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Childcare Subsidies From July, Families Eligible Up To $75 A Week

Finance Minister Nicola Willis. Photo: RNZ / Samuel Rillstone

The FamilyBoost childcare subsidy will begin from 1 July this year, with the refunds being paid out from October, Finance Minister Nicola has announced.

Rather than being paid fortnightly as the party had proposed, it would be paid out once every three months, and parents would be required to apply using invoices from early childhood education providers.

National campaigned on the scheme ahead of last year's election, promising a 25 percent rebate up to a maximum $75 a week on childcare costs.

Repayments for those earning between $140,000 and $180,000 would be gradually reduced from 25 percent, and families earning more than $180,000 would be ineligible.

The fee payments would also be calculated after the 20 hours free and Ministry of Social Development childcare subsidy had been taken into account.

Finance Minister Nicola Willis announced the decision after the usual Monday Cabinet meeting, alongside Prime Minister Christopher Luxon.

"Many families are 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," she said.

"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.



"Parents and caregivers will be able to submit their ECE invoices every three months via myIR, with FamilyBoost refunded as a lump sum. Parents should start collecting invoices from 1 July, so they can begin to apply and be refunded from October 2024."

The scheme would work by parents submitting applications through Inland Revenue via the myIR website, including invoices from ECE providers. Household income would be calculated by the department using three months of actual reported income.

When the policy was announced in the lead-up to the election, National had proposed the payments would be made fortnightly, directly into parents' bank accounts.

It had then been costed at $249m a year, to be paid for from the $400m National expected to save by reducing the use of contractors and consultants in government departments.

Labour had campaigned on extending the 20-hours ECE free policy to two-year-olds.

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