TAIPEI (Taiwan News) — The legislature passed a bill Friday creating a child savings account program that will provide each eligible child with at least NT$1.14 million (US$35,000) in government contributions by age 18.
The child savings account bill was jointly proposed by the KMT and TPP and passed its third reading on Friday, per SETN News. Under the program, the government will open two accounts for eligible children: a future savings account to help them build assets and an allowance account that provides funds for withdrawal.
Children born after the law takes effect will receive a NT$60,000 (US$1,800) startup contribution, followed by annual government contributions of NT$60,000 from ages 0 to 6. From ages 7 to 18, the government will deposit NT$30,000 each year into the allowance account and another NT$30,000 into the future savings account.
The accounts will be overseen by the health ministry and opened under the child's name, per NOWnews. Parents or legal representatives can deposit additional funds, with a maximum annual contribution of NT$200,000 until the child turns 18.
The program will also allow employer-sponsored contributions of up to NT$50,000 per year for each child until age 18. Government contributions and the startup payment alone would amount to at least NT$1.14 million by the time the account holder turns 18.
The program applies to Taiwanese under the age of 18 who have a registered residence and live in the country for at least 183 days each year, per Mirror Media. The central government will allocate funding and provide subsidies to local governments, with startup payments and allowance contributions excluded from local government financial obligations.
The law also allows parents, legal representatives, or close relatives who make deposits into the accounts to receive income tax exemptions and avoid gift taxes. It requires the government to establish incentives and tax benefits for companies that contribute to the accounts.
Once account holders turn 18, they will be notified to close their accounts, and earnings generated after that point will be subject to income tax, Mirror Media reported. Remaining funds will be returned to the national treasury if the account is not withdrawn or closed.
If an account holder dies, develops a severe disability, or suffers a serious illness before turning 18, legal representatives or close relatives may apply to withdraw the remaining balance, per ETtoday.
If the account holder dies within 10 years after turning 18 and has not completed withdrawal and account closure procedures, the original legal representative or closest relative may apply to withdraw the remaining self-deposited funds.
