From January 1, 2026, parents and trustees will no longer be able to use Child Development Account (CDA) funds at optical shops and retail pharmacies, announced the Ministry of Social and Family Development (MSF).
Why the Change?
- Audits by the Auditor-General’s Office revealed poor record-keeping and suspicious transactions.
- Misuse included purchases for adults, and in some cases, CDA monies were even encashed illegally at retail outlets.
- An internal MSF audit found that over 85% of optical shops checked in 2024 had unauthorised purchases.
What’s Still Allowed
- The ban applies only to retail outlets like optical shops and pharmacy chains in malls.
- Parents can still use CDA funds at healthcare institutions (hospitals, polyclinics, GP clinics) for consultations, prescribed medication, and child-related healthcare needs.
- CDA funds also continue to cover pre-school fees, kindergarten expenses, and enrichment programmes at approved institutions.
Impact
- Usage of CDA funds at optical shops (0.8%) and retail pharmacies (0.4%) is very low, compared with 97% of spending at preschools and healthcare providers in 2024.
- MSF said the government will continue reviewing CDA rules to ensure the scheme benefits children and their siblings, in line with its original intent.
The move tightens controls to prevent abuse of the Baby Bonus Scheme, ensuring CDA funds are spent strictly on children’s education, health, and development, not unrelated purchases.
