Caring for one’s aging parents or grandparents can be financially draining. Fortunately for Singapore taxpayers who do so, the Singaporean government has introduced tax reliefs known as Parent Relief and Handicapped Parent Relief to make this task easier for them.
Parent Relief and Handicapped Parent Relief are tax reliefs granted to individuals who are supporting their parents, grandparents, parents-in-law, or grandparents-in-law in Singapore. These reliefs were introduced to encourage Singapore’s taxpayers to be more willing to give financial support to aging parents or grandparents.
Criteria to Claim the Reliefs
The following criteria must be fulfilled in order for an individual to claim Parent Relief or Handicapped Parent Relief: the dependant must have been living in Singapore during the previous year of assessment (YA), the dependant must have been living in the individual’s household, the dependant must have been either a minimum of 55 years old or either physically or mentally disabled during the previous YA, and the dependant did not have an annual income exceeding S$4,000 during the previous YA.
Singaporean tax laws define the phrase “living in Singapore” as being applicable to one who permanently lives in Singapore except for short absences. Foreign dependants are usually considered to live in Singapore if they stay there for at least eight months of a YA.
If the dependant had been living in the individual’s household during the previous YA, the individual must have spent a minimum of S$2,000 to care for the dependant in order to be eligible for any of the relevant tax reliefs.
“Annual income” may refer to any of the following: taxable income, including trade, employment, rental, and SRS withdrawals; tax-exempt income, including bank interest, dividends, and pensions; and all foreign-sourced income, regardless of the location of the income’s source or whether the income has been remitted to Singapore.
Parent Relief is worth S$5,500 if the taxpayer does not stay with the dependant and S$9,000 if the taxpayer does. Handicapped Parent Relief is worth S$10,000 if the taxpayer does not stay with the dependant and S$14,000 if the taxpayer does. These figures were introduced for YA 2015; all are increases from the prior amounts of S$4,500, S$7,000, S$8,000, and S$11,000 respectively.
Further Information on the Reliefs
Starting from YA 2015, Parent Relief and Handicapped Parent Relief may be shared with other claimants if nobody else is claiming any other relief, with the exception of Grandparent Caregiver Relief, with regard to the same dependant. This applies to individuals who are supporting the same dependant. In such cases, the relief that can be claimed will be shared between the claimants. How this relief will be divided is left to the claimants’ discretion.
Parent Relief and Handicapped Parent Relief may be simultaneously claimed on the same dependant. These reliefs may also be claimed for up to two dependants. Hence, if a person who is supporting both parents and parents-in-law claims the reliefs for the parents, this person is not allowed to claim any reliefs for the parents-in-law.
If the dependant died during the previous YA, the full amount of any of the relevant tax reliefs may be claimed should all the criteria to claim them have been fulfilled.
Parent Relief and Handicapped Parent Relief may be claimed by using e-Filing or paper filing. Those claiming Handicapped Parent Relief for the first time must also complete and submit the Handicapped-Related Tax Relief form via email.