Aqiqah.sg’s Guide to Baby Bonus Scheme

by aqiqahsg | Dec 23, 2024 | Articles, Family Finance

Starting a family is a significant life change, making financial preparation essential for welcoming your little one. This is especially beneficial for first-time parents as they navigate the challenges and adjustments of new parenthood.

The Baby Bonus Scheme provides financial assistance to help parents with the costs of raising children and encourages families to have more children. Through this scheme, both parents and child will receive cash gifts through various stages of the child’s growth and development. Over the years the scheme has evolved (and so is the amount) to suit the needs of new parents as a way to cope with the additional costs of raising a new family member.

Hence we designed this checklist for you to keep track of the amount of funds you stand to gain:

Baby Bonus Scheme Explained

The Baby Bonus Scheme was introduced on 1 April 2001 (no joke!). It consists of two main incentives: Baby Bonus Cash Gift and the Child Development Account.

Baby Bonus Cash Gift

This is a financial grant given to parents to help with the immediate costs of raising a child. The amount varies depending on the birth order of the child:

Disbursement:

First and second child: Up to SGD $7,000 in the first 18 months.
Third and subsequent children: Up to SGD $9,000 in the first 18 months.
Subsequently, up to SGD $400 every six months until the child is 6 years and 6 months old.

Funds distribution happens every 6 months:

(The amounts reflected below are based on the enhancement made in 2023 and are relevant for children born from 14 Feb 2023 onwards.)

1st & 2nd Child

3rd & subsequent child

At Birth

$3,000

$4,000

6 Months Old

$1,500

$2,000

1 Year old (12 month)

$1,500

$2,000

18 Month Old

$1,000

2 to 6.5 Years Old

$400 every 6 months

Total Receivable

$11,000

$13,000

Child Development Account

This is a special savings account that parents can open for their children. The government matches the savings deposited by parents, dollar-for-dollar, up to a certain cap. Cash in this account cannot be withdrawn, but can be used to make payment for specific usage:

Childcare and infant care services
Medical expenses at approved institutions
Education costs, including kindergarten and special education needs
Healthcare insurance premiums

Unlike the Baby Bonus Cash Gift, there are no further funding except for the initial top-up by the government. Instead, payouts will be given based on how much parents deposited into the account, where the amount will be matched dollar-for-dollar:

Parents Top-up

Co-Matching Top-up You’ll Receive

Upon opening of CDA account
(No top-up from parents needed)

First Step Grant – $5,000

First Child

$4,000

Second Child

$7,000

Third & Fourth Child

$9,000

Fifth & Subsequent Child

$15,000

Baby Bonus & Aqiqah

Now that you have an idea on how much and when the grants will be dispursed to you, you may be able to better strategise your expenses to accomodate the coming of your newborn. To get your receivables from the scheme, download the Life SG app and make your application by registering your child’s birth.

Considering how aqiqah is such an important aspect of your baby’s spiritual access to Allah (SWT)’s blessings, it is worth looking into how aqiqah can fit into your child’s first 2-3 years financial planning. Remember, it is not necessary for aqiqah to be done during the newborn’s early days. It is understandable that in the early days, many things may take financial priority over aqiqah. There’s always a chance to perform it at anytime before the child reaches his puberty. Hence, plan your finances wisely so you may enjoy your life with your newborn to the fullest, insyaAllah!