More CDC vouchers, income tax rebates: What you should know about Budget 2024

Amidst a troubled international environment and a subdued global economy, the Deputy Prime Minister and Finance Minister Lawrence Wong announced on Friday (Feb 16) that Budget 2024 is about helping Singaporeans with their cost-of-living concerns.

In his two-hour speech, Wong started off saying that the past year has not been easy, and Singapore's economy grew by a modest 1.1 per cent and avoided a recession.

“I know that many households are feeling the pressure of higher living costs,” he said.

Hence Budget 2024 is "about taking concrete steps to build our shared future together" he added, pointing out that  the government has managed to enhance its assistance measures due to the “unexpected revenue” from Singapore’s strong rebound after Covid-19.

Here are some of the key announcements from Budget 2024.

Helping households with cost of living

Some Singaporeans will get a "cost-of-living special payment" of between $200 and $400.

This is for eligible citizens aged 21 and above in 2024 who are living in Singapore, who do not own more than one property and with an assessable income of up to $100,000.

This is part of the $1.9 billion enhancement to Assurance Package, which was introduced in 2020 to cushion the GST increase.

An additional $600 in Community Development Council (CDC) Vouchers Scheme will also be distributed to households.

The vouchers will be disbursed in two equal tranches of $300, with the first in end-June this year, and the second disbursed in January 2025.

To help Housing Board households cope with increase in their utility bills, Wong announced one-off U-Save rebates of up to $950.

These will be disbursed in April, July, October and January.

Eligible HDB households will also receive a one-off rebate for Service and Conservancy Charges (S&CC), to offset 0.5 months of S&CC in January 2025.

To help Singaporeans cope with smaller medical bills and insurance premium, all adult Singaporeans aged 21 to 50 will get a one-time MediSave Bonus of up to $300.

Support for families

Help for lower-income families will come in the form of ComLink+ Progress Packages - eligible adults will receive quarterly payouts of up to $600 through a combination of cash and CPF if they secure a job and stay employed.

The government will also provide young families with a Parenthood Provisional Housing Scheme (Open Market) Voucher for one year, which will allow them to rent a flat while waiting for their Build-to-Order (BTO) flat to be completed.

The monthly childcare fee caps in Government-supported pre-schools will also be lowered to $640 for anchor operators and $680 for partner operators in 2025.

With the lowering of fees, full-day pre-school expenses for dual-income families will be comparable to the combined costs of primary school fees and after-school student care, DPM Wong said.

Pre-school subsidies will also be extended to all children from lower-income families, Wong said.

CPF changes for older Singaporeans

Wong announced that the government will make several moves to "rationalise the Central Provident Fund (CPF) system.

The government will close the Special Account for those aged 55 and above from 2025. 

This means that all CPF members will have three CPF accounts at any one time, with the Retirement Account (RA) the sole account holding savings intended for retirement payouts. The other two are the Ordinary Account (OA) and MediSave Account (MA).

CPF contribution rates for senior workers aged 55 to 65 will be raised by a further 1.5 percentage points in 2025.

Wong also announced that the Enhanced Retirement Sum will also be raised from 2025 - four times the Basic Retirement Sum.

Majulah Package for 'young seniors'

Wong announced all Singaporeans born 1973 or earlier will get a boost for retirement through the Majulah Package.

To help seniors earning up to $6,000 per month accumulate more retirement savings, an Earn and Save Bonus will be provided to them.

A one-time retirement savings bonus of between $1,000 and $1,500 will also be given to seniors with retirement savings below the Basic Retirement Sum.

Those born in 1973 or earlier will also receive a one-time MediSave bonus of $750, but those with less means will receive the higher tier amount of $1,500.

The Majulah Package will benefit about 1.6 million Singaporeans, at a total lifetime cost of $8.2 billion, Wong said.

Support for workers

Singaporeans aged 40 and above will get a significant top-up of $4,000 in their existing SkillsFuture credit in May.

Wong said that unlike the existing $500 in credits, the additional amount can only be used for "selected training programmes with better employability outcomes".

This includes part-time and full-time diploma, post-diploma, undergraduate programmes, and Progressive Wage Model sector courses.

The government will also provide a monthly allowance for Singaporeans 40 and above who enrol in full-time education courses.

Wong said that it will be equivalent to 50 per cent of the individual's average income over the latest 12-month period, capped at $3,000 per month.

Every individual can receive up to 24 months of training allowance throughout their lifetime, he added.

There will also be support for retrenched workers - in the form of a temporary financial support scheme for those who are involuntarily unemployed while they undergo training or look for jobs that are a better fit.

More details will be announced later this year.

There will also be new measures to ensure income equality and mobility.

"Our income inequality, as measured by the Gini coefficient, has declined to its lowest level over two decades," said DPM Wong. 

"Workfare and Progressive Wages are our key strategies to uplift our lower-wage workers. These strategies are working. I will make several adjustments to ensure they continue to deliver results."

These include increasing the workfare payouts for lower-wage senior workers, and adjusting the wages for lower-wage workers.

To get ITE graduates onto a better career and wage trajectory, Wong also announced a $5,000 top-up to their post-secondary education accounts when they enrol in a diploma programme.

Changes to personal income tax

There will be a personal income tax rebate of 50 per cent for the Assessment Year 2024, which will be capped at $200.

The annual income threshold for dependant-related tax reliefs will also be raised from $4,000 to $8,000. This will take effect from Assessment Year 2025.

This move will cost the government $350 million, Wong said.

All national servicemen to receive cash credits

All national servicemen, past and present, will receive $200 in cash credits to recognise their contribution to Singapore's defence.

The credits will be added to the LifeSG app, and can be spent at over 100,000 online or physical stores that accept payments via PayNow UEN QR or NETS QR.

"I hope this will go some way in expressing our appreciation and gratitude to our national servicemen as well as their families for all that they have done, and will continue to do for our country," Wong said.

ALSO READ: Help with cost of living at top of Budget 2024 wish list for people in Singapore: AsiaOne survey

chingshijie@asiaone.com