Budget 2015 : What's in it for You and Me?

The widely anticipated Jubilee Budget was finally out yesterday and will be subjected to parliamentary debate in early March 2015. So, what is the main thrust of the budget and what's in it for you and me?

This budget is one that is focused on preparing the nation for a challenging future while addressing the needs of the middle class and the poor. The "sandwiched class" of middle-income Singaporeans who have young children and have to support elderly parents stand to benefit the most from this budget as they are the main ones feeling the pinch from the rising costs of living. The continued efforts focusing on helping the poor and needy signifies a society that has matured.

BUDGET 2015 AT A GLANCE

Supporting the Middle Class
- 50% personal income tax rebate, capped at S$1,000 for Year of Assessment (YA) 2015
- Lower maid levy for more families with young children below age 16, up from age 12 and elderly parents, halved to $60 a month from 1 May; this translates to $720 savings a year
- Help with childcare and education costs with top-ups to the Child Development Accounts (up to S$600), Edusave Accounts (S$150) and Post-Secondary Education Accounts (up to S$500) of Singaporean children and
- Waiver of exam fees for Singaporeans sitting for national exams in Government-funded schools will be waived from 2015 and covers fees for PSLE, GCE N, O and A levels (savings of up to S$900). Exam fees for full-time ITE and polytechnic students will also be waived.

Strengthening Safety Nets
- Quarterly Silver Support cash payouts of S$300 to S$750 each for the low-income elderly for life
- One-off seniors' bonus of up to S$600 a year
- More cash for lower-income households

Boosting Retirement Savings
- CPF salary ceiling to be raised from S$5,000 to S$6,000
- Higher CPF contribution rates for workers aged 50 to 65
- 1% extra interest on first S$30,000 of CPF balances from age 55 next year, on top of the existing 1% extra interest on the first S$60,000 of savings. This means that the first S$30,000 in Special, Retirement or Medisave accounts can earn up to 6% interest risk-free
- Higher annual contribution cap for Supplementary Retirement Scheme

Encouraging Companies to Grow & Restructure
- More grants for companies to innovate and expand overseas
- Wage Credit Scheme (WCS) extended by 2 years, but at the half the current rate
- Corporate Income Tax Rebate of 30%, up to a cap of S$20,000 on their taxes payable, extended by 2 years
- Temporary Employment Credit extended by 2 years, increased to 1% of wages in 2015
- Planned hike in foreign worker levy to be deferred

Building Skills
- $500 SkillsFuture Credit for Singaporeans aged 25 and above to spend on further education and training from 2016; will be topped up regularly and will not expire. They can either choose to go for a short course with the S$500 or accumulate more credits for more substantial training in the future
- More study awards, course subisidies, internships and on-the-job training

More Progressive Taxes /  Tax Deductions
- Higher taxes for top 5% of income-earners from 2017, with those with chargeable income of more than S$320,000 paying 22% tax, up from 20%
- Tax deductions for donations made this year will rise from 250% to 300% to encourage
- Higher petrol duties; raised by 15 to 20 cents per litre; 1 year road tax rebate of 20% for cars, 60% for motorcycles and 100% for commercial vehicles using petrol to partially offset increase

Infrastructure
- Development expenditures to grow to S$30 billion by 2020, from S$12 billion in 2010
- Changi Airport's new Terminal 5 to be almost as large as Terminals 1 to 3 combined
- Increasing hospital beds and nursing home capacity

How will the budget benefit you and your family? Do you feel that the government should do more in certain areas? Which are these areas? Let us know.

Retirement Planning by William Sharpe

For the hardcore technicals among us, I would like to share William Sharpe's blog with you. Even though more relevant in the US context, it is still very interesting to look at retirement income calculations and draw parallels to the Singapore context, especially since retirement planning and CPF Life are such hot topics in Singapore right now.

William Sharpe is an American Economist. He is the STANCO 25 Professor of Finance, Emeritus at Stanford University, recipient of the 1990 Nobel Prize in Economic Sciences and a co-founder of Financial Engines, Inc. Those who did Finance in school will be familiar with him.

Sharpe was one of the originators of the capital asset pricing model (CAPM), created the Sharpe ratio for risk-adjusted investment performance analysis, contributed to the development of the binomial method for the valuation of options, the gradient method for asset allocation optimization, and returns-based style analysis for evaluating the style and performance of investment funds.

Please refer to his blog, Retirement Income Scenarios here.

CPF Life - More Flexibility, More Options

On 2nd Feb 2015, a government-appointed panel set up last September to study ways to enhance the Central Provident Fund (CPF) system put forward some recommendations to the government which have been accepted. The panel held discussions with more than 400 Singaporeans to gather feedback to arrive at the proposals.

Some of these recommendations include different retirement sums for different needs, an option to withdraw up to 20% of savings in a lump sum and a choice to defer withdrawal in exchange for higher monthly payouts.

The panel sought to ensure that the CPF provides a basic level of lifelong support in retirement while offering additional flexibility to cater to different needs.

The panel said there should be clearer choices over lifelong payouts and the Minimum Sums to be set aside for retirement.

What it is now

Currently, CPF members must meet a Standard Minimum Sum by the time they turn 55. The Minimum Sum increases to $161,000 in July, is locked away until the CPF member turns 65. That is when they will start getting a payout every month.

Members can withdraw up to $5,000 from their CPF accounts from age 55. Anything above half the CPF Minimum Sum and Medisave Minimum Sum can be withdrawn from age 55 with a property pledge.

The New Choices You Have

Under the recommendations set out by the panel, CPF members retiring in 10 years' time should set aside enough CPF savings to provide for a basic monthly payout of about $650 to $700. This amount assumes that the retiree owns a home and does not need to pay rent.

To receive this payout, CPF members turning 55 next year will need to set aside a Basic Retirement Sum of $80,500 as premiums in 2016.

CPF members can withdraw their savings above the Basic Retirement Sum, subject to a CPF charge or pledge on the value of their property. This means that if the member sells his property, the amount of the charge or pledge will be returned to his CPF account to supplement his basic payout.

Members who do not own their homes should set aside twice the Basic Retirement Sum, or $161,000, the panel said.

Those with more than the Basic Retirement Sum and who want higher lifelong payouts be allowed to top up their CPF Life premiums, up to the Enhanced Retirement Sum. 

They should also be given an option to defer receiving their payouts in exchange for a higher amount every month. For every year that the payout start age is deferred, monthly payouts will increase by 6% to 7%.

For those with shorter-term cash needs, the panel said they should be allowed to withdraw up to 20% of their savings in their retirement account at age 64. This goes up to 65 in 2018.

To help those with low savings in their CPF retirement account, the panel said CPF contribution rates for workers aged 50 to 55 should be raised to match those for younger workers.

Below is the Summary of the decisions you have to make based on the new recommendations:

What choices will I need to make at 55?
1. How much you want to receive as payouts in the future and how much money to set aside in your Retirement Account.
2. Whether to withdraw $5,000.
3. If you have savings beyond the Basic Retirement Sum or Full Retirement Sum, whether to withdraw them.
4. Whether to use any savings beyond the Basic Retirement Sum to top up accounts of loved ones.

What choices will I need to make at 65 or the payout eligibility age?
1. Whether to make a lump sum withdrawal of up to 20%.
2. When you want your monthly payouts to start.
3. Which CPF Life Plan to join (before payouts start)
 

A second batch of recommendations will be unveiled later this year.

What do you think of the initial recommendations put forward by the panel? What are your concerns and considerations?

Cord Blood Banking - Should You Spend the Money?

Storage of baby's umbilical cord blood in a private cord blood bank for family's own personal use in the future is a choice made by both parents and is typically very costly. Currently, it costs S$6,000 on average for storage up to age 21 of the baby. Some private banks also offer banking of the cord lining. If parents want to take both up as a form of "insurance" for the child or a sibling, you are looking at expenses of around S$12,000. Due to the costs involved, private cord blood banking is not financially feasible for many families.

In Singapore, we have 3 private banks, namely:
1. Cordlife - processed and stored over 45,000 cord blood units as of 21 Mar 2014 and 13 cases of successful release of cord blood units (over 250 including itsw associates)
2. Stemcord - processed and stored more than 35,000 cord blood units and 12 cases of successful release of cord blood units
3. Cryoviva - newly established in 2013.

Public banks accept donations to be used for anyone in need. The percentage of public bank donations discarded as medical waste is estimated to be between 60 to 80%. The registries impose very stringent criteria such as taking blood volume and cell count into account before storage, and only samples that meets international public cord blood banking guidelines can be stored.

In Singapore, we have the Singapore Cord Blood Bank (SCCB). Since inception in 2005, the SCCB has facilitated 162 transplants, both locally and internationally. As of 31 July 2013, it has a cord blood inventory of over 9,000 cord blood units available for Haematopoietic Stem Cell Transplants (HSCT).

Research has shown that there is an extremely low probability that the donor should ever need or benefit from his/her own cord blood unit as it may already carry the genetic abnormality that led to the blood disorder or immune system failure. In fact, the American Academy of Pediatrics strongly supports public over private cord blood banking because there is "no data to support the benefits of private cord blood banking at the current time".

Hence, choosing to bank your child's cord blood is an insurance against two highly improbable scenarios of either another family member needs the cord blood or the probability of new uses for cord blood in regenerative medicine or cell therapy.

Besides the research that I did online, I also consulted my obstetrician and a haematologist friend of my significant other who gave the same answer. "Donate it to a public cord blood bank." Hence, the decision was made and the money saved will go into baby's education fund instead.

Which one will you choose?

Preparing for the Arrival of Baby in 2015

I have not been writing my blogposts frequently due to the need to do research on baby stuff. Being a first-time mum, I have been reading up ferociously on things that I need to prepare for the arrival of our little one. Besides asking experienced mums for their useful tips, I have also read reviews on the online forums and resources on what to expect and prepare. 

 

There are numerous baby items to be purchased as a first-time parent and as I hope to get the best bang for my buck, I have done a lot of research online to get the best deal in terms of quality and price. Besides going down to the physical shops, I have also done my homework on the web at the many online stores operating locally to compare prices and look at the selections. I don't expect to have the luxury of doing shopping very often once the baby arrives and these online stores will provide the convenience that the modern mum needs by delivering the goods right to your doorstep and often free delivery is provided with a minimum purchase of $60 to $100. Amazon.com USA now provides free delivery to Singapore on many items with a minimum purchase of US$125. I also like to refer to the reviews left by those who have made purchases previously to see if they found the product useful or not. If you want to go to the trouble of using shipping consolidators, you can also have the choice of shopping on other US shopping sites in the comfort of your home. Baby fairs held from time to time at the Singapore Expo, Suntec City and Takashimaya also provide attractive discounts and promotions on baby products, if you have time to make your way there.

I have affirmed that it is indeed not cheap to have kids in Singapore, even when the Singapore government is trying to help to defray some of these costs by giving out baby bonuses, subsidies, allowing the usage of our CPF funds to pay for visits to the obstetrician and delivery, subject to certain caps, amongst others. No wonder Singaporeans are having children later and later in life and having fewer of them. Having said that, it is still a personal choice whether you want to keep things simple or want to splurge on the best for your child.

It can cost between $5,000 to $25,000 onwards to prepare for the arrival of your baby. Most people spend from $10,000 to $12,000 on average. Aspiring parents have to start tightening your belts in order to provide for your child.

Delivery
Normal (vaginal) delivery can range from $1,000 to $12,000 depending on whether you choose  Government subsidized hospitals or Private hospitals and the type of ward you stay in. Please refer to MOH website for more details.

 

Delivery via Caesarean section can range from $2,000 to $18,000. Please refer to MOH website for more details.

If you wish to make claims from CPF for your delivery, do note that there are certain caps to be adhered to:
Maximum Medisave Claimable (subject to CPF Board approval)
Antenatal $450
Normal Delivery $750
Caesarean Delivery $2,150
Hospital Stay $450 per day
Neonatal screening tests and vaccinations $400 per account per year
Please refer to the CPF website for more details.

Confinement Nanny or DIY Confinement

Whether you choose to observe the confinement month or not also determines how much you will be spending in the month after child birth. A 28-days confinement nanny can cost somewhere from $2,500 to $4,000 during the Chinese New Year period, not forgetting the obligatory ang pows that you have to dish out before they start work and after they complete the stint which will add another $100 to the cost. This is not including the herbs that you have to purchase so that the nanny can prepare nutritious tonic food to help you in your recuperation. This will add another $100 to $300 on top of the costs.

If you prefer to do-it-yourself or get your mum or mother-in-law to help you during the confinement period, you have the choice to cater confinement food from experienced establishments which will cost anywhere from $400 to $900 depending on how many meals you cater per day.

Baby Essentials

Well, baby essentials like clothing, bath/baby care products, diapers / reusable nappies, nursing and feeding items, nursery items like cots, playards and toys will come to mind. There is a wide array for us to choose from to suit our needs. We may also prefer certain brands to others and these may cost more.
 

Post Natal Massage
Some mothers consider this a luxury but for others, it is a necessity, so as to get back in shape quickly after delivery. After 10 months of pregnancy, this will be an affordable luxury for new mummies to relax and pamper themselves. Depending on the type of packages and the masseurs you choose, whether freelance or from massage centres, you can expect to pay at least $300 to $800 for this.

Others
There are also many optional items like cord blood banking, baby's full month celebration and cakes, newborn photography, geomancer consultation to determine the Chinese name of the baby (if you are Chinese and require such services), just to name a few. Expect to spend another $8,000 to $10,000 or so if you want them all.

Conclusion
What will you choose for your baby and yourself? Most of us have budgetary constraints, so we will have to weigh the pros and cons, in order to make the final decisions. We must not forget that, at the end of the day, it is our love for them that matters most rather than any material wants which are definitely secondary.

How to Achieve Personal Income Tax Savings

As we are approaching year end, you may want to do some income tax planning, so that you can save some taxes come next year's filing season.

You may claim expenses, donations and tax reliefs as deductions to reduce your tax liabilities for the Year of Assessment ("YA") 2015. In Singapore, your total income less deductions will be subject to tax at progressive rates ranging from 0% to 20%.

Employment Expenses

If you are an employee, employment expenses incurred in earning your employment income, for example, travelling expenses incurred on public transport, entertainment expenses incurred in entertaining clients, subscriptions paid to professional bodies or society in year 2014.

Donations
To encourage greater charitable giving in Singapore as the economy recovered, the Minister for Finance announced in Budget 2011 that  tax deduction of 2.5 times will be extended for another 5 years to donations made from 1 January 2011 to 31 December 2015. Donations to name Institutions of a Public Character (IPC), IPC facilities, events or programmes are eligible. However if the donations or gifts are for a "foreign charitable purpose", they are not tax deductible even though they are made to an approved Institution of a Public Character (IPC). For example, donations made to some overseas relief funds managed by an approved IPC are not tax deductible.
 

Course fees relief

You can claim actual course fees incurred up to a maximum of $5,500 in year 2014 and should only include registration or enrolment fees, examination fees, tuition fees and aptitude test fees (for computer courses). The course or seminar / conference should be related to your current employment, trade, business, profession or vocation. If you started a new employment, trade, business, profession or vocation related to any course, seminar / conference that you have completed in the prior 2 years, you are able to claim this relief as well.

CPF cash top-up relief

The relief is automatically given to you if your employer has made cash top-ups to your own Special Accounts or Retirement Accounts in year 2014. Additional relief will be automatically given to you for cash top-ups made by you to your family member's (Parents or Parents-in-law, Grandparents or Grandparents-in-law, Spouse, Siblings) Special Account or Retirement Account. To qualify for the tax relief, your spouse and siblings must not have an annual income exceeding $4,000 in the year preceding the year of top-up.

CPF relief : For employees only

You may claim relief on compulsory employee CPF contributions (not exceeding the Ordinary Wage Ceiling and Additional Wage Ceiling) and voluntary contributions to your Medisave Account in the year 2014.
 

Earned income relief

IRAS will automatically grant this relief when processing your tax return. You do not need to claim this.

Handicapped brother / sister relief

You can claim this relief if you have supported your physically or mentally handicapped siblings or siblings-in-law who lived in Singapore. To qualify for the relief, your sibling or sibling-in-law must have lived with you in the same household or you must have incurred $2,000 or more in supporting him in the year 2014. You cannot claim this relief if someone else has claimed other reliefs on the same sibling. For YA 2014 and before, $3,500 for each handicapped sibling or sibling-in-law. From YA 2015 onwards, this will be increased to $5,500. 

Life insurance relief

Life insurance relief is given on annual insurance premiums paid in year 2014 on the life assurance policies bought on your life or the life of your wife. You may claim if your total compulsory employee CPF contribution or self-employed Medisave/Voluntary CPF contribution or both is less than $5,000. If you are a married female, you can only claim on your own life assurance policies. You can claim the lower of the difference between $5,000 and your CPF contribution or up to 7% of the insured value of your own/your wife's life or the amount of insurance premiums paid, whichever is lower.

NSman (self/parent) relief

NSman self relief 

$3,000 for those who performed NS activities in the year 2014 or $1,500 for those who did not. If you and your son are both NSmen, you will eligible for either the NSman self relief or the NSman parent relief, whichever is higher.

NSman wife relief - $750

NSman parent relief - $750 is the maximum relief regardless of the number of children who are NSmen.

Parent / Handicapped Parent Relief (for maintenance of parents, grandparents & great-grandparents including in-laws)

The dependent must be living in Singapore in the year 2014, either in your household or if in a separate household, you must incur $2,000 or more supporting him/her. The dependent is 55 years of age or above in the year 2014 and does not have an annual income exceeding $4,000 in the year 2014. If not, he/she must be physically or mentally disabled.

If you have claimed Parent Relief on both your parents, you will not be able to claim the relief on your parents-in-law. You can still claim the full amount of this relief even if the dependent passed away in the year 2014.

If you are a working mother who is married, divorced or widowed, you can claim Parent / Handicapped Parent Relief and Grandparent Caregiver Relief on the same dependent, provided that you meet the qualifying conditions.

From YA 2015, if you have supported the same parent or handicapped parent with other people, all of you can share this relief based on an agreed apportionment. If at least one of you stays with the dependent, the amount of the parent relief to be shared is $9,000 or $14,000 respectively. The claimants must agree on the basis of apportionment. Otherwise, the Comptroller of Income Tax would apportion the relief equally among all claimants.

Type of relief                  Staying with               Not staying with

                                           dependent                    dependent

Parent relief                       $9,000 per                      $5,500 per

                                           dependent                      dependent

Handicapped parent          $14,000 per                    $10,000 per

relief                                   dependent                      dependent

 

Supplementary Retirement Scheme (SRS)

You are entitled to SRS tax relief in the Year of Assessment following the year of contribution provided you are a tax resident. The maximum SRS contribution for a Singaporean/Singapore permanent resident and foreigner are $12,750 and $29,750 respectively. This will be allowed automatically based on information provided by the SRS operator.

SRS is a voluntary scheme to encourage individuals to save for retirement, over and above their CPF savings. The SRS offers attractive tax benefits. Contributions to SRS are eligible for tax relief. Investment returns will also be tax-free before withdrawal and only 50% of the withdrawals from SRS are taxable at retirement.

You can open an SRS account at the participating branches of any of the three SRS operators:

1. DBS Group Holdings Ltd

2. Overseas-Chinese Banking Corporation (OCBC) Ltd

3. United Overseas Bank (UOB) Ltd

So, to claim for tax relief next year, do make the contributions before the end of this year to qualify. The banks are offering perks to encourage tax payers to open SRS accounts with them by offering cash and vouchers. You can find the latest SRS promotions here.

Additional Reliefs/Rebates available to married/divorced/widowed taxpayers

For both Male and Female Taxpayers

Qualifying / handicapped child relief (QCR/HCR)

You can claim relief if you are maintaining an unmarried child who is a legitimate child/step-child/legally adopted child who is below 16 years old or studying full-time at any university, college or other educational institution and does not earn an annual income exceeding $4,000 in the year 2014. Scholarships, bursaries and similar allowances are not considered your child's income OR is mentally or physically handicapped.

From YA 2010 to YA 2014		From YA 2015
QCR	HCR	QCR	HCR
$4,000 per child	$5,500 per child	$4,000 per child	$7,500 per child
QCR/HCR + WMCR is capped at $50,000 per child#		QCR/HCR + WMCR is capped at $50,000 per child#

^#QCR / HCR, regardless of whether it is claimed by the father or mother, will be allowed first.  WMCR will be limited to the remaining balance.   
 

Spouse/handicapped spouse relief

You may claim this relief if your spouse was living with you or supported by you AND does not have an annual income exceeding $4,000 in the year 2014 OR is mentally or physically handicapped. If you are legally separated from your spouse and are making maintenance payments under a Court Order or Deed of Separation, you may also claim this relief.

Parenthood tax rebate

You may claim Parenthood Tax Rebate if you are a married, divorced or widowed Singapore tax resident in the relevant year* and the qualifying child is a legitimate child, illegitimate child or an adopted child.

* This refers to the year of birth (for a legitimate child), year of marriage (for an illegitimate child) or year of adoption (for an adopted child) where applicable.

You may claim the relief in Year of Assessment immediately following the relevant year defined above. Any unutilised amount will be automatically carried forward and used to offset your income tax payable. Hence, it is not necessary to submit a fresh claim for subsequent years.

From YA 2009 onwards, the following parenthood tax rebate may be claimed for each qualifying child.

Child order                       PTR                                          PTR

                               (YA2008 and before)             (From YA 2009 onwards)

1st                                       $0                                             $5,000

2nd                                 $10,000                                       $10,000

3rd                                  $20,000                                       $20,000

4th                                  $20,000                                       $20,000

5th and beyond                   $0                                     $20,000 per child

This relief may be shared with your spouse based on the basis of apportionment agreed by both of you.

For Female Taxpayers only

Foreign maid levy relief

You can claim this relief if you or your spouse have employed a foreign domestic worker and you are married and lived with your husband or married and your husband is not a tax resident in Singapore or separated from your husband, divorced or widowed and had children who lived with you and on whom you could claim child reliefs.

You can claim twice the total foreign domestic worker levy paid in the previous year, on one foreign domestic worker This is regardless of whether you or your husband has paid the levy.

Grandparent caregiver relief

You can claim this relief if you are a working mother who is married, divorced or widowed. Your parent, grandparent, parent-in-law or grandparent-in-law (including that of ex-spouse) is living in Singapore in the year 2014; looking after any of your children who is a citizen of Singapore and is 12 years old or younger in the year; and not working or carrying on any trade, business, profession, vocation in the year. No one else has claimed GCR on the same caregiver. The caregiver may be the subject of relief claims, other than GCR (e.g. Parent Relief, Spouse Relief).
 

Working mother's child relief

You can claim WMCR in the Year of Assessment 2015 if you meet all the following conditions in the year 2014. You are a working mother who is married, divorced or widowed and have earned income. (Earned income = Taxable earned income from employment, pension, trade, business, profession or vocation less allowable expenses) You have a child who is Singapore citizen as at 31 Dec 2013* and have satisfied all conditions under Qualifying Child Relief (QCR) or Handicapped Child Relief (HCR). You can claim WMCR on the same child even if you and / or your husband / ex-husband has already claimed Qualifying Child Relief (QCR) or Handicapped Child Relief (HCR).

After you have made a claim in your tax return, IRAS will automatically compute the amount of WMCR that you can claim, based on your eligibility, when IRAS process your tax return. The amount of WMCR that you can claim for each child is based on the child order and the corresponding percentage of your earned income.

Child order	WMCR Amount
1st	15% of mother's earned income
2nd	20% of mother's earned income
3rd	25% of mother's earned income
4th	25% of mother's earned income
5th and beyond	25% of mother's earned income
Maximum claim allowable*	QCR/ HCR + WMCR is capped at $50,000 per child Cumulative WMCR percentages are capped at 100% of mother's earned income

* QCR/ HCR, regardless of whether it is claimed by the father or mother, will be allowed first and WMCR will be limited to the remaining balance.

Please refer to IRAS website for more details and here for the tax calculator which is very helpful as it provides pointers at each relevant input cell for you to compute your tax payable.

Final Step
Once you use the tax calculator to estimate your chargeable income and tax payable, you can then try to see if it is possible for you to achieve more tax savings by moving down to the next lower tier of chargeable income by, say contributing to your SRS account / making more donations to your favourite charity or simply by allowing the higher income earners in the family to claim for parent relief, for example.

As an illustrative example, we can look at YA 2014 tiered tax rates. If you are a tax resident in Singapore, the rates of tax chargeable are as follows:

 

	Chargeable Income	Rate	Gross Tax Payable
	$	(%)	$
On the first	20,000	0	0
On the next	10,000	2.0	200
On the first	30,000		200
On the next	10,000	3.5	350
On the first	40,000		550
On the next	40,000	7.0	2,800
On the first	80,000		3,350
On the next	40,000	11.5	4,600
On the first	120,000		7,950
On the next	40,000	15	6,000
On the first	160,000		13,950
On the next	40,000	17	6,800
On the first	200,000		20,750
On the next	120,000	18	21,600
On the first	320,000		42,350
Above	320,000	20

 

For a tax resident with chargeable income of $95,000 (assuming no parenthood tax rebate), is able to reduce his chargeable income to $80,000 by contributing $12,750 (max for Singapore tax residents) and donating $900 to approved charities and at the same time, achieve tax savings of $1,725 (11.5%*$15,000).

 

Of course, you can try out different possibilities unique to your personal circumstances. Please do let us know if you have anything to contribute regarding this topic. Hope you find this post useful!





Government Co-funding for Assisted Reproduction

The Singapore Government has tried ways and means to increase Singapore's Total Fertility Rate by trying to defray the costs of having a baby from giving out Baby Bonuses to Tax Reliefs and Rebate for parents.

Couples seeking help to conceive can apply for government co-funding under the Enhanced Co-funding for Assisted Reproduction Technology (ART) at Restructured Hospitals Scheme. 

The scheme provides co-funding for up to 75% of the cost of their ART treatment for a maximum of 3 fresh and 3 frozen ART cycles taken at public hospitals. This covers costly ART treatments procedures such as in-vitro fertilisation (IVF) with or without intracytoplasmic sperm injection (ICIS) and gamete intra-fallopian transfer (GIFT). The scheme does not cover Assisted Conception Procedures (ACP) such as intra-uterine insemination (IUI). IUI treatments are relatively less costly, often less than $1,000 per treatment whereas an IVF Fresh Cycle treatment can range from $10,000 to $14,000 depending on the amount of stimulation medication required.

You can use up to $6,000 of your Medisave to defray both ACP expenses and ART bills (after co-funding).

Tip

Couples with children can also benefit from this scheme.

What are Fresh and Frozen ART Cycles?

Fresh ART Cycle	Frozen ART Cycle
Woman receives ovarian stimulation  Eggs are retrieved from ovaries and fertilised in lab to form embryos  Embryos are transferred to the uterus shortly  Note: You can freeze excess embryos for later use	Frozen embryos (excess embryos from a previous fresh ART cycle) are retrieved from storage  Frozen embryos are thawed and transferred to the uterus at an appropriate time

What does the Co-fund ART Scheme Cover?

Covered	Not Covered
Ovarian stimulation  Egg retrieval  Assisted fertilisation  Embryo transfer Freezing of embryos  Storage of frozen embryos for up to 10 years  Thawing of frozen embryos  Other standard ART procedures for both men and women  Note: You can freeze excess embryos for later use	Initial medical consultations and investigations (for treatment suitability)  Consumed ART treatments if you abort the cycle after ovarian stimulation unless the early termination is due to medical reasons as advised by the doctor

How much co-funding can I receive?

The scheme provides co-funding for each couple for a maximum of 3 fresh and 3 frozen ART cycles. The amount of co-funding you are entitled to depends on you and your partner's nationalities. At least one of you must be a Singapore Citizen to enjoy the scheme.

	SC-SC Couple*	SC-PR Couple*	SC-Foreigner Couple*
Per Fresh Cycle	75% ($6300 max)	55% ($4600 max)	35% ($3000 max)
Per Frozen Cycle	75% ($1200 max)	55% ($900 max)	35% ($600 max)

* SC – Singapore Citizen, PR – Permanent Resident

 

Tips

You can use your Medisave to offset remaining costs. Withdrawal limits are set at $6000 (for 1st cycle), $5000 (for 2nd cycle) and $4000 (for 3rd and subsequent cycle), up to a lifetime cap of $15000. These limits also apply to ACP.

Am I Eligible?

To qualify for the scheme, you must:

• Be under age 40 (for women) at the point of embryo transfer 
• Have started or are scheduled to start a treatment cycle at participating public hospitals on or after 1 January 2013, i.e. the date of ovarian simulation (for fresh cycles) or the thawing of the embryo (for frozen cycle) is on or after 1 January 2013. 
• The treatment is either a fresh or frozen ART cycle 
• Be a Singapore Citizen if your spouse is not at the start of the cycle 
• Have not already received co-funding for 3 fresh and 3 frozen cycles in the past 
• Be deemed fit for ART treatments by a medical doctor 

How Do I Apply?

No application is needed. You are only required to complete a declaration form to confirm your eligibility. The form is available at the assisted reproductive clinic of participating public hospitals.

Once the verified eligible, the subsidies will automatically apply to your hospital bill.

Participating Public Hospitals

• National University Hospital (NUH) - Clinic for Human Reproduction
• Singapore General Hospital (SGH) - Centre for Assisted Reproduction
• KK Women's and Children's Hospital (KKH) - KKIVF Centre

 For more details, please refer to the Ministry of Health website.

As a result of the co-funding given by the government, many gynaecologists from the private hospitals often advise patients who are Singapore Citizens and need to have ART treatments to transfer to one of the participating public hospitals in order to enjoy this benefit.  

As Singaporeans tend to marry late these days, by the time they decide to start a family and discover that they need treatment to conceive, they may be their mid-30s already. My advice is : Do start early if you can!

Li Ka-Shing teaches you how to buy a car and house in 5 years

Here's an interesting article that I came across online.

Hong Kong billionaire Li Ka-Shing shares some of his money wisdom, outlining an inspirational five-year plan to improve one’s lot in life

This article is translated from the original Chinese article by Edmund Ng at CeoConnectz.

Suppose your monthly income is only RMB 2,000, you can live well. I can help you put money into five sets of funds. The first RMB 600, second RMB 400, third RMB 300, fourth RMB 200, fifth RMB 500.

The first set of funds is used for living expenses. It’s a simple way of living and you can only be assigned to less than twenty dollars a day. A daily breakfast of vermicelli, an egg and a cup of milk. For lunch just have a simple set lunch, a snack and a fruit. For dinner go to your kitchen and cook your own meals that consist of two vegetables dishes and a glass of milk before bedtime. For one month the food cost is probably RMB 500-600. When you are young, the body will not have too many problems for a few years with this way of living.

Second set of funds: To make friends, expand your interpersonal circle. This will make you well off. Your phone bills can be budgeted at RMB100. You can buy your friends 2 lunches a month, each at RMB 150. Who should you buy lunch for? Always remember to buy lunch for people who are more knowledgeable than you, richer than you or people who have helped you in your career. Make sure you do that every month. After one year, your circle of friends should have generated tremendous value for you. Your reputation, influence, added value will be clearly recognized. You’ll also enhance your image of being good and generous.

Third set of funds: To learn. Monthly spend about RMB 50 to RMB 100 to buy books. Because you don’t have a lot of money, you should pay attention to learning. When you buy the books, read them carefully and learn the lessons and strategies that is being taught in the book. Each book, after reading them, put them into your own language to tell the stories. Sharing with others can improve your credibility and enhance the affinity. Also save up RMB 200 per month to attend a training course. When you have higher income or additional savings, try to participate in more advanced training. When you participate in good training, not only do you learn good knowledge, you also get to meet like-minded friends who are not easy to come by.

Fourth set of funds: Use it for holidays overseas. Reward yourself by traveling at least once a year. Continue to grow from the experience of life. Stay in youth hostels to save cost. In a few years you would have travelled to many countries and have different experiences. Use that experience to recharge yourself so that you’ll continually have passion in your work.

Fifth set of funds: Invest. Save the RMB 500 in your bank and grow it as your initial startup capital. The capital can then be used to do a small business. Small business is safe. Go to wholesalers and look for products to sell. Even if you lose money, you will not lose too much money. However, when you start earning money, it will boost your confidence and courage and have a whole new learning experience of running a small business. Earn more and you can then begin to buy long-term investment plans and get long-term security on your financial wealth being of yourself and your families. So that no matter what happens, there will be adequate funds and the quality of life will not decline.

Well, after struggling for a year and if your second year salary is still RMB 2,000, then that means you have not grown as a person. You should be really ashamed of yourself. Do yourself a favour and go to the supermarket and buy the hardest tofu. Take it and smash it on your head because you deserve that.

If your monthly income is at RMB 3,000, you must still work very hard. You must try to find a part time job. It will be great to find part time sales jobs. Doing sales is challenging, but it is the fastest way for you to acquire the art of selling and this is a very deep skill that you will be able to carry it for the rest of your career. All successful entrepreneurs are good sales people. They have the ability to sell their dream and visions. You’ll also meet many people that will be of value to you in the later part of your career. Once you’re in sales, you will also learn what sells and what not. Use the sensitivity of detecting market sentiments as a platform for running your business and in the identification of product winners in the future.

Try to buy minimal clothes and shoes. You can buy them all you want when you’re rich. Save your money and buy some gift for your loved ones and tell them your plans and your financial goals. Tell them why you are so thrifty. Tell them your efforts, direction and your dreams.

Businessmen everywhere need help. Offer yourself to do part time for any kind of opportunities. This will help to hone your will and improve your  skills. You will start to develop eloquence and soon, you’ll be closer to your financial goals. By the second year, your income should be increased to at least RMB 5,000. Minimum it should be RMB 3,000, otherwise you would not be able to keep up with inflation.

No matter how much you earn, always remember to divide it into five parts proportionately. Always make yourself useful. Increase your investment in networking. When you increase your social investment, expand your network of contacts, your income also grows proportionately. Increase your investment in learning, strengthen your self confidence, increase investment in holidays, expand your horizons and increase investment in the future, and that will ultimately increase your income.

Maintain this balance and gradually you will begin to have a lot of surplus. This is a virtuous circle of life plans. Your body will start to get better and better as you get more nutrition and care. Friends will be aplenty and you will start to make more valuable connections at the same time. You will then have the conditions to participate in very high-end training and eventually you’ll be exposed to bigger projects, bigger opportunities. Soon, you will be able to gradually realize your various dreams, the need to buy your own house, car, and to prepare an adequate education fund for your child’s future.

Life can be designed. Career can be planned. Happiness can be prepared. You should start planning now. When you are poor, spend less time at home and more time outside. When you are rich, stay at home more and less outside. This is the art of living. When you are poor, spend money on others. When you’re rich, spend money on yourself. Many people are doing the opposite.

When you are poor, be good to others. Don’t be calculative. When you are rich, you must learn to let others be good to you. You have to learn to be good to yourself. When you are poor, you have to throw yourself out in the open and let people make good use of you. When you are rich, you have to conserve yourself well and don’t let people easily make use of you. These are the intricate ways of life that many people don’t understand.

When you are poor, spend money so that people can see it. When you are rich, do not show off. Just silently spend the money on yourself. When you are poor, you must be generous. When you are rich, you must not be seen as a spendthrift. Your life would have come full circle and reach its basics. There will be tranquility at this stage.

There is nothing wrong with being young. You do not need to be afraid of being poor. You need to know how to invest in yourself and increase your wisdom and stature. You need to know what is important in life and what is worth investing in. You also need to know what you should avoid and not spend your money on. This is the essence of discipline. Try to avoid spending money on clothing, but buy a selective number of items that have class. Try to eat less outside. If you were to eat outside, do make sure you buy lunches or dinners and foot the bill. When buying people dinner, make sure you buy dinners for people who have bigger dreams than you, and work harder than you.

Once your livelihood is no longer an issue, use the remainder of your money to pursue your dreams. Spread your wings and dare to dream! Make sure you live an extraordinary life!

Famous theory from Harvard: The difference of a person’s fate is decided from what a person spends in his free time between 20:00 to 22:00. Use these two hours to learn, think and participate in meaningful lectures or discussion. If you persist for several years, success will come knocking on your doors.

No matter how much you earn, remember to split your salary into five parts. Take care of your body so that it will still be in good shape. Invest in your social circle so that you will constantly meet new people where you can learn new knowledge from. Expanding your network will also have an important impact in how much you earn eventually. Travel every year and expand your horizons. Also keep abreast with the latest developments in the industry. If you follow this plan diligently, you will soon see big surplus in your funds.

Whatever happened in the past is over. Do not dwell on past mistakes. There’s no point crying over spilt milk. Everybody makes mistakes. It’s what you learn from the mistakes, and promising yourself not to repeat those mistakes that matters. When you miss opportunities, don’t dwell on it, as there are always new opportunities on the horizon.

Being able to smile when being slightly misunderstood is good upbringing. When you’re wronged and you smile with calmness, it is generosity. When you’re being taken advantage of and you can smile, you’re being open-minded. When you are helpless and you can do a philosophical smile, you’re in a calm state. When you’re in distress and you can laugh out loud, you’re being generous. When you’re looked down and you can calmly smile, you’re being confident. When you’re being jilted in relationships and you can smile it off, you’re being suave.

There are many people who are struggling to make ends meet. It doesn’t matter if you are rich or poor. There are lessons for all to learn from Li Ka Shing.