Monday, August 20, 2012

Loopholes In Bursary Application Process

A portion of my investible networth is accumulated through government and private bursaries. A bursary is a monetary award that is granted to students on the basis of financial need. However, there are loopholes in the application process which made it unfair for the truly underprivileged students. Let's take for example the eligibility of CDCC Bursary. To be eligible for this bursary, one needs to be a Singapore citizen with monthly gross household per capita(average) income of no more than $850.

For students whose parents are salaried employees, they will have to submit their parents' latest gross monthly payslip. This is fair as there isn't any way to manipulate the figures on the payslip issued by the company.

Things become slightly more manipulable for the unemployed and self-employed. The required supporting document for the Unemployed/Retrenched/Retired/Housewife  is the CPF contribution history for the last 12 months. For the self employed, a tax assessment notification by local tax authority or the latest annual tax returns submitted to a local tax authority will be required.

Here are the loopholes: Since the majority of self-employed persons declare lower income to pay lesser taxes(from what I know), the reported income on their tax statements might not be a true reflection of their financial situation. In addition, the bursary applicant could declare their self-employed parents as unemployed since the only document they need to produce is the CPF contribution history and self-employed do not contribute to CPF. I personally know some of my friends who did that and were subsequently awarded the bursary. Also, retired parents could be financially free, having multiple streams of passive income or even sitting on a pile of cash. However, the only supporting document required for the retired/unemployed is the CPF contribution history. The evidence of having zero CPF contribution for a retiree/unemployed is grossly insufficient to determine a person's financial ability.

For my situation, my monthly gross household income per capita is indeed lower than $850. Having an investible net worth of more than $50,000 and still receiving bursaries might seem to be pushing the boundaries of ethics. However, I met all the requirements for the bursaries and it is no more than doing the uncommon within rules.