A beneficial policy for Stay-at-home Parents

NOTE: I had published this article on 9 Dec 2014 but it was deleted for some reason (or has gone missing *play mysterious music*). Just reposting.

Remembering some of the initial exchanges about this post, I would like to preface this by saying that the purpose of this policy suggestion isn’t to give out “goodies” per se in the vain hope that it will encourage people to have more kids, but to bring Stay-At-Home Parenting to the same “value” as “working” parents, at least in the eyes of our G policy.

There would also be the effect of encouraging parents of young children to have MORE children, since I believe that it is nigh impossible to convince those who plan to have no children to have children, but it is far easier to encourage parents of one or more children to have another.

I also see this as congruent with:

1) Our aim to improve TFR

2) Our principle of equitable benefits that accrue to all our children (even those whole parents choose to care for them at home)

3) That the scope and effort to care for a child at home is by no means less than the work of a domestic worker (who is considered employed), or a childcare teacher (who is considered employed)

4) The concept that parents are the most preferred primary caregivers for a child

Stay-at-home parental benefits are one of the things that Nee Soon GRC MP Patrick Tay has been trying to work on, although many other policy issues overshadow it. Some of these are, in part, developed from conversations on his FB account and elsewhere. Here’s the policy I’m suggesting:

A parent is considered a stay-at-home parent when:

  • He or she has a child under the age of 2 (or 3 – this can be implemented first and then increased later)
  • He or she is not employed for more than 56 hours per month
  • His or her family unit does not employ a FDW (other than to care for an elderly or disabled person in the household)
  • Both parents cannot claim this benefit simultaneously (maximum of one stay-at-home parent per household)

The benefits:

  • They are classified as working for the computation of eligibility for any other government benefits. This includes maternity leave (can be encashed at fixed rate) for those who have a second child before their first turns two
  • They receive $145 each month (cash equivalent of the Enhanced Foreign Domestic Worker Levy Concession)
  • They receive an annual contribution into their CPF equivalent to 1 week of pay (based on their last drawn monthly salary, capped at $10,000) to help them with their retirement planning. This offsets the Childcare Leave and both cannot be claimed simultaneously for the same period
  • Their other children receive a $300 subsidy for kindergarten (not childcare) fees during this time
  • A stay-at-home parent’s MC can be used for their spouse to take medical leave (but no change in total statutory entitlement)
  • Comprehensive job placement services for when they return to the workforce

Costs

My estimate that the cost to fund this will be based on the following assumptions:

 

  • 2 years’ worth of benefits
  • 40,000 Singaporean children born per year
  • Assume 50% of parents choose to stay at home (this is quite high)
  • Assume average of 2 children per family and that the elder child will benefit from the kindergarten subsidy (50%, this is also quite high)
  • Average personal income of $4,000 (also above the national average)

 

CPF contribution cost $40,000,000/year

FDW levy encashment cost $69,600,000/year

Childcare subsidy cost $72,000,000/year

 

That’s $181.6 million per year. Add to that the cost of job placement and administration and miscellaneous costs… Maybe $250 million a year? In comparison, the G is already spending $1.6 billion on the Baby Bonus scheme.

 

Hidden costs include potentially lower workforce participation in the short run, but not significant (less than 20,000 expected to take up scheme in total each year).

 

Is a policy like this worth $250 million a year? Let’s think about socioeconomic benefits:

 

  • Increased reemployment after child reaches 2 years old
  • Increase TFR (priceless! OK, fine, you economists go figure this one out J)
  • More respect and recognition for the duty of parenting
  • More appreciation for the work of FDWs, childcare teachers and other caregivers
  • Incentive to develop flexi-work or home-based work to tap on stay-at-home parents

 

I’m sure I’m missing part of the picture here – what costs and benefits am I missing out on? Of course, this policy needs to be made more congruent with other policies, but I’ll leave the nitty gritty out for now.

 

 

 

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