HAVING children is a personal choice that entails personal sacrifices. But financial incentives and friendly work-life measures do help to make parenting a more enjoyable experience.

Marriage and parenthood have been perennial topics highlighted during the annual National Day Rally speeches.

This is not unexpected considering that Singapore's fertility rate of 1.29 is one of the lowest in the world. The replacement rate should be 2.1.

In 2004, a slew of enhanced baby incentives was introduced.

Among the couples who have benefited from the measures are Mr Jason Loo, 38, and his wife Lek Li Li, in her mid-30s. They have two children - Ian, two, and Shannon, six months.

'The incentives at the moment are the best Singapore has ever seen,' said Mr Loo.

Here are some of the incentives they enjoy.

The Baby Bonus Scheme

First introduced in April 2001 and enhanced in August 2004, it helps to lighten the financial burden of raising kids.

• Cash gifts:

You will get a cash gift of $3,000 for each first and second child, and $6,000 for each third and fourth child.

• Dollar-for-dollar matching programme:

In addition, your second to fourth children will enjoy government contributions in the form of a dollar-for-dollar match with the amount of savings you contribute to the child's Children Development Account (CDA).

This is a special savings account that you open at any OCBC Bank or Standard Chartered Bank (Stanchart) branch for your child. You can save in the CDA up to Dec 31 of the year in which the child turns six. The savings will be matched up to a cap of $6,000 for the second child and $12,000 each for the third and fourth child.

CDA savings may be used to pay fees for all your children who are attending approved institutions, including childcare centres and kindergartens.

They can also be used to buy MediShield or Medisave-approved private integrated plans and pay for all your children's medical-related expenses. These include consultation fees, treatment fees and prescription costs incurred at health- care institutions.

Tax reliefs

• Parenthood tax rebate

A one-off rebate, it may be used to offset your income tax and/or your spouse's, based on the apportionment agreed between the two of you.

Any non-utilised rebate will be used to offset the income tax payable for subsequent years, until the rebate is fully utilised.

The rebates for the second, third and fourth child are $10,000, $20,000 and $20,000, respectively.

Among other conditions, you may claim this relief if you are a Singapore tax resident who has a legitimate second, third or fourth child born to your family on or after Jan 1, 2004.

• Grandparent caregiver relief

You may claim this relief of $3,000 on one of your or your spouse's or ex-spouse's parent or grandparent.

One of the conditions that must be satisfied is that the child whom the parent or grandparent is looking after should be a Singapore citizen, and is 12 or younger in the previous year.

It is also required that the parent or grandparent has not carried on any business or employment in the previous year.

You cannot claim this relief if someone else has already claimed it on the same parent or grandparent.

• Qualifying child relief

You can claim this relief up to a maximum of four children, of which the fourth child should be born on or after Jan 1, 1988. It is computed as $2,000 per child or $3,500 for a handicapped child. However, the maximum of this relief coupled with the working mother's child relief (see below) should not exceed $25,000 per child.

If the total amount is more than $25,000, the child relief will be allowed first, and the working mother's child relief will be limited to the balance.

If you are a working mother and satisfy all conditions under the working mother's child relief, you may claim both the qualifying child relief and working mother's child relief on the same child.

• Working mother's child relief

The amount of relief you will receive depends on the order of your children, as follows:

First child - 5 per cent of mother's earned income;

Second child - 5 per cent of mother's earned income;

Third child - 20 per cent of mother's earned income;

Fourth child born in or after 1987 (excludes child adopted before Jan 1, 2004) - 25 per cent of mother's earned income.

The maximum of the qualifying child relief coupled with the working mother's child relief should not exceed $25,000 per child.

You can claim up to a maximum of four children.

This relief was introduced from Year of Assessment 2005 to reward families with children holding Singapore citizenship and encourage married women to remain in the workforce after giving birth.

Single or male taxpayers are not eligible.

• Foreign maid levy relief

You can claim twice the total foreign domestic worker levy paid in the previous year, on one foreign maid. This is regardless of whether your husband has paid the levy.

For Year of Assessment 2008, you may claim up to a maximum of:

$6,720 , ($295 per month x 6 months x 2) + ($265 per month x 6 months x2), OR

$4,440 ($200 month x 6 months x2) + ($170 per month x 6 months x2)

This relief aims to encourage married women to remain in the workforce after having children and to encourage procreation.

Single or male taxpayers are not eligible.

You may only claim this relief if, in the previous year, you have been married and were living with your husband, or a married woman and your husband was not a resident in Singapore.

Women who are separated, divorced or widowed and have children who have lived with them and on whom they could claim child relief, also qualify.

This relief can only be used to offset against your earned income.

lorna@sph.com.sg