The early childhood tax credit explained
Families earning below $140,000 will be able to claim up to $75 a week back on their childcare costs from July 1 – money Finance Minister Nicola Willis says will help them afford fees that are the most expensive in the developed world.
Caregivers will have to upload their invoices to Inland Revenue to claim the credit – which will be paid out every three months – and the government has given the early childhood sector three months to work through any administrative issues.
These families would be paying $300 a week in fees.
About 100,000 families, and 140,000 children, will benefit from the scheme overall. The package will cost a total of $723 million over four-year budget period.
The first payment is in October, and then every three months after that. A household with $150,000 annual income will get up to $56.25 a week, or $731.25 quarterly. A houshold with a $160,000 income will be eligible for up to $37.50 a week – or $487.50, and a household earning $170,000 will get $18.75 ($243.75).
Willis said the scheme would make a big different to families struggling with the cost of living, but Labour and the Greens said it was full of fishhooks.
Labour’s education spokesperson Jan Tinetti said the scheme would be a “bureaucratic nightmare” for officials, adding that Labour’s policy to extend the 20-hours free childcare scheme to two-year-olds would have been easier to administer. The scheme already covers ages 3 to 5. Tinetti said Labour’s policy would have kicked in from March, and families would benefit from up to $130 a week. “They wouldn’t have had to claim that through a rebate,” she said.
Green Party co-leader Marama Davidson, said Family Boost would deliver “nothing more than a drop in the ocean for families”.