infantThis article is about Market Failure and Government Intervention.

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SINGAPORE: From April, 120,000 households with young children will benefit from a new subsidy framework aimed at making childcare and infant care more affordable.

Acting Minister for Social and Family Development Chan Chun Sing announced the new framework after a visit to YWCA Child Development Centre on Wednesday.

All parents will continue to receive a basic subsidy of S$300 a month for childcare and S$600 for infant care services.

Families with a gross monthly income of S$7,500 and below will receive an additional subsidy.

Eligible families using full-day programmes will see an increase in their current child care subsidies of at least S$100 and infant care subsidies of at least S$200, with lower-income families receiving more.

The final maximum total subsidy could be as high as S$740 for full-day childcare, and S$1,140 for full day infant care programmes. However, they are subject to a minimum co-payment sum that parents must pay out-of-pocket.

For example, a lower-income household with a monthly income of S$2,500 and below will get an extra S$440 for a basic full-day childcare programme. This will bring its total subsidy to S$740, subject to a minimum co-payment by parents.

The additional subsidy will replace the Centre-Based Financial Assistance Scheme for Child Care (CFAC), which provides child care-related financial assistance for families earning S$3,500 and below.

Up to two-thirds of households will benefit.