Working Mother's Child Relief

Mr Hri Kumar Nair asked the Deputy Prime Minister and Minister for Finance (a) what is the rationale for withdrawing the Working Mother's Child Relief for a working mother in respect of her son who has to disrupt his studies to enlist for National Service; and (b) whether the Ministry would consider granting tax relief for working mothers whose sons enlist for National Service.

Mrs Josephine Teo:

(for the Deputy Prime Minister and Minister for Finance): Mr Speaker, Sir, I thank Mr Hri Kumar Nair for his question. The Working Mother's Child Relief (WMCR) is a gesture to recognise the efforts of working women in looking after their children. One of the eligibility criteria for the relief is that the child must be financially dependent. A dependent child is one who does not have more than $4,000 of annual income.

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It is unrelated to National Service (NS) – whether serving NS, or working, or studying in an education institution whilst working part-time; a child who has income above $4,000 a year will not qualify as a dependant for the purpose of claiming the relief. In fact, the income threshold for the relief was only recently raised from $2,000 to $4,000 in Year of Assessment 2010. My Ministry will review the income threshold from time to time.

Mr Hri Kumar Nair: Sir, a supplementary question. I thank the Minister of State for her answer. I understand the purpose and logic of the relief. The problem is that the relief is up to $10,000 for working mothers and a man who enters into National Service earns about $4,000 or so. So the upshot is that a working mother is financially worse off if her son disrupts his studies and enters National Service. While I understand the logic of the relief, there is some inequity because, certainly, the relief is still available if the working mother has a daughter. So will there be some sort of relief to address that inequity?

Mrs Josephine Teo: Mr Speaker, Sir, it really depends on what the daughter is doing. In fact, if the daughter is also working part-time, which many young ladies do right now, the mother will also not qualify for the relief.

Mr Hri Kumar Nair: Sir, let me then give a specific example. Many of our male children disrupt their studies to go to National Service while many of our female students go on to do tertiary education. Their circumstances do apply to many. The working mother with a daughter will continue to enjoy the tax relief but not the working mother with a son. And that was the inequity that I was referring to.

Mrs Josephine Teo: When the National Serviceman completes his National Service, or his disruption, and returns to school, if his income falls below $4,000 – the threshold – the mother will qualify for the Working Mother's Child Relief, as long as he is the dependant. I am not sure what else the Member is interested in finding out. Perhaps I can take it offline with him.

Mr Speaker: Mr Hri Kumar, last question.

Mr Hri Kumar Nair: Thank you, Mr Speaker. One final attempt. Perhaps, I am mistaken because it is relief intended to cover children. The working mother will not be entitled to relief once the child hits 21 or becomes an adult. And in may cases, once the male child finishes or completes his NS, there will be a very short time before he becomes an adult and his mother will no longer be entitled to that relief.

Mrs Josephine Teo: I am sorry. What was your question was?

Mr Hri Kumar Nair: Will the Ministry address that inequity?

Mrs Josephine Teo: Mr Nair, we will certainly look at it and if there is good reason for us to review and adjust, we will certainly do so.