Income Per Capita Criterion for Pre-school Subsidies for All Families
Ministry of Social and Family DevelopmentSpeakers
Summary
This question concerns Assoc Prof Daniel Goh Pei Siong's inquiry into why income per capita is not used to determine pre-school subsidy eligibility for all families instead of only larger households. Minister Desmond Lee explained that the Early Childhood Development Agency primarily uses household income for simpler assessments focusing only on both parents' incomes. Per capita income is permitted for families with five or more members and at least three dependants to better reflect the financial needs of larger households. Minister Desmond Lee noted that extending the per capita approach could disadvantage smaller families, as some might exceed per capita ceilings despite qualifying under household income limits. He concluded that the current system is a pragmatic approach that assists larger families without penalizing smaller ones or requiring more complex income assessments for the majority.
Transcript
41 Assoc Prof Daniel Goh Pei Siong asked the Minister for Social and Family Development why is the Ministry not using income per capita as the basis to assess qualification for pre-school subsidies for all families instead of just for larger families of five or more members.
Mr Desmond Lee: The Early Childhood Development Agency (ECDA) uses household income to assess whether a family qualifies for means-tested preschool subsidies. This approach looks only at the income of both parents of a child in a household.
However, we recognise that for larger families with more dependants, total household income may not capture their financial means. Hence, we have allowed families with five or more members and who have three or more dependants, to have their income assessed on a per capita basis. The per capita approach helps larger families but is more involved, as we have to look into the income of all family members staying in the same residence.
Extending the per capita approach to all families is not necessarily more advantageous for smaller households. ECDA has structured the preschool subsidies such that for 4-member households, the household income and per capita income ceilings for each subsidy tier are equivalent.
What this means is that for a 4-member family with household income of $7,500, their per capita income would be $1,875 and they would fall within the same tier for Additional Subsidy regardless of the household income or per capita income approach. For a 3-member family with the same household income, their per capita income would be $2,500 and they would then be disqualified from receiving Additional Subsidy as their income exceeds the current per capita income ceiling.
In summary, our approach of using household income for most families with the provision for larger families to use the per capita approach, is a pragmatic one of being helpful to larger families without disadvantaging small families or imposing a more involved assessment method on most families.