Singapore Budget 2026: Highlights, Summary, Benefits, and Key Takeaways

Singapore Budget 2026 announced on 12^th February by Prime Minister Lawrence Wong Total Budget: S$154.7 billion. Budget 2026 marks Singapore's strategic response to an increasingly uncertain global environment, focusing on three key pillars: advancing economic competitiveness through AI adoption, building workforce resilience, and strengthening social support for families and seniors. 

Key Takeaways

• The biggest day to day benefits come through one-off cash support, CDC vouchers, and U-Save rebates, with clear eligibility thresholds and defined payout windows.
• Families gain meaningful affordability relief through higher subsidy thresholds for preschool and student care, but the changes only start from January 2027.
• Seniors with lower CPF retirement savings receive a tiered CPF top-up credited in December 2026, linked to property Annual Value and property ownership.
• Businesses get broad support via a Corporate Income Tax rebate and cash grant, but at reduced levels versus Budget 2025, and with a local employee condition.
• Wage cost pressure is addressed through an enhanced PWCS in 2026 and extended support through 2028, alongside higher wage floors and labour policy tightening.

Singapore Budget 2026 Key Highlights

For a complete breakdown of the announcements, policy changes, and detailed financial allocations, we highly recommend reviewing the official document: Download Budget Statement PDF (472 KB)

Household Benefits in Budget 2026

Singapore Budget 2026’s household support can be understood as immediate relief and life-stage affordability support.

Cost-of-Living Special Payment (September 2026)

This one-off cash support is designed to ease immediate cost pressure for Singaporeans, especially for essentials that cannot be deferred such as groceries, transport, and household bills. It strengthens short-term cash flow in a year where many families feel spending fatigue from sustained price increases.

Eligibility conditions

• You must be aged 21 and above in 2026 and residing in Singapore.
• You must own no more than one property.
• Your Assessable Income must be up to $100,000, based on YA 2025 (income earned in 2024).

How much you receive (AI and Annual Value based tiers)

The payment quantum depends on your Assessable Income and the Annual Value (AV) of your residence.

Note: Values are in Singapore dollars and reflect the one-off payment tiers.

Impact: For most eligible adults, this is best treated as a one-time offset against current year essentials, not a recurring income stream. Its value is highest for households facing elevated daily costs but still below the $100,000 AI cap.

CDC Vouchers (January 2027)

CDC vouchers remain one of the most directly usable benefits because they can offset routine spending without an application step. Households get S$500 in CDC Vouchers to reduce spending on meals and groceries while supporting heartland merchants and supermarkets. 

What you get

• Every Singaporean household receives $500 in CDC vouchers.
• The voucher value is split equally for spending at participating hawkers or heartland merchants and at supermarkets.
• Vouchers are disbursed in January 2027 and valid until 31 December 2027.

Why this matters day to day

This measure works like an immediate consumption subsidy. It reduces cash outflow on essentials and makes inflation feel less sharp at the household level, especially for groceries and daily meals.

U-Save rebates for FY2026 (credited from April 2026)

U-Save is designed as a utilities bill cushion that reaches eligible HDB households automatically. Eligible HDB households receive enhanced U-Save rebates of up to S$570 to reduce utilities bills across the year. This benefit directly cuts recurring electricity, gas, and water costs, helping households manage fixed monthly expenses and cushion energy-related price increases.

Core eligibility rule

• Eligible Singaporean households living in HDB flats, where household members do not own more than one property.

Why FY2026 is different

Budget 2026 provides 1.5 times the amount of regular GST Voucher U-Save in FY2026, and explicitly positions it as cushioning the impact of the carbon tax increase to $45 per tonne of CO2e from 2026.

How much you get and when it is credited

The total value depends on your HDB flat type, and credits happen in defined tranches.

Note: Each April and July tranche includes both regular U-Save and Budget 2026 U-Save.

Child LifeSG Credits (July 2026)

Families with eligible Singaporean children aged 12 and below receive S$500 in Child LifeSG Credits to offset everyday child-related expenses. 

Who is eligible: Each Singaporean child aged 12 and below in 2026.

How to think about its benefit: This is most impactful for families with multiple children, because it scales per child. It also works best when treated as a planned offset for education, enrichment, or recurring child-related costs rather than ad hoc spending.

Family Affordability: New Subsidy Thresholds and Mobility Support

Budget 2026 leans into easing cost pressures at key life stages, especially childcare and student care.

Preschool subsidies: Higher income cap from January 2027

A major structural change is the increase in the household income cap for preschool subsidies.

What changes: Preschool income cap moves from $12,000 to $15,000, effective January 2027.

Student Care Fee Assistance: Threshold increase from January 2027

Student care is another recurring cost centre for working families, especially those with limited caregiving support.

What changes: Student Care Fee Assistance household income threshold rises from $6,000 to $6,500, effective January 2027.

Important timing implication: A key criticism is that this relief starts only in 2027, meaning families just above the earlier thresholds may still face another year of high costs before the new caps take effect.

ComLink+ support: Enhanced payouts from Q3 2026 onwards

Lower-income ComLink+ families get enhanced support from Q3 2026, including quarterly payouts such as S$500 (cash plus CPF) for eligible households. While some family measures take effect later, enhanced ComLink+ payouts begin earlier within 2026.

Practical perspective

This measure is designed to support upward mobility for lower-income families, but its real-world impact depends on sustained engagement and how well complementary employment and family support services translate into stable income improvements.

Retirement and Senior Support

Budget 2026 includes both direct retirement top-ups and structural CPF contribution changes for senior workers.

Budget 2026 CPF Top-Up 

Eligible seniors receive a one-time CPF top-up of up to S$1,500 to strengthen retirement adequacy. It supports those with lower CPF balances, improving long-term payout security and helping seniors manage rising living and healthcare costs with greater financial confidence.

Who qualifies

You qualify if you are born in 1976 or earlier and meet all of the following:

• CPF retirement savings below the 2026 Basic Retirement Sum (BRS) of $110,200 as at 31 December 2025
• Live in a residence with Annual Value (AV) of $31,000 and below as at 31 December 2025
• Own not more than one property as at 31 December 2025

How much you receive

The CPF top-up is tiered by CPF retirement savings level and residence AV.

Note: CPF retirement savings is based on RA and CPF LIFE balances, or OA and SA balances if RA has not been created.

CPF contribution rate increase

From 1 January 2027, CPF contribution rates increase for workers aged 55 to 65, raising retirement and healthcare savings through higher employer and employee contributions. This strengthens retirement adequacy for mature workers and supports longer working lives as Singapore’s population ages.

Key changes

• Contribution increases apply from 1 January 2027 for age bands above 55 to 60 and above 60 to 65.
• The increase is fully allocated to the CPF Retirement Account (RA), supporting retirement adequacy.

Employer CPF Transition Offset

• Government provides a one-year CPF Transition Offset in 2027.
• It is equivalent to half of the 2027 increase in employer CPF contribution rates for each Singaporean and PR worker aged above 55 to 65.
• Offset is automatic, no application required.

CPF contribution rates from 1 January 2027 (selected age bands)

Note: Percentage point increases shown in the source reflect changes versus rates as of 1 January 2026.

Business Benefits: Rebates, Grants, and Capability Support

Budget 2026’s enterprise package mixes broad tax relief with targeted incentives that reward firms that invest in capability, internationalisation, productivity, and workforce uplift.

Corporate Income Tax Rebate and Cash Grant (YA 2026)

Companies get a 40% Corporate Income Tax rebate for YA 2026, capped at S$30,000, to ease cost pressures and improve business cash flow. A minimum S$1,500 benefit supports smaller firms, freeing funds for operations, investment, or hiring.

What you get in Budget 2026

• 40% Corporate Income Tax rebate for YA 2026
• Minimum benefit of $1,500
• Total cap of $30,000

Condition that matters

• Firms must meet the local employee condition, including at least one local employee employed in 2025.

Previous Budget vs Budget 2026 (comparison)

Progressive Wage Credit Scheme (PWCS)

PWCS is extended to 2028, with Government co-funding at 30% for 2026–2027 and 20% for 2028, helping employers manage wage increases. This supports real wage growth for lower-wage workers while reducing cost shocks for businesses.

What changes for qualifying year 2026

• Co-funding support for wage increases given in qualifying year 2026 increases to 30%.
• It applies to wage increases given in qualifying year 2025 that are sustained in 2026 as well.

Extension timeline: PWCS is extended to wage increases given in 2027 and 2028, with payout periods in 1Q 2028 and 1Q 2029 respectively.

Minimum qualifying wage increase rises from 2027: Minimum qualifying wage increase rises to $200 for wage increases given in 2027 and 2028 (from $100 in 2026).

Enterprise internationalisation and financing support (from 1 April 2026)

From 1 April 2026 to 31 March 2029, internationalisation grants improve support levels, helping firms reduce the cost and risk of entering or deepening overseas markets. This strengthens competitiveness by making expansion, market testing, and growth projects more financially viable.

Market Readiness Assistance (MRA): Higher SME co-funding

Under the Market Readiness Assistance Grant, SMEs receive 70% support while non-SMEs receive 50%, with a support cap of S$100,000. A key update is that the grant can cover deepening activities in existing markets, not only first-time entry, improving usefulness for firms already overseas. 

What changes

• Baseline MRA provides up to 50% of eligible costs.
• Enhanced MRA provides up to 70% for SMEs from 1 April 2026 to 31 March 2029.

impact: This is most valuable when a business already has a credible expansion plan and wants to reduce upfront cash outlay on market entry costs.

Double Tax Deduction for Internationalisation (DTDi): Higher no prior approval cap

From 2026, the automatic-claim cap rises from S$150,000 to S$400,000, making overseas expansion expenses more tax-efficient. Firms can deduct more qualifying costs at 200%, improving ROI on market exploration, feasibility work, and overseas marketing efforts.

What changes

• The expenditure cap for claims that may be filed without prior approval is raised from $150,000 to $400,000 per YA.
• The scope of claims without prior approval expands to cover more eligible expenses in overseas market development and investment study trips and specific qualifying activities.

Why this matters

This lowers the “application burden” and improves planning certainty for firms that incur frequent internationalisation costs, but firms still need to manage the documentation discipline expected in tax claims.

Enterprise Innovation Scheme (EIS): New AI qualifying activity and 400% deductions

For YA 2027 and 2028, qualifying AI spend receives a 400% tax deduction, capped at S$50,000, improving after-tax ROI for AI adoption. It supports spending on implementation, subscriptions, and training, helping firms modernise workflows and lift productivity.

What changes

• A new qualifying activity is introduced for qualifying AI expenditures.
• Businesses can claim 400% tax deductions or allowances on up to $50,000 of qualifying AI expenditures for each YA.
• IRAS will provide more details by mid-2026.

Productivity Solutions Grant (PSG)

To support business AI adoption:

• A wider range of AI-enabled solutions will be made available under PSG.
• Further details are expected to be shared at Committee of Supply 2026.

Six months of premium AI tools for selected courses

Budget 2026 encourages learning by doing:

• Government provides six months of free access to premium versions of AI tools for Singaporeans who take selected AI training courses.
• Details will be announced when the specific courses are launched, and the indicator to watch for is “Premium AI Tools included”.

Other Major Policy Changes

Some non-transfer measures shape household and business costs indirectly through pricing signals and labour market shifts.

Carbon tax trajectory and household utility impact

Budget 2026 sets out the carbon tax context:

• Current level in 2026 is $45 per tonne CO2.
• The 2030 target range is $50 to $80 per tonne CO2, with the stated caveat that the 2030 rate may be set at the lower end if global climate action remains weak.

Estimated household impact: Average 4-room HDB utility bills increase by about $3 per month due to the 2026 carbon tax level. Enhanced U-Save rebates are presented as covering this increased cost and more.

Tobacco excise duty increase (effective Budget Day)

Tobacco excise duty increases by 20% from Budget Day, raising retail prices to discourage smoking. The policy aims to improve public health outcomes over time by reducing consumption, while signalling stronger deterrence through higher upfront cost.

PARF rebate reduction (vehicle replacement cost implication)

The PARF rebate is reduced by 45 percentage points, lowering deregistration rebates and increasing the effective cost of replacing cars. This discourages frequent vehicle turnover, supports car population management, and nudges households and fleets toward more cost-sensitive mobility choices.

Budget 2026 vs Budget 2025: What Changed in Plain Terms

Conclusion

Budget 2026 is best read as a two-speed plan: immediate bill relief and cash buffers to steady households, paired with a longer push that forces wage, productivity, and AI decisions into the open. Just like any other budget – it has two sides 

What Budget 2026 gets right

• Relief is usable, not theoretical: CDC vouchers and U-Save lower real monthly spending with minimal friction.
• Targeting is practical: Cost-of-living support is directed toward those likely to feel daily pressure, without a complex application maze.
• It pushes a future-ready economy: Wage support paired with skills and AI incentives signals productivity and capability building, not just short-term cushioning.

Where Budget 2026 may frustrate households and businesses

• Some meaningful family relief is delayed: The higher preschool subsidy threshold starts only in January 2027, leaving families to absorb another year of high childcare costs.
• Manpower tightening may raise business costs: Higher EP and S Pass salary floors and levy changes can squeeze labour-heavy sectors such as services and F&B.
• Carbon competitiveness concerns linger: Even with grants, the carbon tax level and 2030 trajectory may pressure energy-intensive firms.
• Benefits increasingly depend on execution: Several enterprise measures deliver value only if firms apply, document, and run projects, which can disadvantage micro-firms with limited admin bandwidth.

References

• https://www.singaporebudget.gov.sg/budget-speech/budget-statement
• Annex B-1: Support For Businesses ( 166 KB)
• Annex C-1: Harness AI As A Strategic Advantage ( 180 KB)
• Annex D-1: Uplifting Lower-Wage Workers ( 152 KB)
• Annex D-2: Updating Foreign Worker Policies ( 180 KB)
• Annex E-1: Child LifeSG Credits ( 98 KB)
• Annex E-2: Enhancements To Preschool And Student Care Subsidies ( 205 KB)
• Annex E-3: Enhancements To ComLink+ Progress Packages ( 138 KB)
• Annex E-4: Senior Worker CPF Contribution Rates And CPF Transition Offset ( 145 KB)
• Annex E-5: Budget 2026 CPF Top-Up ( 126 KB)
• Annex E-6: Community Development Council Vouchers And Budget 2026 Cost-Of-Living Special Payment ( 129 KB)
• Annex E-7: Budget 2026 U-Save ( 144 KB)
• Annex H-1: Tax Changes ( 233 KB)
• Annex H-2: Fiscal Position In FY2026 ( 184 KB)
• Annex I-1: Examples For Budget 2026 Statement ( 174 KB)