Budget 2023: Child relief for working mothers to be fixed from 2024

WORKING mothers will be allowed to claim a fixed amount of tax relief for children born or adopted next year – a change from the current structure that is based on a percentage of their income.

The government will also allow the foreign domestic worker levy tax relief to lapse from the year of assessment 2025, which applies to income earned in 2024.

These adjustments to tax reliefs were announced by Deputy Prime Minister and Finance Minister Lawrence Wong on Tuesday (Feb 14) during his Budget statement.

Working mothers will be able to claim annual reliefs of S$8,000 for the first child born or adopted on or after Jan 1, 2024, S$10,000 for the second child, and S$12,000 for the third and subsequent child.

Currently, the amount mothers can claim is based on a percentage of their income: 15 per cent for the first child, 20 per cent for the second child, and 25 per cent for the third and subsequent child.

The change means higher-income mothers would receive a lower amount of tax reliefs than before, while lower-income mothers may see their reliefs rise.

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Unwed, single mothers would not be able to claim this relief.

Wong added that the tax relief on the foreign domestic workers levy has been allowed to lapse as the government has introduced a migrant domestic worker levy concession that provides more targeted support for families who need help caring for dependents.

The National Population and Talent Division, under the Strategy Group in the Prime Minister’s Office, said in a press release on the same day that the concessionary levy is a more targeted and progressive way of supporting families who need help with caring for their dependants.

There would be no change to the concessionary levy.