore Budget 2024 Updates

Assurance Package

Eligible Singaporeans and residents will be getting $600 CDC vouchers, cash payments for cost of living, U-Save rebates, and S&CC rebates. This extra help is expected to cost $1.9 billion. According to DPM Lawrence Wong, the Assurance Package is set up to provide more support to lower-income families and larger households with seniors and children.

More CDC Vouchers

DPM Lawrence Wong also mentioned that prices will keep going up. For families, Budget 2024 will boost the assurance package with another $600 in CDC vouchers – $300 in June 2024 and $300 in January 2025. And don’t forget about the S$500 vouchers you got for this year, they are valid until the end of 2024.

Cost-of-living Special Payment 

Some Singaporeans will get a cash increase to help them with their everyday expenses. If you are 21 or older in 2024, you are a resident of Singapore, you have only one home, and you earn up to $ 100,000 per year, you can receive a special payout of $ 200 to $ 400.

 Gaming Accessories

U-Save Rebates, S&CC Rebates

Singaporean households are getting some extra cash to help with their utility bills. The U-Save rebates will be given out in April, July, October, and January – it’s like getting 2.5 times the regular GSTV-U Save rebates, which could add up to S$950. This should cover about four months of utility bills for people living in 3-room and 4-room flats. On top of that, HDB residents will also get a one-time rebate on their S&CC charges in January 2025. Overall, eligible households could receive up to four months of rebates in the fiscal year 2024.

S$1.3 billion support for businesses

Businesses will receive S$1.3 billion in help, including a 50% company income tax credit (up to S$40,000). Furthermore, if a company recruits at least one local employee by 2023, they will get at least S$2,000 in cash incentives. They’re also expanding the Enterprise Financing Scheme to provide working capital loans up to S$500,000. And the SkillsFuture Enterprise Credit has been extended until June 30, 2025. This entire package is intended to provide some short-term respite to Singaporean households and businesses, particularly given the current high inflation rate. Just keep in mind that it isn’t a permanent solution.

New tax credit scheme for attracting quality investments

DPM Lawrence Wong just introduced a new tax credit to attract top-notch investments. The Refundable Investment Credit system was designed to promote enterprises to invest heavily in the most important sectors of the economy including new manufacturing units, low-carbon energy production, as well as R&D. In a nutshell, the business can use these credits to pay corporate income tax and they can be refunded within four years if there are any remaining ones. Pretty good value, right?

Top-ups to build on strengths

DPM Lawrence Wong just announced that they’re topping up funds and schemes. It is a $2 billion injection into the Financial Sector Development Fund of Singapore in order to stay competitive in the financial services arena. For the Research, Innovation, and Enterprise 2024 (RIE2025) strategy, they are also adding another $3 billion. And get this: they planned to spend more than $1 billion on AI in the following five years. Also, keep in mind the aspiration to triple broadband speeds up to 10 gigabits per second by 2025. That’s about a tenfold increase in speed compared to any home device we have now.

Helping local firms level up

Lots of Singapore companies are getting a boost by teaming up with local MNCs. The PACT scheme is there to help make these partnerships happen. And soon, it’s going to be even better with more support for things like training, global expansion, and venturing. The goal is to help more companies tap into worldwide markets and be stronger players internationally.

More SkillsFuture credits

Currently, if you are 25 or older and a Singapore citizen, you will get S$500 from the SkillsFuture credit to help you improve your skills and continue your learning. But wait, there’s more: a new SkillsFuture Level-Up Programme is the next in line for mid-career workers. From May 2024 onwards, Singaporeans aged 40 and above will be eligible to get S$4,000 to put towards a specific training programme that will help them with their job prospects. This includes getting diplomas, post-diplomas and courses especially for the industries with a progressive wage model. Moreover, if you are 40 years old and above, you will also enjoy subsidies to enroll for a diploma at polytechnics, ITE, or art institutions from the academic year 2025 onwards. If you take up a full-time course, you will also be entitled to a training allowance of 50% of your income averaged over the previous year or S$3,000 a month, whichever amount is lesser. You can receive this allowance for up to 24 months in your lifetime. So, there’s never been a better moment to improve your talents and advance your career!

Financial support for retrenched workers

As the number of workers who lost their jobs increased greatly, from 6,440 in 2022 to 14,320 in 2023. Due to this, DPM Lawrence Wong announced that the government will draft a plan to assist those who lose their jobs by providing temporary financial support until they complete their training or look for new jobs.

They want to ensure that this strategy is properly implemented so that we do not have the same issues with unemployment benefits as other countries. We’ll learn more about it later this year.

Equality and mobility

In a lot of rich countries, income inequality is causing tensions within society. However, in Singapore, the income difference has narrowed during the last 20 years. To continue decreasing that gap, we’re raising the Workfare Income Supplement program’s ceiling from $2,500 to $3,000. We’re also raising rewards so that older workers earning less can receive up to $4,900 per year instead of $4,200. And we’re raising the minimum monthly wage for local workers to $1,600, with a higher hourly rate of $10.50. The government is currently assisting with salary increases for low-paid workers, and we are increasing our contribution from 30% to 50%, with the maximum wage for this support rising to $3,000 in 2025.

Greater support for ITE graduates

DPM Lawrence Wong just dropped some news about the new ITE Progression Award for ITE graduates. Basically, they will get some extra cash in two parts. First, they’ll get a S$5,000 boost to their post-secondary education accounts when they sign up for a diploma program. Then, when they actually get their diplomas, they’ll get an extra S$10,000 in their CPF OA. This is all to help give younger students a leg up in buying a home or saving for retirement. How awesome is that?

Financial top-ups for lower-income families

Families with young kids who qualify for ComLink+ help will receive extra cash when they team up with MSF family coaches and start making moves towards their goals, like finding a job. So, if they land a job, they can get up to S$600 every three months through cash and CPF top-ups.

Lower pre-school expenses

Parents with little ones, good news! Kids attending government-supported pre-schools will have a lower max monthly childcare fee in 2025. The most you’ll pay is S$640 for anchor operators and S$680 for partner operators, before subsidies kick in. And in 2026, these fees are expected to drop even more, but we’ll have to wait for more info on that. Plus, working moms aren’t the only ones getting help – stay-at-home moms (aka housewives) will also be eligible for the same subsidies. DPM Lawrence Wong says this change will benefit around 17,000 kids.

Ability to rent a home while waiting for BTO flats

If you and your partner have applied for a BTO flat and are eagerly waiting for it to be ready, you can rent a flat from HDB at a lower cost through the Parenthood Provisional Housing Scheme (PPHS).

For families who rent an HDB flat in the regular market, the government is offering a one-year PPHS (Open Market) Voucher to provide some financial assistance. Last year, it was announced that they plan to increase the number of flats available for the scheme to 4,000 over the next two years.

There’s also good news for those with special needs. DPM Lawrence Wong shared that the maximum monthly fees at special education schools will be reduced from S$150 to S$90. They are also lowering fee caps at all special student care centers.

Additionally, there will be more support for adults with disabilities to enhance their employability. The government is expanding spaces in sheltered workshops and day activity centers for skills training.

To better assist people with disabilities and their caregivers, more service hubs will be launched, creating a more supportive environment.

Changes to the CPF system

CPF contribution rates are increasing by 1.5 percentage points for those aged 55 to 65. Starting in 2025, you’ll be able to put more money into your CPF RA and receive larger rewards. Employers will also benefit, as the government has extended the CPF Transition Offset for another year, covering half of the increase in their payments for 2025.

ERS and BRS – Starting in 2025, the Enhanced Retirement Sum (ERS) will be increased. This is the most you can save in your CPF Retirement Account. Right now, the ERS is three times the Basic Retirement Sum (BRS). So in 2024, the BRS is S$102,900 and the ERS is S$308,700. But come 2025, the ERS will be increased to four times the BRS – a total of S$426,000. This is meant to help more folks aged 55 and up to put all their CPF savings towards getting bigger CPF payouts later on.

Closing special accounts – So basically, right now you’ve got your Ordinary Account (OA), Special Account (SA), and Retirement Account (RA) in your CPF. But starting in 2025, if you’re 55 or older, they’re shutting down the SA. Your SA savings will get moved to the RA up to the Full Retirement Sum to keep earning interest. Any leftover SA savings will go into your OA, but you can choose to transfer your OA savings to the RA whenever you want, up to the Enhanced Retirement Sum, for better interest rates and bigger retirement payouts.

Majulah Package for seniors and “young seniors”

Do you remember the National Day Rally 2023? They discussed the Majulah Package for Singaporeans born between 1960 and 1973. This package primarily benefits adults in their 50s and 60s by providing additional retirement assistance.

Earn and save bonus – Seniors earning up to S$6,000 per month can receive a bonus of up to S$1,000 each year to help them save more money.

Retirement Savings Bonus – This is a special bonus of S$1,000 to S$1,500 for seniors with retirement savings below the BRS.

MediSave Bonus – This is a special bonus worth S$750 to S$1,500, depending on when you were born, the value of your home, and whether you own more than one property by the end of the year. So, for example, “young seniors” with less money may be eligible for the larger sum of S$1,500.

Overall, the Majulah Package is gonna help out 1.6 million Singaporeans and it’s gonna cost a total of S$8.2 billion. They will also invest S$7.5 billion in a new fund dubbed the Majulah Package Fund, which will not pose a concern for future generations. This will assist seniors who live in a property worth little more than S$25,000 per year and own only one property.

MediSave Bonus for all adult Singaporeans

If you are under 50 but above 21, you will be entitled to an additional MediSave bonus of up to $300. Moreover, the government is increasing the income ceilings for healthcare subsidies like CHAS and MediShield Life premium rebates. This means over 1 million Singaporeans and PRs will get more help with their healthcare costs, and about 1.4 million Singaporeans will get that MediSave Bonus. Sweet deal, right?

Age Well SG

As Singapore’s population ages, the care of our seniors has become a primary focus for our healthcare system. DPM Lawrence Wong recently announced that S$3.5 billion will be spent on Age Well SG, a program that helps seniors stay active and healthy. This means more Active Ageing Centres with lots of activities, more assisted living options like Community Care Apartments, and improvements in our neighborhoods like senior-friendly amenities, sheltered linkways, and bus stops with features for seniors.

More LifeSG credits for NSmen

All current and former national servicemen will get S$200 in LifeSG credits. You’ll get it in November and they’ll be good for a year. You can use them at loads of online or physical stores that take PayNow UEN QR or NETS QR. Just hop on the LifeSG app to access your credits.

Charity, Arts, and Sports

Charity – The earthquakes and war in Turkey, Syria, and Israel have created a situation where many Singaporeans are donating their time and effort to aid the affected people. This is why the government is introducing a new Overseas Humanitarian Assistance Tax Deduction Scheme to encourage people to donate to these non-governmental organizations. In essence, if you make a donation to a charity that is helping to provide emergency relief overseas then the money will be fully deducted from your tax.

Arts – Singapore will be investing over S$100 million towards supporting the Our SG Arts Plan in the next four years.

Sports – DPM Lawrence Wong said they will keep backing the Sports Facilities Master Plan, which means revamped sports centers in Toa Payoh, Punggol, and Clementi. The government is also throwing in an extra S$20 million for the One Team Singapore Fund, and they’re extending it until the end of FY 2027. This fund matches donations for Team Singapore athletes, and now it includes emerging sports like pickleball, tchoukball, and powerlifting.

Personal income tax rebates

To help with the high cost of living, the government is giving a 50% tax rebate for the 2024 tax year, up to S$200. It will cost the government S$350 million. Also, if your dependents make S$4,000 or less a year, you can claim tax reliefs. Starting in 2025, that threshold will be raised to S$8,000.

Property tax changes

Since Budget 2022, they announced a two-step increase in property tax rates for homes. DPM Lawrence Wong said it was a wealth tax aimed at investment properties and higher-end owner-occupied homes. Rents went up a lot, causing annual property values to rise sharply as well. They initially thought the property tax changes would only affect the top 7% of owner-occupied homes, but now it’s closer to 13% due to the big increases. To make sure people in pricier homes are still paying their fair share, they’re raising the property tax rates for all high-value properties. But don’t worry, if you’re a retiree living in a fancy home and struggling to pay your property tax bill, IRAS will give you a 24-month interest-free payment plan.

Changes to Additional Buyer’s Stamp Duty

Right now, if you’re a married couple with property and you’re buying a new place, you can get back some of the ABSD you paid on your old property. Good news for single folks over 55 who want to downsize – you’ll also be eligible for this refund if you sell your current place within six months of buying a cheaper one. Last year, the government upped the ABSD rates to cool down the property market. If you’re a Singaporean buying a second property, you’ll pay 20% ABSD, and 30% for any more after that. Housing developers will also get a little leeway – if they sell most of their units on time, they won’t have to pay back as much ABSD.

Corporate income tax

Going forward, they’re gonna start rolling out pillar 2 of this BEPS 2.0 thing, which is basically a plan by the OECD to make big companies pay at least 15% in taxes. Right now, the corporate tax rate in Singapore is 17%, but some investors manage to pay as little as 4%. Pillar 2 is supposed to bring in more money and maybe even make some companies move their operations to other places to avoid the new tax rules.

FY2023 and FY2024 fiscal positions

In FY2023, the government made more money than expected thanks to increased corporate income tax collections. This allowed them to fund new spending, like adding S$7.5 billion to the Majulah Package fund. However, they also ended up spending more because of the extra revenue. So, they predict that FY2023 will close with a deficit of S$3.6 billion, or 0.5% of GDP. In FY2024, they’re planning for a small surplus of S$0.8 billion – around 0.1% of GDP – to provide specific support to households and businesses.

Recap of Budget 2023

Budget 2023 was announced on February 14, 2023 with the theme of “Moving Forward In A New Era”. DPM Wong called it his Valentine’s Day gift to help Singaporeans deal with the rising cost of living. Some of the main highlights include increased GST payouts and Assurance Package to help with the GST hike. Singaporeans also got an extra S$800 million in September 2023, with eligible people receiving between S$200 to S$800 from the Assurance Package. There’s also an increase in CDC voucher amount, with all households getting S$300 worth of vouchers in Jan 2024. Other perks include higher U-Save rebates, additional BTO ballot for first-time applicants, and up to S$30,000 more in CPF Housing Grants for resale HDB buyers. Plus, there’s an extra S$3,000 Baby Bonus Cash Gift, double-paid paternity leave, and higher CPF monthly payouts for seniors under the Retirement Sum Scheme. The CPF monthly salary ceiling will also go up from S$6,000 to S$8,000 over four years from 2023 to 2026. So yeah, lots of good stuff in the budget to help out Singaporeans!

Fitness category - Get Fit for summer