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Tag: middle-income

  • Are You A Sandwich-Class Singaporean?

    Are You A Sandwich-Class Singaporean?

    Heard of the term sandwich class? The ‘sandwich class’ is an informal term coined to describe those in Singapore who live comfortably (not poor) but are ineligible to purchase HDB housing, and unable to afford private housing as well.

    In short, it describes people in the middle income class, mostly those who occupy the 30th to 70th percentile income group in Singapore.

    Due to rising costs of living, this group increasingly needs support, not just in terms of housing, but in other areas as well. For instance, those who are in the ‘sandwich generation’ also face the problem of dependency from their aging parents as well as young children.

    Luckily, the government recognises this problem and has introduced various measures to help the sandwich class, especially since this year’s National Day Rally.

    If you belong to this group of people, GET.com lists some measures and suggestions that can help you optimise the help rendered by the government:

    1. Buying Your Own Home

    One of the key measures to allow the sandwich class better access to public housing was the increase of the income ceiling limit. The household income ceiling, which currently stands at $10,000 for new HDB flats has been increased to $12,000.

    A similar increase was seen for executive condominiums (EC) as well, with the new income ceiling now at $14,000. The policy changes are specifically targeted to help the sandwich class since a household income of less than $10,000 doesn’t quite qualify as a working class income.

    The Special Housing Grant (SHG) has also been made easier to qualify. Previously, the SHG was only available to households with earning under $6,500, but has now been extended to those who earn under $8,500 per month.

    According to Department of Statistics in Singapore, our median household income last year was at $8,292, which means that most people will qualify for the SHG.

    2. Help For Childcare Expenses

    Other than tackling the problem of home ownership, a big problem Singapore faces is the low fertility rate.

    As it stands, we have been producing under replacement rate since 1977.

    To help parents defray the costs of raising children, the government has introduced the now infamous Baby Bonus Scheme and the Child Development Account (CDA) which matches savings by the government.

    In the latest update, the Baby Bonus has been increased again – an extra $2,000 for each child, and an extension of baby bonus for fifth child and beyond.

    This means that the first and second child will now get an $8,000 cash gift, while subsequent babies get $10,000 each. Parents can use these money to pay for your children’s education and medical costs.

    It was also announced during the 2015 National Day Rally that there will be an increase in Medisave grant for newborns, so there’s help for the increased premiums for the upcoming Medishield Life.

    Other than these measures, Singaporeans can definitely help themselves by ensuring that they plan for their future with careful financial planning.

    These include having enough savings, managing their household debts and also ensuring they are adequately covered by health insurance.

     

    Source: https://sg.finance.yahoo.com

  • Rich People Problems – Just Because They Stay In Private Properties Doesn’t Mean They Are Rich

    Rich People Problems – Just Because They Stay In Private Properties Doesn’t Mean They Are Rich

    Call it the power of mrbrown: The popular blogger’s tweet about a private property owner’s gripe is circulating online, provoking indignation and endless mockery.

    In a profile of Prime Minister Lee Hsien Loong’s Ang Mo Kio GRC by The Straits Times, father of three Chew B.W. was one of the constituents interviewed. His complaint: Not enough is being done for those living in private estates.

    Mr Chew noted the rising cost of living, such as the cost of a year’s tuition at The Learning Lab ($4,000) and a fencing costume for one of his children ($600). He added: “It doesn’t mean we are rich just because we live here. The Government should also help people like us – we pay the most taxes.”

    According to the Manpower Ministry’s website, the median gross monthly income in June 2014 was $3,770. The cost of a semi-detached house typically runs into seven figures.

    Mr Chew’s sentiments got short shrift from netizens on social media. The tweet has been retweeted almost 570 times. Here are some of the choicer comments on Twitter:

     
    Over on Facebook, user Callan Tham said: “Here, let me play the world’s smallest violin for them.” Kwan Tuck Soon also remarked: “The gahmen should help them upgrade to a mansion with a fencing room.”

    But it was Reddit user xavierkoh who had perhaps the most reasoned response: “Perhaps what we really need to cultivate as a community is a sense of empathy for the less privileged instead of always focusing on our own problems which might be more trivial in nature as compared to others. Without that, our society will further fragment into distinct social classes who only care about themselves.”

     

    Source: https://sg.news.yahoo.com

  • Average Singaporeans: Rich Elites Can Never Understand Our Simple Local Lifestyle

    Average Singaporeans: Rich Elites Can Never Understand Our Simple Local Lifestyle

    Dear All Singapore Stuff,

    I would like to share my reflections on what the upcoming SG50 anniversary means to me, based on my personal experiences as an average Singaporean.

    I have come to realize that the poor and lower-middle class represent an entirely different Singapore from the rich and upper-middle class. We are like two different nations.

    Kids from the rich and upper-middle class are different from birth. They are equipped with skills an average Singaporean will never get. They are taught to play various musical instruments, taught a variety of sports and even go for supplementary classes from a young age. Not surprisingly these kids end up doing well academically and also excel in other activities. Even if they do not succeed academically,they have the financial support and necessary connections to set up their own businesses to establish themselves. These kids dominate the better schools and will inevitably become the next generation of elites. As an end result, we have the elite producing more elites.

    What happens to the kids from the poor and lower middle class? The vast majority ends up in the neighbourhood schools. Less conducive environment, no guarantee of good teachers (I was once scolded by a MOE teacher for bothering her with too many questions about a humanities subject) and limited enrichment programmes. There are less opportunities for students to participate in competitions to boost their own confidence. Many cannot afford tuition. Quite a number are from broken families (myself included), and they are troubled by family problems even as they study. They also have to deal with exposure to kids who smoke, gangsters, bullies and other delinquents. These kids even have to work part-time during school holidays to increase their monthly allowance. Most end up in polytechnics or neighbourhood jcs and very few enter the local universities.

    Being one of the few neighbourhood school kids who entered a good jc and then a local university, I experienced a culture shock. I could not relate to the majority of my classmates in my jc. Almost everyone in my jc class stayed in a condo or landed house.

    I could not effectively communicate with them because I lacked relevant experiences like overseas trips as well as musical and sports talents. I couldn’t understand why every outing had to involve eating at a restaurant in the city area and why there was so much spending. Most of the girls stayed in condos and frequently called others to come over for tennis games, swimming, barbecues and other frivolous celebrations. I actually felt embarrassed to be staying in a hdb flat with so few fun facilities as I could not engage my classmates in a similar manner. They had perfect families with supportive parents and they went on overseas trips every holiday in contrast to neighbourhood school people who usually worked part-time during holidays.

    They were seasoned travelers who had no qualms about staying overseas for weeks without their families! Same thing in university. I found that there were fewer and fewer of the neighbourhood school kids with whom I could better identify. Those I know who went on exchange programmes and overseas CIP trips were mostly scholars and wealthy people. Those with greater purchasing power also enriched their university experience with participation in marathons, camps and clubbing events whereas those who were poorer were stuck with memories of lectures and tutorials, school activities and the inevitable bank loan.

    Most of the rich people tend to think and behave similarly. For instance, during jc, they were taking their Grade 8 piano examinations at the same time, they took SATs while preparing for ‘A’ levels and later on in university, they took up driving lessons simultaneously. I could not even afford to take up driving and I didn’t see the point of it because I have no car.

    I think the poor and lower middle class appreciate simple pastimes better. A stroll in the park, running at the stadium, playing board games or card games at a void deck or playing basketball at a public basketball court is simply too boring for the wealthier people. Window-shopping without any purchase is ridiculous to them. They will never be seen doing any of these activities and will sneer at you or look bewildered if you even suggest any of these activities. If you say that $13 is too expensive for a movie or that $70 is too much for Universal Studios, they will just scold you for complaining so much. Gradually,they will abandon you for being such a boring and negative person.

    I have seen enough to believe that the non-elite can never truly be part of one Singapore with the elites. We have different upbringings, different values, different lifestyles, different educational experiences and a different sense of identity. Our life goals are also different. While the elites love to say that what we see as elite is what they see as meritocracy, the hard truth is that there’s such a thing as inherited meritocracy, and the non-elite lack the necessary resources and upbringing to properly compete with them. This leaves the majority of the non-elite with limited social mobility.

    Equality is a lie. Rather than deceive myself into thinking that there can be a true, lasting friendship with an elite person, I choose to believe that elites can never understand or appreciate simplicity while living within the comforts of their condos and landed houses. Of course, I will work hard. But I also accept the reality that I am disadvantaged relative to the wealthier segments of society. Fraternization with them will only be counter-productive to my life goals.

    As far as the non-elite like myself are concerned, it is best to leave the elites to their extravagant lifestyles. I strongly believe that the poor should not provide any entertainment to the rich. If we are invited to their parties, we should decline. Leave them to celebrate with their ilk. As we prepare to celebrate Singapore’s golden jubilee, let’s not deceive ourselves into thinking that we are all one. We certainly are not.

    Fred
    A.S.S. Contributor

    Source: www.allsingaporestuff.com

     

  • Singapore Budget 2015 – Winners And Losers

    Singapore Budget 2015 – Winners And Losers

    Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam delivered his speech on Budget 2015 on Monday, and there were few surprises.

    As expected, he talked about the Silver Support scheme for the low-income elderly, the enhancements to the Central Provident Fund System, handouts in the form of GST vouchers, and more help for SMEs.

    Perhaps the biggest surprise was the higher personal income tax rate for top earners.

    Here’s a round-up of the key announcements based on the “winners” and “losers”:

    Biggest loser: High-income earners

    Singapore’s top 5 percent, those who earn at least $160,000, will pay higher personal income tax.

    “I will raise the top marginal rate by two percentage points, from 20 per cent to 22 per cent, for the highest income earners, with a chargeable income above $320,000. I will also make smaller adjustments that will raise income tax for the others in the top 5 per cent,” he said.

    The higher tax rates will apply starting with income earned in 2016 and on taxes to be paid in 2017. It is expected to raise additional revenue of $400 million a year when it comes into effect.

    Loser: Businesses relying on Transition Support Package

    Tharman announced that the Wage Credit Scheme will be extended for 2016 and 2017, but level of co-funding will be reduced. He will also extend the CIT rebate for years of assessment 2016 and 2017 at the same rate of 30 per cent of tax payable but up to a lower cap of $20,000 per year of assessment. He will let the Productivity and Innovation Credit (PIC) Bonus expire.

    The three schemes make up the Transition Support Package, which is estimated to disburse $7.6 billion over three years.

    Loser: Car owners

    Tharman announced higher petrol duty rates effective the same day as his speech. The duty rates for premium grade petrol will be increased by $0.20 per litre and internmediate grade petrol by $0.15 per litre.

    Tharman noted that petrol duty rates have remained unchanged since 2003, and that with alling oil prices, pump prices after the petrol duty changes would remain lower than the level in the last two years.

    Winner: Middle-income households

    To help middle-income taxpayers, Tharman announced a personal income tax rebate of 50 per cent, setting the cap at $1,000. It will apply for year of assessment of 2015 (for income earner in 2014).

    1.5 million individuals are expected to benefit from the tax rebate, which will cost the government $717 million.

    Also, to support middle-income families, the foreign domestic worker concessionary levy will be reduced from $120 per month to $60 per month and extended to households with children aged below 16 from below 12.

    Winner: Lower-income households

    The quantum for the GST Voucher will be increased by $50 in cash across the board from 2015 onwards. It is expected to benefit 1.4 million Singaporeans.

    Winner: CPF members

    As proposed by the NTUC and CPF Advisory panel, the government will increase the CPF salary ceiling from $5,000 to $6,000. It is expected to benefit at least 544,000 CPF members.

    The contribution rates for workers aged 50 to 55 will be restored to the same level as those for younger workers. Thus, the contribution rates for these workers will go up by two percentage points in 2016 (1 percentage point each from employer and employee).

    For workers aged 55 to 60, the rate will go up by 1 percentage point from employers, and for workers aged 60 to 65, it will go up by 0.5 percentage points from employers.

    To make the CPF system more progressive, an additional 1 per cent extra interest will be paid on the first $30,000 of CPF balances from age of 55.  The change will take effect from the start of next year.

    Winner: Low-income elderly

    The Silver Support Scheme will be a new feature of Singapore’s social security system, said Tharman.

    “It is a permanent scheme for both today’s seniors and those in the future,” he said.

    Silver Support will be paid quarterly, similar to Workfare. It will provide a supplement of $300 to $750 every quarter for eligible seniors. The average recipient will get $600 per quarter. All the seniors who qualify will receive the supplements for life, as long as they remain eligible.

    The scheme is aimed to support the bottom 20 per cent of Singaporeans aged 65 and above. The assessment will be done automatically, so there will be no need for application. It is estimated to cost about $350 million in the first full year. The Ministry of Manpower is expected to implement it around the first quarter of 2016.

    Aside from the scheme, Tharman also said seniors aged 55 and above will get a GST seniors’ bonus in 2015 to help with their daily expenses. It will effectively double the GSTV cash component that they usually receive.

    Also, those aged 65 and above and living in HDB flats will get an additional $300 this year.

    Winner: Skills upgraders

    Tharman announced a SkillsFuture Credit in which each Singaporean 25 years old and above will receive an initial credit of $500 from 2016. Further top-ups will be made at regular intervals. The credits can be used for education and training.

    Education and training subsidies for all Singaporeans aged 40 and above will be enhanced to a minimum of 90 per cent of training costs for courses funded by the Ministry of Education and the Workforce Development Agency.

    The subsidies will be significant, Tharman pointed out. For example, for a part-time undergraduate course such as a Bachelor of Engineering, the total fees payable by a student will be reduced by 60 per cent, from about $17,000 to $6,800.

    Tharman also introduced the SkilsFuture Study Awards and the SkillsFuture Fellowships to develop deep skills and mastery in the growth clusters of the future, as well as the SkillsFuture Leadership Development initiative to encourage companies to groom Singaporeans in leadership roles.

    Winner: Families with children

    Tharman announced the introduction of a new partner operator (POP) scheme to complement the anchor operator scheme. Parents will benefit from lower fees than these centres currenly charged, Tharman said.

    He also said the government will top up the Child Development Accounts of every Singaporean child aged six and below in 2015. Those currently without CDAs can open accounts and receive the top-up. The majority of children will receive $600, he said.

    Also, fees for national examinations for Singaporean students in government-funded schools will be waived, saving families and students up to $900 from primary school to pre-university.

    Government will also provide a $150 top-up to the Edusave Accounts of Singaporeans students aged 7 to 16 on top of the annual contribution of up to $240. Students above the age of 16 who are still in secondary school will also get the top-up.

    Tharman also said the MOE Financial Assistance Scheme will be enhanced and a transport subsidy will cover at least half of students’ transport costs.

    Annual grants for school-based financial assistance will also be increased.

    Post-Secondary Education Account (PSEA) of Singaporeans aged 17 to 20 will also get a top-up. The majority will receive $500.

    Winner: SMEs, start-ups, businesses in expansion mode

    Tharman said he would top up the National Research Fund by $1 billion this year to encourage firms to invest in research and development.

    To reduce early-stage funding gaps for start-ups, the government will increase the co-investment cap for SPRING’s Startup Enterprise Development Scheme (SEEDS) and Business Angel Scheme.

    The government will also pilot a venture debt risk-sharing programme with selected financial institutions to provide high growth companies with an alternative to equity financing and traditional bank loans.

    It will also raise the support level for SMEs for all activities under IE Singapore’s grant schemes from 50 per cent to 70 per cent for three years. It is expected to benefit about 700 projects.

    For companies venturing overseas, Tharman said he will enhance the Double Tax Deduction for the Internationalisation scheme to cover salaries incurred for Singaporeans posted overseas.

    Tharman also introduced a new tax incentive, the International Growth Scheme (IGS), to provide support to meet the needs of larger Singaporean companies in their internationalization efforts. Qualifying companies will enjoy a 10 per cent concessionary tax rate on their incremental income from qualifying activities.

    The tax allowance for acquisitions costs will also be increased from 5 per cent to 25 per cent of the value of acquisition. Companies will also be able to claim M&A benefits for acquisitions resulting in at least 20 per cent shareholding in the target company, down from 50 per cent.

     

    Source: https://sg.finance.yahoo.com

  • Tommy Koh: I Am Disturbed By The Inequality In Singapore

    Tommy Koh: I Am Disturbed By The Inequality In Singapore

    Dr Tommy Koh has revealed that the poverty rate in Singapore can be as high as 33 percent in Singapore and 60 percent of university students come from families which cannot earn enough to survive.

    “I am disturbed by the inequality in Singapore,” Dr Koh wrote in an opinion piece in The Straits Times on Jan 3.

    “We have one of the highest Gini coefficients in the world. I am unhappy that many of our children are growing up in poverty. About a third of our students go to school with no pocket money to buy lunch.”

    Indeed, the poverty rate in Singapore has been estimated to be as high as 30 percent. National University of Singapore economist Tilak Abeysinghe has also calculated that 30 percent of Singaporeans cannot earn enough and have to spend 105 percent to 151 percent of their incomes.

    “As a trustee of two education trusts, I am reminded each year of the large number of needy students in our schools and tertiary institutions. I was shocked when the president of one of our universities told us recently that 60 per cent of his students need financial assistance,” Dr Koh also said.

    Indeed, a Straits Times survey had shown that two-thirds of middle-income households in Singapore are able to earn enough only to spend on basic necessities and nothing else.

    “At the other end of the spectrum, I am worried about the growing number of the elderly poor. Many of them are in poor health and have inadequate savings. Many of them live in loneliness, having no family or been abandoned by family and relatives,” he said.

    It is indeed the case that over the past few years, there have been a growing number of stories of how older Singaporeans have chosen to die because they cannot afford their medical fees.

    What Dr Koh say is not new but it is the first admission from someone who is close to the establishment to have detailed these facts.

    Today, Singapore has risen to become the most expensive country and city in the world.

    But Singaporeans still continue to earn one of the lowest wages among the developed countries in the world. In fact, there is still no minimum wage in Singapore – one of only 10 percent of countries in the world not to have one.

    In 2012, Dr Koh also wrote in an article comparing the GDP per capita of Singapore with the Nordic countries. Singapore’s GDP per capita was on par with the Nordic countries, but wages are drastically different.

    Dr Koh revealed that cleaners in Singapore would only earn $800 when cleaners in the Nordic countries would earn between $2,085 to $5,502, or several times more.

    However, because Singaporeans also have to pay for the highest cost of living in the world, this has also meant that Singaporeans have the lowest purchasing power among the developed countries.

    Dr Koh had then also written, “The truth is that we pay these workers such low wages not primarily because their productivity is inherently low, but largely because they are competing against an unlimited supply of cheap foreign workers.

    “The solution is for the State to reduce the supply of cheap foreign workers or introduce a minimum wage or to target specific industries, such as the hospitality industry, for wage enhancement.”

    It is debatable whether the government has done so. The government has said that the basic wages of cleaners will be increased to $1,000 every month and for security guards, this will be increased to $1,100 but the new base salary will only take effect in 2016 for the latter.

    However, critics argue that $1,000 or $1,100 is still insufficient when Singaporeans have estimated that a minimum wage of $1,700 or more would be necessary to have the most basic of living in Singapore.

     

    Source: www.therealsingapore.com