How much the government spends on each Singaporean child until they enter the working world

The moment a baby first lets out loud cries that herald their entry into the world, parents are on the hook for taking care of everything their child needs, at least until they complete their tertiary studies and are able to fend for themselves in the working world.

Alongside parents, the Singapore government is also committed by default to spending a significant sum of money to ensure every child has the best possible start in life, notably in the areas of healthcare, education, among others.

In this article, we'll look at how much the government needs to spend on every Singaporean child until they reach adulthood.

DIRECT VS INDIRECT EXPENDITURE ON YOUNG SINGAPOREANS 

By their very nature, the benefits conferred by public goods and services are enjoyed by all. For example, the government spends a large sum of money each year on public hospitals, libraries, municipal works and even expenditure to build and strengthen foreign and trade relations, which all Singaporeans benefit indirectly from.

Another aspect we need to be aware of is the concept of is time. Much of the underlying infrastructure, systems, and policy development that we enjoy today has been built up over the decades, with costs borne by preceding generations of Singaporeans.

For the purposes of this article, we will only be dealing with direct expenditure attributable to each young Singaporean in the course of their lives.

GOVERNMENT GRANTS FOR SINGAPORE NEWBORNS

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Baby Bonus Cash Gift ($8,000 to $10,000): The first grant to expect is the Baby Bonus Cash Gift for parents of newborns.

The amount parents receive depends on the child's birth order.

This ranges from $8,000 (1st and 2nd child) to $10,000 (3rd and subsequent child). The Bonus is disbursed over 18 months.

Child Development Account First Step Grant ($3,000 to $18,000): All Singaporean children will also receive an initial $3,000 in the Child Development Account (CDA), which can be opened with either POSB, UOB or OCBC.

The government will provide additional dollar-for-dollar matching whenever parents top up their children's CDA, up to $3,000 for the 1st and 2nd child, $9,000 for the 3rd child and 4th, and $15,000 for the 5th and subsequent children.

MediSave Grant ($4,000): Even before you start talking or walking, you'll already be a CPF member, courtesy of the MediSave grant of $4,000 that all Singaporean babies receive, which can be used to pay for your MediShield Life premiums and other approved medical expenses.

This amount is enough to cover MediShield Life premiums for the next 21 years, even if no additional contributions are made.

GOVERNMENT GRANTS FOR PRE-SCHOOL KIDS 

In Singapore, pre-school is not compulsory, so pre-school subsidies would be incurred by the government if parents were to enrol their kids into infant care, child care or kindergarten.

In addition, grants and reliefs given to support parents, such as Working Mothers' Child Relief, isn't counted for the purposes of this article.

Subsidies For Infant Care - For kids aged 2 months to 18 months ($2,400 to $18,240): The government gives basic subsidies for full-day infant care regardless of income. Basic subsidies are $150 a month (for non-working mothers) and $600 a month (for working mothers). Depending on income, families can receive additional subsidies of up to $540 a month.

Subsidies For Child Care - For kids aged above 18 months to below 7 years ($8,100 to $39,960): The government gives basic subsidies for full-day child care regardless of income. Basic subsidies are $150 a month (for non-working mothers) and $300 a month (for working mothers). Depending on income, families can receive additional subsidies of up to $440 a month.

Kindergarten Fee Assistance Scheme (KiFAS) - For kids enrolled in kindergartens run by MOE or Anchor Operators ($1,260 to $6,120): Means-tested subsidies given by the government to students enrolled under a Ministry of Education (MOE) kindergarten or an Anchor Operator registered with the Early Childhood Development Agency (ECDA) amount to between $35 to $170 a month.

Prime Minister Lee Hsien Loong announced in his National Day Rally 2019 Speech that come Jan 2020, both the quantum and income ceiling for pre-school subsidies will be increased, which will cover 60 per cent of Singaporean households.

GOVERNMENT EXPENDITURE FOR COMPULSORY EDUCATION 

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When a Singaporean child reaches the age of 7, they begin at least 10 years of compulsory education - Primary 1 to 6, and Secondary 1 to 4 (or 5).

Primary School Expenditure ($72,120): According to Data.gov.sg, annual expenditure per student in Primary School in 2018 was $12,020.

Secondary School Expenditure ($62,072 to $77,590): According to Data.gov.sg, annual expenditure per student in Secondary School in 2018 was $15,518.

Edusave Contributions ($2,540 to $2,830): The government makes Edusave contributions every year your child is in Primary School and Secondary School. In 2019, the annual contribution per child was $230 for Primary School students and $290 for Secondary School students.

There are also bursaries, scholarships and financial assistance schemes available to encourage good-performing students and support students from lower-income households.

GOVERNMENT EXPENDITURE FOR TERTIARY EDUCATION

Most Singaporeans go on to pursue tertiary education - whether at the Institute of Technical Education, Junior College, Polytechnic, and/or University. The government provides financial support in the form of tuition fee grants to each Singaporean to study at a local public Institute of Higher Learning (IHL).

Full-Time Nitec/Higher Nitec Programmes ($29,486 to $58,972): According to Data.gov.sg, annual expenditure per student in a Full-Time Nitec/Higher Nitec course in 2018 was $14,743. Both Nitec and Higher-Nitec programmes take 2 years to complete, which means a student who earns both would take 4 years.

Junior College/Centralised Institutes ($35,404 to $53,106): According to Data.gov.sg, annual expenditure per student in a Junior College/Centralised Institute in 2018 was $17,702. Junior College education takes 2 years to complete, while Centralised Institutes have a 3-year programme.

Full-Time Publicly-Funded Diploma Programmes ($49,224): According to Data.gov.sg, annual expenditure per student in a publicly-funded diploma programme in 2018 was $16,408. Most diploma programmes take 3 years to complete.

Full-Time Publicly-Funded Degree Programmes ($88,768): According to Data.gov.sg, annual expenditure per student in a publicly-funded degree programme in 2018 was $22,192. Most degree programmes take 4 years to complete.

HOW MUCH THE GOVERNMENT SPENDS ON EACH CHILD TILL THEY ENTER THE WORKING WORLD 

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Obviously, the actual expenditure would depend on each child - the order of their birth, the amount of the education they pursue, and their household income.

At the very minimum, someone who only attends for compulsory education and qualifies for the least amount of subsidies would cost the government $151,732.

A hypothetical child who qualifies the maximum amount of subsidies and grants throughout their life would cost the government $248,860 up to Secondary School, plus between $29,486 to $137,992 and more, depending on their tertiary education route.

FINANCIAL SUPPORT DOESN'T STOP WHEN YOU START WORKING 

As you can see, the amount of money the government invests in each Singaporean is substantial. However, even after Singaporeans start work, the direct financial support that the government provides to Singaporeans continues in the form of housing grants, healthcare subsidies, and more.

Perhaps, like our parents who invested considerable sweat, tears and dollars in us, the government might hope that we feel a little happier when we do our part to pay it forward and contribute to nation-building, such as when we serve National Service, pay our taxes, or make donations to social causes.

This article was first published in Dollars and Sense.