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Why Become a Singapore Citizen?

For those who have obtained a Permanent Resident (PR) status in Singapore, the next natural step would be to convert their PR into a Singaporean Citizenship (SC). A PR provides a person with clear advantages over a foreign citizen, but having citizenship takes these benefits a step further.

Those benefits range from bigger subsidies for starting a family and paying almost nothing for healthcare and education, to better terms on purchasing property from the government. Another substantial benefit is the Singaporean passport, which enables the holder to travel to 189 countries without a visa. Also, only Citizens of Singapore can vote or be elected for  public office in the country. However, this is just the start.

To apply for Citizenship, one needs to spend 2 years living in Singapore as a PR. To find out how to obtain a passport, here is the guide.

Accommodation and purchase of property

Citizens are entitled to additional benefits and opportunities when it comes to renting or buying a property in Singapore. Only Citizens are allowed to purchase new residential properties form the Housing & Development Board (HDB), the national public housing provider that is responsible for a major part of urban development.

A PR would only be able to purchase a pre-owned flat from HDB, and only if he/she has a family that would be moving in. Only Citizens can rent a HDB subsidized flat. Additionally, Citizens are able to purchase any type of property, provided they comply with a list of requirements, while PRs would need to first obtain approval from the Ministry of Law to purchase property with land.

The government also imposed 2 quota policies that property buyers need to satisfy, the Ethnic Integration Policy (EIP) and Singapore Permanent Resident (SPR). Naturally, by being a Citizen, the perspective buyers would not have to comply with SPR and thus speed up the purchase process.

It is also more beneficial to be a Citizen from the financial point of view since HDB offers several subsidies and grants to fund the purchase of property. First-time home buyers receive even greater benefits by getting a priority allocation and a grant that covers the purchase of a flat and is capped at S$80,000, depending on a person’s monthly income.

Healthcare

The public healthcare system in Singapore is not free to use. However, the government helps people to pay their healthcare bills through subsidies and discount schemes, with the exact reduction amount depending on the legal status of the patient.

The subsidies are distributed through insurance programs. All Singaporean Citizens and PRs have an option to sign up for a healthcare insurance scheme called Medishield Life or a variety of other plans developed by the Ministry of Health that cover special cases. There are several insurance plans available, starting from basic coverage and ending with a private hospital plan. Regardless of their insurance plan, Citizens pay 10% less for medical services provided by the public sector in comparison to PRs.

Families with low-middle income receive additional subsidies and benefits in the form of a Community Health Assist Scheme (CHAS) scheme. Any Citizen with a household income below S$1,200 per person can apply for subsidies to cover different medical treatments. Moreover, Citizens benefit from the regular Primary Care Partnership Scheme (PCPS) that allows Citizens with chronic diseases easier access to healthcare. Recently it became a law that anyone over 40 years of age and with income under S$1,500 per month can be treated under the PCPS scheme.

Citizens also benefit from the Infant Care Subsidy scheme that helps to cover their children's healthcare expenses. Families with children over 2 months old receive a monthly subsidy of S$600 per child. When a child reaches the age of 1.5 years, the total amount is reduced to S$300 a month. The financial support continues until the child's 7th birthday, and is capped at S$30,000 for a working parent with a basic level subsidy.

Parenting

A great number of benefits are offered to Citizens that become parents as the country has been experiencing a drastic fall in the birth rate recently. For example, Citizens of Singapore enjoy large tax rebates for parenthood that start frоm S$5,000 per year.

Big families also receive cash gifts of S$6,000 for the first two children and S$8,000 for the subsequent ones under the Baby Bonus Scheme. The government will also contribute 1:1 towards the savings account for a child called the Child Development Account (CDA) until a cap of S$3000 is reached.

By law maternity leave for Citizens is 16 weeks long and is partially paid by the government with the aid package being capped at S$20,000. If neither the mother nor the child are Citizens, the government provides no monetary aid and the terms of the maternity leave are determined by the employment contract.

Parents of a child who is a Singaporean Citizen are entitled to 6 days of child/infant leave each, partly subsidized by the government, up to S$500 per day.

Working mothers and grandparents that are Citizens may also apply for additional grants from the government due to the Working Mother’s Child Relief (WMCR) and Grandparent Caregiver Relief (GCR) schemes. PRs are not eligible for these benefits.

Education for children

In comparison to PRs, Singapore Citizens are eligible for extensive discounts on school education due to a system called Edusave. Under the scheme, Citizens receive annual contributions for each child to cover the cost of education, ranging between S$250-290.

The primary and secondary education in Singapore is not free: school fees for Citizens can start from S$13 per month. PR’s would have to pay S$193 per month for their child to attend the same school. However, fees among schools vary.

When it comes to universities, there is a huge difference between annual tuition for Citizens and PRs. For example, Singapore Management University have set their fees at S$11,450 for a Citizen and S$16,000 for a PR.

Pensions

After living in the country for more than 2 years, PRs have to start paying the full amount into the Central Provident Fund (CPF), contributions which are deducted on a monthly basis from the salary. It is more beneficial to become a Citizen in order to make use of all the subsidies and grants that are provided exclusively to Singapore nationals.

The CPF contribution rates for Citizens are fixed at 17% for the employer and 20% for the employee until the latter becomes 55 years old. Once a Citizen is 55 years old, the contribution rates decrease slightly every five years until the worker reaches the age of 65. Then the rate freezes at 7.5% for employers and 5% for employees.

On the day of their 55th birthday, Singapore citizens gain access to their Retirement Account and the ability to withdraw their savings.

Money paid as CPF contribution is set aside by the government into a separate account and  is paid out monthly once a Citizen reaches retirement age, currently set at 65.

The government offers 3 different retirement plans, where higher monthly deductions from the salary guarantee bigger payouts in the future.  Income over S$6,000 per month will not be taxed. However, any Citizen can also choose to pay more than the contribution limit in order to secure bigger monthly retirement payouts.

Potential Drawbacks

Singapore Citizens are not allowed to hold dual Citizenship with other countries. Hence it is  necessary to visit the local consulate of one’s home country and renounce their nationality. The process of renunciation can be lengthy and bureaucratic and entails giving up all the benefits and protection rights provided by one’s country of origin.

Also, National Service (NS) is compulsory for any Citizen and second generation male PRs once they reach 18 years of age. Men will have to initially register at 16.5 years of age with Central Manpower Base (CMPB) and following the compulsory 2 year stint, will have to serve 40 days per year in the Operationally Ready National Service (ORNS) until the age of 50 (for officers) and 40 (for all other ranks).

When you decide to move to Singapore, you may want to start a business there. Let our professional accountants do your numbers and file your reports so you will forget the burdens of paperwork.

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