Lifetime Taxes and Benefits for Singaporeans (Budget 2012)

Two parents and two children in a two-room HDB flat, with a combined income of $1,200 a month, excluding employer CPF contributions

TAXES $113,000
In the form of GST, water conservation tax and other taxes over a lifetime

BENEFITS $535,000
In Baby Bonus, housing grants and other subsidies and bursaries over a lifetime.

How 2-room households get $5 for every $1 tax
Tharman gives clear idea of benefits to the low-income

TO GET back nearly five dollars in government benefits for every one dollar paid in taxes over a lifetime, a person should be part of a four-member family living in a two-room Housing Board flat.

The household of two parents and two children should also have a combined income of $1,200 a month, excluding employer contributions to the person’s Central Provident Fund (CPF) account.

These were the broad assumptions that the Finance Ministry made in the illustration it used when asserting that low-income Singaporeans receive more in government transfers than they pay in taxes.

It is the most detailed of several illustrations that Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam gave yesterday in a written reply to Mr Pritam Singh (Aljunied GRC).

Mr Singh had asked for the assumptions, variables and projections underlying the ministry’s calculations of lifetime benefits and taxes for low- and middle-income households, shown on the website for Budget 2012.

Mr Tharman also gave examples of low-income households in three-room flats, showing the amounts they would receive with and without nursing home subsidies or the Silver Housing Bonus of $20,000 for eligible elderly flat owners who downgrade to a smaller flat.

Similar calculations were done for the two-room households.

Based on these examples, a low-income household can expect to receive $3.97 to $5.10 in benefits for every tax dollar paid.

Last month, Mr Tharman said at the conclusion of the Budget debate that government transfers to families in the bottom 20 per cent in the last five years had amounted to almost 20 per cent of the household income per household member.

But in the illustrative two-room household, the family can expect more in a lifetime.

Based on today’s prices, retirement age and life expectancy, the household pays $113,000 in taxes, such as GST and water conservation tax, over a lifetime.

But it can expect to receive $535,000 in real terms, through cash, subsidies, permanent transfers, CPF top-ups, housing grants and the like.

The $535,000 is paid out through a range of transfers, including the Baby Bonus, ComCare aid for the needy, Workfare Income Supplement, housing grants, Medifund subsidies and education bursaries.

At the middle-income level, a household with a monthly income of $5,600 that owns a car and takes up the Silver Housing Bonus later in life stands to get 87 cents in benefits for every tax dollar paid.

A comparable family without a car can more than break even with $1.88 in benefits for every dollar of tax paid.

Full details of these examples can be found at

Published on Apr 10, 2012 – The Straits Times
By Phua Mei Pin

compiled  by  Fabrications About The PAP  ~ Lifetime Taxes and Benefits for Singaporeans (Budget 2012)

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