I refer to the article “1.57 million Singaporeans to receive $1.2 billion in GST vouchers and Medisave top-ups” (Straits Times, Jun 27).

It states that “Some 1.57 million eligible Singaporeans will receive notifications on their GST voucher (GSTV) and Medisave top-ups in 2017, the Ministry of Finance (MOF) said on Tuesday (June 27).

This year’s vouchers and top-ups will cost the Government $1.2 billion.

About 1.37 million Singaporeans will get up to $500 in GSTV – Cash, which comprises up to $300 in August and a one-off special payment in November.”

Help pay GST?

We should keep in mind that I believe the original purpose of the GST offset scheme was to help particularly lower-income families pay for the GST when it was introduced.

For example, even a lower-income family of say two adults and two children, spending just $1,200 a month, would incur GST of $1.008 ($1,200 x 12 x 7 per cent) a year.

So, the maximum GST Voucher cash payment of $1,000 ($500 x 2 adults whose individual assessible income is less than $26,000, in this example), may only just cover the GST that they incur.

In a sense, those who spend more than $1,200 a month – may not get enough to offset their GST.

More help for lower-income in 2007?

When the GST rate was raised from 5% to 7% in July 2007, a household in the bottom 20% had to pay additional GST of $370 per year, but received an offset package of $910 per year, in addition to permanent benefits of $1,000 per year. (“Budget debate round-up speech“, Mar 2, 2011)

Less help now?

It’s GST Cash of up to a maximum of $500 per adult now.”

As to “As for Medisave top-ups, some 450,000 Singaporeans aged 65 years and above are eligible to receive them” – why is the age now at 65, when it was 57 previously?

Also, the Medisave top-up can only be used for medical purposes and insurance premiums, and is thus not cash that can effectively offset GST expenditure.

So, after adjusting for inflation since 2007, are lower-income families arguably, effectively getting less now under the GST Voucher scheme, compared to the previous GST Offset Package?

2.1m dereased to 1.37m – get GST Cash voucher now?

In 2012, the media reported that 2.1 million Singaporeans would get GST vouchers (“2.1 million Singaporeans to receive GST Vouchers”, Asiaone, Jun 30, 2012).

So, why has the number getting GST Cash vouchers apparently decreased by 730,000 (2.1 million – 1.37 million) Singaporeans to 1.37 million now?

Leong Sze Hian

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