All in favour of Budget 2015, say “aye”. Let’s take a look at how you stand to benefit from the new schemes and initiatives introduced.
Broadly speaking, Budget 2015 had something sweet for just about everyone, with the possible exception of the richest folks amongst us who now have to fork out an additional 2% for personal income tax.
Whether you’re a student, a mid-career professional or an elderly retiree, you’re likely to find extra support in the coming years – be it in the form of skills upgrading, leadership development, tax rebates or social security benefits.
[Free Ebook] How should you invest your first $20,000?
We asked 14 Singapore finance bloggers to share what they would do if they could go back in time and invest their first $20,000. They can no longer rewind time, but you can learn from their experience and hopefully start with a better footing.
As a quick recap of the Budget, here are 5 reasons for you to cheer and say “aye”:
I am…25 years old, a fresh polytechnic graduate
Welcome to the working world, young padawan. Your journey has just begun.
Get a head start with the SkillsFuture Earn and Learn Programme, which will pair you with a suitable employer to receive on-the-job training and mentorship while you study for an industry-recognised qualification.
As you forge ahead in your career adventure, you can also tap into your SkillsFuture Credit for further education and training. You start with $500 credits in 2016 and the sum will be topped up regularly throughout your working life.
If you’re intending to pursue a specialised field, you may even wish to apply for fellowships and study awards. Who knows, you may become as successful as Edwin Neo of Ed Et Al, who decided to forego his training in interior design to pursue the unique art of bespoke shoemaking.
I am…35 years old, married with one child
Thank you for doing your “national service” and helping to alleviate Singapore’s declining birth rates. We know that having children can be a costly affair, so you should be happy to know that child care and schooling costs are going down.
Under the schemes for Anchor Operators and new Partner Operators, quality child care will become more affordable, with improved teacher quality and reduced fees at participating centres.
As your child grows older, you do not have to pay any exam fees if he/she is a full-time Singaporean student enrolled in a government-funded school (i.e., no need to pay for PSLE, GCE ‘N’, ‘O’ and ‘A’ level exams). Other miscellaneous expenditure, such as fees for enrichment programmes, may also be covered by your child’s Edusave Account, which will see a top-up of $150 to $600 depending on your child’s age.
Additionally, if you hire a foreign domestic worker to help out at home, the concessionary levy has now been halved to $60 per month.
On the personal front, you should see increased savings in your CPF account as well as a one-off 50% income tax rebate this year, capped at $1,000.
I am…45 years old, trying to switch careers
We get that sometimes, due to extenuating circumstances, you may decide to switch industries in the middle of your career, which can be a difficult change in itself.
To make the transition as painless as possible, you may consider going for further education and training courses funded by MOE and WDA to bolster your knowledge and skill sets.
Not only will you receive significant subsidies at a minimum of 90% of training costs, you can also enjoy multiple subsidies for modular courses, which will give you the flexibility of balancing career and family commitments alongside your studies.
I am…55 years old, planning for retirement
Good news for your CPF account: you now earn an additional 1% interest for the first $30,000 savings, on top of the existing 1% extra interest on the first $60,000. In numerical terms, this means that you will earn up to 6% interest on the first $30,000 saved in your account (by far a better deal than what most banks can offer), 5% on the next $30,000, and 4% for amounts above $60,000.
In addition, the CPF contribution rate has been adjusted to boost your retirement savings, as seen in the table below:
|Age||New CPF Contribution Rate (starting Jan 2016)|
|Above 50 to 55||
|Above 55 to 60||
|Above 60 to 65||
I am…65 years old, wondering if I can afford to retire
Now that you’ve hit your golden years, you may be wondering if you should continue working to keep yourself occupied or to start winding down your schedule. Either way, there is support in store.
Over the past decade, the employment rate of older workers aged 50 to 64 has increased, from 64.4% in June 2004 to 71.4% in June 2014. With the Special Employment Credit, which helps companies offset up to 11.5% of wages for workers aged 65 and above, your employer will be encouraged to continue re-employing you should you choose to extend your career.
Even if you find that your income is insufficient to support your retirement, there’s no need to worry.
Under the Silver Support Scheme (not to be confused with the Pioneer Generation Package), you will receive payouts of between $300 to $750 every three months, for the rest of your life. You automatically qualify for the scheme if you are amongst the bottom 30% of low-income Singaporeans aged 65 and above. The amount of assistance proffered will depend on three factors: your lifetime wages, household support, and housing type.
To give you a rough idea of what to expect – if you’re an average low-income senior living in a 1- or 2-room HDB flat, you’re likely to qualify for around $600 cash supplement per quarter.
In the interim before the Silver Support Scheme kicks in in the first quarter of 2016, you will also receive a “Seniors’ Bonus” GST voucher, if your assessable income for 2014 falls below $26,000.