Mr Speaker, Sir, I beg to move, “That the Bill be now read a Second time”.
CHILD DEVELOPMENT CREDIT
2. Sir, in his Budget speech, the Minister for Finance had introduced the Child Development Credit as part of the ‘Grow & Share’ Package. The Credits will be paid into the Children Development Accounts (or CDAs), which most children already have. For those who do not currently have accounts, they will be able to open a CDA to receive their Credits.
3. Consequently, every Singapore citizen child aged 6 years old and below will be able to have a CDA, into which Government may provide top-ups from time to time. This is similar to how Government makes top-ups into Edusave accounts for school-going children. For this year’s ‘Grow & Share’ Package, all Singapore citizen children who are born from 1 January 2005 to 31 December 2011 will receive a Child Development Credit of either $300 or $400, depending on the annual value of their trustee’s home. In fact, the Minister of Finance has been very generous, parents who conceive the child now will get it. Parents do not need to make any contributions to the CDAs in order to receive these Credits.
4. The Credits can be used for the same purposes as specified in the current CDA. These include meeting the costs of the child’s or his/her siblings’ fees at Approved Institutions under the Baby Bonus Scheme, such as child care centres, kindergartens and special education schools, early intervention programmes, healthcare institutions as well as Medishield or Medisave-approved private integrated plans.
5. We need to amend the Children Development Co-Savings Act (CDCA) in order to allow all citizen children 6 years and below to open a CDA. We will also go one step further to allow the trustees of all citizen children to deposit monies into the CDAs on a voluntary basis, should parents wish to save for their children’s pre-school and medical needs through the CDAs.
6. Sir, the primary function of the CDCA is still to encourage married couples to have more children, through the Baby Bonus and Leave Schemes. This continues to remain so even after today’s amendments. The amendments will allow the CDA to be used as a conduit for the disbursement of the Credits and to ensure that the Credits are used in ways that would directly benefit the child. As such, there is no change in the eligibility criteria for receiving matching Government contributions for parents’ deposits made into the CDAs, which will remain available only to children who are eligible under the Marriage and Parenthood package.
7. Mr Speaker, Sir, let me explain the specific amendments in this Bill.
CONTENTS OF BILL
8. Clause 2 repeals the current long title of the Act and re-enacts a new one to reflect the additional features of the Scheme.
9. Clauses 3 to 5 of the Bill refer to the renaming of the Act and Scheme as the Child Development Co-Savings Act and Child Development Co-Savings Scheme. This will align the name of the Scheme with the name of the cash grant, which is, the Child Development Credit.
10. Clause 6(a) modifies section 3(1) of the Act to spell out the Scheme in greater detail. First, the new section 3(1)(a) retains the co-savings feature of the Scheme as an incentive for the promotion of marriage and parenthood.
11. Second, the section 3(1)(b) facilitates the provision of cash grants made by the Government from time to time for the development of children. By this change, cash grants that are appropriated by the Government under the Supply law can be paid into a CDA for use according to the purposes of the Scheme.
12. Third, a new section 3(1)(c) facilitates the making of financial provision by or on behalf of parents, whether or not the child is eligible for a co-savings arrangement under the Scheme. These contributions made by the parents can be used for expenses as approved under the Children Development Co-Savings Regulations, such as the child’s preschool, childcare or medical expenses.
13. Lastly, a new section 3(1)(d) refers to the recent amendments made to section 3(1) by the Women’s Charter (Amendment) Act 2011, which allows for the matrimonial assets divided between parents who have divorced, separated or had their marriages annulled, to be transferred into the child’s CDA. The transfer of matrimonial assets into CDA would now be applicable to all children with CDA, instead of only children who are eligible for the co-savings arrangement under the previous Scheme.
14. As a result of these changes, clauses 6(b), (c) and (d), which amend section 3(2) of the Act, allow for new Regulations to be made subsequent to the passing of the Bill. The Regulations will specify the different types of benefits accorded to different groups of children; and enable parents to make contributions to their child’s CDA. The Regulations will also stipulate eligibility for government matching contributions to savings made to these accounts; the payment of monies to a child; as well as the amount, mode, manner and terms and conditions of any such payment.
15. Finally the Bill also makes consequential amendments to the Education Endowment and Savings Schemes Act and the Income Tax Act by substituting the word “children” with the word “child” wherever it appears.
CONCLUSION
16. Mr Speaker, Sir, my Ministry will work with relevant agencies to effect the payments as expeditiously as possible. As the number of children involved is large, we will disburse the Credits in batches. The children with existing CDAs can expect to receive deposits by June 2011. For those who do not have a CDA currently, we will notify them to open the CDAs and they have up to 30 June 2012 to do so, in order to receive the Credits.
17. Sir, with this amendment, Child Development Credits can now be provided from time to time into the Children Development Accounts of young Singapore citizens, when there are surpluses to share with Singaporeans if and when passed by this House. It is a tangible expression of the “Grow and Share” theme of this year’s Budget.
Sir, I beg to move.
