Transfer of Unused Balances in Child Development Account to Edusave Account Upon Child's Entry into Primary School
Ministry of FinanceSpeakers
Summary
This question concerns MP Mr Victor Lye’s inquiry into whether unused Child Development Account (CDA) balances could be transferred to a child’s Edusave Account upon their entry into primary school. Minister for Finance Mr Gan Kim Yong responded that the two accounts serve different purposes, as the CDA covers preschool, healthcare, and developmental needs until the child turns 12. He noted that a transfer upon entering primary school would restrict parents from using the funds for non-educational expenses which remain relevant throughout the primary school years. Unused CDA balances are currently transferred to the Post-Secondary Education Account after age 12 to support higher education, while Edusave receives separate annual government contributions. The Government will maintain its review of CDA policies to ensure they remain relevant to parents' needs while providing additional financial assistance for educational expenses where required.
Transcript
92 Mr Victor Lye asked the Prime Minister and Minister for Finance whether the Ministry will allow the transfer of unused balances in the Child Development Account (CDA) into the child's Edusave Account under the Ministry of Education once a child enters primary school, so that these funds may continue to support educational needs beyond the preschool years.
Mr Gan Kim Yong (for the Prime Minister): The Child Development Account (CDA) and Edusave Account serve different purposes.
The Edusave scheme was established in 1993 to support the education of Singaporean students in primary and secondary school. Students can use their Edusave funds to pay for miscellaneous fees, approved school enrichment programmes and purchase of learning devices at secondary and pre-university levels. The Government provides annual contributions and ad hoc top-ups to Edusave. Parents who require additional financial support for educational expenses may apply for financial assistance from the Ministry of Education.
The CDA was established in 2001 as a special co-savings account to support parents in managing the cost of raising their children. CDA monies can be used for preschool and childcare expenses, and for healthcare or developmental needs at Baby Bonus-approved institutions, up till the time the child turns 12. As such, transferring unused balances to the child's Edusave Account when the child enters primary school will deprive parents from using the CDA balance for other purposes.
Taken together, parents can tap on Edusave and CDA to defray their child's educational and non-educational expenses during the primary school years. Unused CDA balances at the end of age 12 will be automatically transferred to the child's Post-Secondary Education Account (PSEA) to continue to support the child's educational expenses beyond primary and secondary school.
We will continue to review the uses of CDA to ensure they remain relevant to parents' needs.