Parents with young children in early childhood education will soon be able to claim up to $75 per week in a measure the Government says will help families with the high cost of living.
The policy, called FamilyBoost, was first announced in March last year.
It means from July 1 parents and caregivers of young children will be eligible to apply for a partial reimbursement of early childhood education (ECE) fees, up to 25% of the weekly fees to a maximum of $75 per week.
The Government's FamilyBoost scheme could see some families up to $75 better off per week. (Source: 1News)
Eligible people would need to collate their ECE invoices from July 1 and apply on a three-monthly basis for a lump-sum repayment through Inland Revenue's online platform, MyIR. First payments would be made in October this year.
Finance Minister Nicola Willis said many families were struggling with high housing, food, and childcare costs.
"One of our priorities is to support families to get ahead by helping them with the high cost of living, including help for those bearing the brunt of childcare costs.
"Being able to afford ECE fees can also be a barrier to entering the workforce, particularly for the second earner in a household. FamilyBoost will make it easier and more worthwhile for families with young children to work by directly assisting them to pay those ECE fees."
Willis said around 21,000 families would be eligible for the rebate and it would cost $723 million over four years.
She said the policy was a campaign commitment and formed part of the Government's overall tax plan.
"I am delighted we are delivering on our promise today with support for those who need it."
The FamilyBoost credit related to fees from a licenced ECE provider after the 20 Hours Free and the Ministry of Social Development's childcare subsidy were taken into account.
Only families earning $180,000 and under, with childcare costs, were eligible, with the maximum repayment gradually reducing for families earning more than $140,000.
Household income would be calculated by Inland Revenue (IRD) using the past three months' worth of actual reported income to determine eligibility.
Parents and caregivers would be able to submit their ECE invoices every three months via myIR, with FamilyBoost refunded as a lump sum.
Willis said IRD would now communicate with ECE providers ahead of the implementation of the policy to ensure they were ready. Full details of the policy, including how to apply, will be available on Budget Day — May 30 — this year.
FamilyBoost would be available to both parents of a child in shared care, provided they meet at least a portion of the ECE costs.
Willis said the main change from campaign policy was that it would be a quarterly rather than a fortnightly refund, as IRD's systems were unable to deliver the latter.
She said the Government's preference was initially to resolve that capability issue to enable fortnightly payments instead, but was advised that could take years.
In response to the FamilyBoost announcement, Labour's education spokesperson Jan Tinetti said basing the new subsidies on rebates would make it harder for people to access if they couldn't afford the upfront costs.
"Any policy that is a rebate is making it harder for families upfront... that upfront cost is really difficult for families. It's important we're looking at more universal support."
She told media that the previous government's plan would've been superior. Labour's Budget 2023 initiative was to extend 20 hours free ECE to two-year-olds, which would've taken effect this month had it not been scrapped in December's mini-budget.
"It would've given families up to $130 week in savings for them. They wouldn't have had to get it as a rebate, they wouldn't have had upfront costs, it was a universal policy for all two-year-olds," Tinetti said.
After the announcement of the policy last year an early childhood education provider said it would be a "huge relief" to parents, while ACT's Brooke van Velden said it needed to come alongside tax cuts — which the Government has repeatedly committed to in recent weeks.
Green Party co-leader Chloe Swarbrick, speaking last year, said the 62% of early childhood education providers were private companies and when there was a "middle man whose key driver is to make profit, of course they are laughing their way to the bank".
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