Who are the big winners from FamilyBoost?
From July, middle- and low-income families with young children will get a tax rebate for their childcare expenses each quarter.
When announcing the details of the National-led Government’s FamilyBoost policy on Monday, Finance Minister Nicola Willis said the policy would “make it easier and more worthwhile for families with young children to work”.
Whānau with household incomes of up to $180,000 would be reimbursed by Inland Revenue for up to 25% of their early childhood education costs, to a maximum of $75 per week, she said.
Given that parents and caregivers in Aotearoa/New Zealand pay some of the highest ECE fees in the OECD – and with statistics showing that the cost has risen by more than 10% in five years – an extra $75 in their pockets would likely help curb the rising cost of living.
But, after reading the fine print, and conducting its own analysis, The Post has found that some parents won’t get anywhere near that much. In fact, some families could receive just 2% of the fees they pay back as a rebate.
And, because of a stipulation in the policy which counts separated parents as different households, it’s possible that divorced parents collectively earning $300,000 could save four times as much money on childcare as a married couple earning just over half as much.
The amount families get reduces by $18.75 for every extra $10,000 they earn between $140,000 and $180,000. Families earning more than $180,000 don’t get a rebate through FamilyBoost.
However, because the cost of ECE can vary so much based on the region, hours attended and the age of the child (3- and 4-year-olds get 20 hours “free”), the extent to which the rebates will ease costs for families will also vary.
To illustrate how people in different situations could be affected by FamilyBoost, The Post has crunched the numbers to work out how much four fictitious families would stand to gain based on the current information released about the policy.
Bec, a single parent of a 2-yearold, working 40 hours per week at a supermarket checkout, earning minimum wage ($23.15 per hour, or $48,152 annually, from April 1), in Whanganui.
Her daughter’s daycare fees are relatively low – $275 for 45 hours per week – and as she’s already entitled to $6.10 per hour in a childcare subsidy from MSD, which fully covers this cost, she won’t benefit from FamilyBoost.
Amy and Wiremu, teachers each working fulltime, are parents of 10-month-old twins, living in Johnsonville. Amy earns $90,620 to his $84,178.
The twins’ daycare fees total $880 per week, for fulltime hours. Because households earning over $170,000 get a maximum rebate of $18.75 per week through FamilyBoost, Amy and Wiremu are still out of pocket $861.25 weekly in ECE fees.
Daniel and Jessica, a divorced couple, based in Riccarton, Christchurch, have an 18-month-old whom they share care of week-about. Daniel is a lawyer, and Jessica is a chartered accountant. They both work fulltime and earn the same salary - $150,000.
Daniel and Jessica split the $400 per week bill to send their son to an in-home carer four days per week (based on a rate of $10 per hour for 10-hour days). On Fridays, Jessica’s father looks after him for free. Because FamilyBoost considers separated parents as two households, Daniel and Jessica can each claim $50 per week from FamilyBoost.
Marama and Andy, live in Pakuranga, Auckland. Andy’s a self-employed graphic designer and Marama is a registered nurse. They have three kids, aged 10, 7 and 3. They both work parttime, take home $164,000 per year, and pay just $50 to send their youngest to kindergarten three part-days per week due to the “20 hours free” policy for 3and 4-year-olds.
Under the scheme, this couple would be entitled to $12.50 per week back.