New childcare subsidy to ease burden on working families
Prime Minister Jacinda Ardern and her team during the Labour Party conference in Auckland yesterday.
More families will receive subsidised childcare from next year as the Government takes aim at the rising cost of living.
The Government will start paying for up to 10,000 more children to go to after-school care and preschools, Prime Minister Jacinda Ardern says. For some families, this means they will receive hundreds of dollars each week – to pay for their children to be looked after while they work.
The move would see any family on an income under $109,000 eligible for government subsidies for their children to go to early childhood centres, after-school care and holiday programmes.
For families with three children, the income cap would increase from $130,105 to $140,244.
For two-child families, the new cap threshold would be about $125,000 – an $8000 increase.
Ardern announced the expansion to the childcare and OSCAR subsidies during the Labour Party annual conference, saying this was an example of ‘‘targeted support’’ to combat the cost of living crisis.
Expanding the childcare subsidies would mean just over half of all families would be able to receive subsidised care, she said, starting in April next year.
The government programme to support low-income families to afford childcare has been ongoing for years but Ardern hit out at the
previous National government during her speech, for freezing the income thresholds in 2010. Last year, Social Development Minister Carmel Sepuloni increased the income eligibility thresholds somewhat. But yesterday’s announcement would ‘‘reverse the freeze’’, Ardern said, significantly lifting the thresholds. She said it would make up for 11 years of freeze, bringing the thresholds in line with wage inflation seen over those years.
‘‘The National government cut childcare assistance so severely that the number of children supported plummeted by half, from over 50,000 in 2010 to fewer than 25,000 this year,’’ she said.
From April, the expanded childcare subsidies would see a two-income family, earning a combined $108,000 a year, with two children under 5, receive $252 a week to pay for early childhood care. When those children are primary-school aged, the family would receive $118 a week for after-school care and $319 a week for school holiday programmes. Under current rules, that family earns too much to be eligible for any childcare subsidies. A sole parent earning $54,000 with two children under 5 years old would receive an extra $92 a week, increasing their subsidy to $452 a week from $360.
‘‘Right now, the load for families across New Zealand is a heavy one and while there are many pressures, we know childcare is the biggest in-work expense for families,’’ she said. ‘‘This kind of targeted support not only reaches those who need it most, it is support we can afford that unlike across the board tax cuts, won’t have a significant impact on inflation and make the problem worse.’’
Her announcement came at the conclusion of Labour’s three-day annual conference. Party members and MPs have been gathering in South Auckland, since Friday.
The prime minister had signalled a significant cost of living announcement, saying this ‘‘crisis’’ was her top priority in the 12 months heading into the election.
‘‘The National government cut childcare assistance so severely that the number of children supported plummeted by half.’’ Jacinda Ardern
Prime Minister