It’s a tough year ahead, but working Singaporeans can expect a better life with these benefits from the Singapore Budget 2016.
Budget 2016 has just been announced (see our infographic on the Budget 2016 highlights). While it’s a conservative budget, it makes some much needed changes in favour of the working Singaporean.
We’ve put down some of the most important parts you can take advantage of. Act on it, because 2016 will be a tough year, and you’ll need any edge you can get.
1. Low Income Workers Can Earn More
The government is raising Workfare Income Supplement (WIS), which contributes additional funds to employees based on their age and income. You can use this online calculator to determine how much you’ll get.
In addition, the income ceiling is raised – those who earn up to $2,000 a month will now get the supplement as well (the previous income ceiling was $1,900.)
40% of WIS payouts are in cash, and the remainder go to CPF.
A good way to use the WIS payouts would be through…
2. Skills Upgrading
2016 is aimed at industry wide transformations, and raising productivity. This sets the direction and pace of businesses in the near future. With the SkillsFuture package already rolled out, and companies given higher grants to innovate, you can no longer afford to stagnate.
Companies will be looking to adopt new technologies, incentivise staff to take on a wider range of roles, or even open up to new markets abroad. They will start to prefer a competent, well-trained workforce over just having a high headcount. This opens up the possibility for new responsibilities, promotions, and higher wages. But if – and only if – you are one of the workers who upgrades yourself to fit the new role.
There was significant emphasis placed on Infocomm skills during the budget announcement. Programmes like the TechSkills Accelerator are in place to develop Information Technology (IT) proficiency. And the government has done the necessary work in surveying various firms, and identifying a growing need for people who can code, polish up applications, and manage e-commerce. Take the hint when upgrading yourself.
3. Adaptation and Transformation
The Ministry of Manpower (MoM) has an Adapt and Grow Initiative, which helps to connect laid-off professionals to new employers. The initiative includes training options for people faced with mid-career changes.
If you have been recently laid off, there may be some painful immediate realities facing you. The global economy is not doing well, thanks to the double whammy of an economically weak China and low oil prices. You may need to accept certain new realities, and get help from this programme. While you may not land a job that paid as well as your previous occupation, you will at least weather the storm.
If you feel your current occupation is tenuous (low demand for your skills, unlucrative work, etc.) the government has just given you the opportunity to jump ship. A combination of the Adapt and Grow Initiative, plus the SkillsFuture programme, are there to help you make a change.
For those willing to make a leap of faith, 2016 may not be a tough year. In fact, it may be a year of opportunity. There are few other times in history when the government has expended so much effort on revolutionising the workforce. If you always wanted to make that career switch to law, journalism, IT, etc., the support is now out there.
4. Having Children
A significant chunk of the budget is dedicated to raising our birthrate. The Child Development Account (CDA), which is started for parents to save for their children, now gets $3,000 from the very start. The government will match parents dollar-for-dollar when they save in the CDA (e.g. If parents save $1,200 in the CDA, the government will also put in S$1,200. This would mean a total of $5,400, inclusive of the original $3,000.)
In addition, expectant mothers can now use $900, instead of $450, from their MediSave when paying maternity costs.
Of course, these benefits are tiny compared to the cost of raising a child. But they make managing costs easier for new parents, who are often faced with getting a mortgage for the first time (and who are probably still paying off the wedding too).
5. Having a Second Chance at Housing
The Fresh Start Scheme provides S$35,000 to families with children, and who are living in rental flats, to buy their own two-room. Many of the beneficiaries owned HDB flats before, but for whatever reason lost them. This is their second chance. The grant is conditional, and depends on the beneficiaries staying employed and sending their children to school.
This is a vital safety net. Prior to this, those who lost their flats would often be confined to rental units, barring significant changes in fortune. This is good news for families facing mortgage difficulties.
6. For Low-Income Families, Looking After Parents Will be Easier
The Silver Support Scheme pays between $300 to $750 per month to the bottom 20% of senior citizens (aged 65 and above), depending on their flat size. For some lower income families, in which children struggle to provide for their parents, this is a significant boon.
Finally, Here are the Freebies:
There will be a $200 GST voucher this year, for those aged 21 or above, with an annual income of $26,000 or below in 2015. Here are some clever things you can spend your GST voucher on.
There will also be HDB conservancy rebates: three months rebate for those living in one and two-room flats, and two month rebates for those living in three and four-room flats.
If you have any outstanding debts, we suggest you make it a priority to pay them off with this money. 2016 is not a good year to be spendthrift, as the job market and employers’ bottom lines are plagued with uncertainty.
If you have no debts, save this to minimise your use of loans.
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By Ryan Ong
Ryan has been writing about finance for the last 10 years. He also has his fingers in a lot of other pies, having written for publications such as Men’s Health, Her World, Esquire, and Yahoo! Finance.