On the back of rising Labour Force Participation Rate (LFPR) for women over the past decades, 52.5% of those married are dual-career couples. While this may be within our expectations, what may not be is an increasing trend of women being the sole breadwinner in the household.
In 2010, there were only 5.8% of married couples where only the wife was employed. Fast-forward to today, this number has jumped over 25%, and 7.4% of married couples in 2020 were comprised of only working wives.
The number of stay-at-home dads may be on the rise. According to the 2023 Persons Outside the Labour Force report, 700 male residents were not working because they were caring for their children. Nevertheless, there remain more women, about 11,000 of them, who are stay-at-home mums.
This means that women in Singapore are earning a competitive income, and families may choose the stronger income earner to stay in the workforce. Thanks to government incentives that encourage mothers to continue working, there may also be more financial incentives for dads to stay home compared to mums.
Here are 4 reasons why it pays more to be a stay-at-home dad.
Read Also: What’s The Median Salary In Singapore (At Every Age, Gender, Education and Race)
#1 Working Mother’s Child Relief
According to IRAS, working mothers are entitled to the Working Mother’s Child Relief (WMCR) if their child is a Singapore citizen. Depending on the number of children they have, this relief can substantially reduce their income tax substantially.
From YA2025, which is the next tax filing period in 2025, the relief will change from a percentage of an eligible working mother’s annual earned income to a fixed dollar tax relief. Note that the change will be based on whether your child is born/adopted before 1 January 2024.
For example, for a mother with two children, 35% of her earned income would not be subject to any income tax. Assuming her income is $60,000 a year, this relief would reduce her taxable income by $21,000. Excluding other deductions, her income tax bill would be $515.
From YA2025, a similar profile mother of 2 children born in 2024 would only be able to claim $18,000 in WMCR. This she would be taxed $690 on a $60,000 annual income.
If the husband had worked and earned the same income, he would not be eligible for this relief, which would require him to pay $1,950 of income tax, 3 to 4 times what working mothers would pay.
Read Also: Singapore’s Tax Reliefs: 2 Scenarios Where It Doesn’t Pay To Work
#2 Grandparent Caregiver Relief
Working mothers who enlist the help of their parents, parents-in-law or even grandparents and grandparents-in-law to take care of their children can claim $3,000 in Grandparent Caregiver Relief.
From YA2025, parents can claim the Grandparent Caregiver Relief even if their caregivers earn $8,000 a year. Previously, the income cap for this scheme was up to $4,000.
Again, working fathers cannot claim this relief if the roles reversed and their wives were the stay-at-home parent.
#3 Higher Basic and Additional Infant Care, Childcare and Kindergarten Subsidies
According to the Ministry of Social and Family Development (MSF), working mothers whose household income is less than $12,000/month are entitled to higher subsidies for infant care, childcare and kindergarten.
As you can see in the table below, working mothers get a Basic Subsidy of $600, while non-working mothers only get a Basic Subsidy of $150.
Moreover, there is an Additional Subsidy of up to $710 for working mothers who have a gross monthly household income of $3,000 and below.
Similarly, this extends to Full-Day Childcare Programmes, where working mother enjoy a Basic Subsidy of $300, while non-working mothers only get $150. Again, working mothers are eligible for a higher Additional Subsidy worth up to $467 a month, compared to no Additional Subsidy for non-working mothers.
When the child goes into kindergarten, working mothers will similar enjoy higher subsidies. While all families are eligible for up to $161 in Kindergarten Fee Assistance Scheme (KiFAS), only families with working mothers may be eligible for KCare Additional Subsidy of up to $235 per month.
Source: Made For Families
An annual income of $60,000 would equate to a monthly income of $5,000. This means that the working mother may be eligible for up to $500 in Additional Subsidy for a full-day infant care programme, up to $260 for a full-day child care programme, and more in KCare subsidies (which you can calculate on the MOE website).
If the wife had chosen to be a stay-at-home mum instead, the family would not have qualified for the Additional Subsidy and higher Basic Subsidy. But, all families qualify for the Basic Subsidy.
Read Also: Complete Guide For Singaporeans Preparing For Their First Child
#4 Maternity Leave
According to the Ministry of Manpower, Singaporean working mothers are entitled to 16 weeks of fully-paid maternity leave.
This is 4 times more than working fathers, who are entitled to just 4 weeks of paternity leave.
Assuming the wife has an annual income of $60,000, the net gain will be 12 weeks of paid leave. This means the family potentially earns approximately $13,850 more while taking care of their child.
Under this arrangement, parents can spend more quality time with their child than if the mother had chosen to be a housewife.
Of course, both mothers and fathers are eligible for the new up to 10 additional weeks of Shared Parental Leave as well.
Read Also: Guide To Understanding How Shared Parental Leave Works In Singapore
LAPSED For YA2025: Foreign Domestic Worker Levy (FDWL) Relief
While it may be less needed with a stay-at-home parent, some families with a stay-at-home dad (or mom) may still require the assistance of a foreign domestic helper.
According to IRAS, the Foreign Maid Levy (FDWL) relief will no longer apply for YA2025.
Previously, the FDWL was only claimable by female taxpayers who have earned income. If the couple decided to hire a maid, the working mother can claim the FDWL relief, which is 2x the levy she paid for her maid.
If they paid the concessionary rate of $60 a month, the working mother would be entitled to $1,440 ($60 x 12 months x 2) of FDWL relief. Assuming she earned an annual income of $60,000, this would equate to $100 of tax savings.
If she paid the normal rate of $300 a month, (i.e. the child is above 16 and no longer eligible for a levy concession for hiring their migrant domestic worker) she would be entitled to $7,200 of FDWL relief. This would equate to about $500 of tax savings.
If the wife is a stay-at-home mum, the family cannot claim this tax relief. As mentioned, this will no longer apply from YA2025 anyway.
Read Also: Which Makes Most Financial Sense? Domestic Helper vs Nanny vs Infant Care
More Support For Working Mothers To Build Their Careers
As the government continues to take steps to bridge the gender pay gap, it may be increasing financial incentives for the family to choose a stay-at-home dad rather than a stay-at-home mum.
Obviously, it is not the intention of the government to keep dads at home instead of mom. It’s likely to encourage both parents to work. That’s why it has also introduced new schemes to urge men to play a bigger role at home in taking care of children too.
Recently, the Government-Paid Paternity Leave was extended to 4 weeks instead of 2 weeks previously, while the Shared Parental Leave scheme offers more flexibility for dad to share more time off work to be with their children. There are many other schemes too, including the Goverment Paid Childcare Leave scheme which both working mums and dads are eligible for separately.
Read Also: The Gig Economy – Do You Have A Job Or A Career?
The post 4 Reasons Why It Pays More To Be A Stay-At-Home-Dad (Compared To A Stay-At-Home-Mom) appeared first on DollarsAndSense.sg.
