Ms Lee Li Lian
Punggol East SMC
To ask the Minister for Social and Family Development
(a) why there has been an increase in the number of children without the Child Development Account (CDA) from 2,600 children for the 2001-2005 birth cohort to 11,600 for the 2006-2011 birth cohort;
(b) what are the reasons for only 48% of CDAs in the 2006-2011 birth cohort saving up to the maximum co-savings cap while only 10% fully utilised the CDA; and
(c) what is the breakdown according to household income of those children without CDA and those who have reached the maximum co-savings cap for the 2006-2011 birth cohort.
For the 2001 to 2005 birth cohorts, parents had 6 years to open and save in the CDAs. About 3% (or 2,600) of the children do not have CDAs. For the 2006-20131
birth cohorts, so far 5% (or 11,600) of the children do not have CDAs. As parents now have 12 years to open CDAs, we expect this percentage to fall over time. Similarly, we expect the percentage of parents who save to the CDA co-savings cap to increase over time.
The approved uses for CDA funds were expanded in 2012. Parents may choose to use the funds to pay for educational and healthcare expenses within the 12 years, or save for post-secondary education2
. As there is a longer period and more approved uses, we expect the utilisation for the 2006-20131
birth cohorts to increase over time.
MSF does not track the longitudinal household income changes of the families who open CDA accounts. We are thus unable to provide the proportion by household income of those who have yet to open their CDA accounts or those who have reached the maximum co-savings cap for the 2006-2013 birth cohorts.
With reference to our written reply to Ms Lee Li Lian’s (Question 27 of Parliament Report, 7 July 2014), 11,600 children in the 2006-2013 (instead of 2006-2011) birth cohorts are without CDAs. In the same reply, 48% of the first and second child in the 2006-2013 (instead of 2006-2011) birth cohorts have saved to the maximum co-savings cap, out of which 10% of these children have fully utilised the CDA funds.
In the year when the child is 13 years old, his/her CDA will be closed and unused funds will be transferred to a Post-Secondary Education Account (PSEA) under MOE to pay for post-secondary education fees.