GROWTH DIVIDENDS

GROWTH DIVIDENDS: * * *

4.

Mr Siew Kum Hong asked the Minister for Finance in view of the $407 million of Growth Dividends paid out on 30th April 2008, how much, in absolute figures and as a percentage of the total, was received by each decile of households in Singapore as arranged by household income.

Mr Tharman Shanmugaratnam: The estimated amount of first instalment of Growth Dividends received by each decile of households on 30th April 2008 is in Table 1.

Column: 2791

Table 1: Estimated amount of first instalment of Growth Dividends (GD):

received by:

households by deciles of household income from work per household member: Decile

|

1st - 10th

|

11th - 20th

|

21st - 30th

|

31st - 40th

|

41st - 50th

|

51st - 60th

|

61st - 70th

|

71st - 80th

|

81st - 90th

|

91st - 100th

---|---|---|---|---|---|---|---|---|---|---

Average GD per household member

|

$195

|

$140

|

$135

|

$130

|

$130

|

$125

|

$125

|

$110

|

$105

|

$80

Average GD per household

|

$365

|

$460

|

$450

|

$445

|

$455

|

$435

|

$415

|

$360

|

$305

|

$195

% GD received by households in decile

|

9%

|

12%

|

12%

|

11%

|

12%

|

11%

|

11%

|

9%

|

8%

|

5%

Note : Eligibility for Growth Dividends and amount received were estimated based on the latest available data on resident household profile in 2007. Only Singapore citizens aged 21 and above were eligible. Older citizens received more.

Households in the lower deciles received a larger absolute amount of Growth Dividends than those in the higher deciles, except households in the lowest decile which have on average one third fewer persons compared to other households 1 . On an individual basis, members in these households received the most. The average amount received per household member declined steadily from the lowest to the highest household income deciles.

In observing the progressivity of benefits such as the Growth Dividends, it is important to note that household income on its own does not provide the best indication of a household's economic status. For instance, households which include retirees may fall within the lower income deciles where the households earn little or no income, but they may have accumulated more wealth than others. This is why in determining the amount of Growth Dividends each individual should receive, we have used both the Annual Income (AI) of the individual and the Annual Value (AV) of his home, which is a proxy for the individual's wealth.

Besides the Growth Dividends, households will also receive other benefits in 2008, including the 2008 payment of the GST Credits and Senior Citizens' Bonuses, Utilities-Save rebates, Service and Conservancy Charges rebates, rental rebates, top-ups to the Post-Secondary Education Accounts for students and CPF Medisave top-ups for the elderly. These benefits have been designed to provide more help to lower and middle-income households.

1 The average household size for households in the lowest decile is 2.3 compared to the average of 3.5 for all households.

Column: 2793