November 25th, 2024
In a significant move to alleviate the financial burden on families, Finance Minister Nicola Willis announced a new initiative that promises up to $75 weekly support towards early childcare education (ECE) fees. Named FamilyBoost, the scheme is designed to ease the cost of living for parents and caregivers from 1 July.
The big picture: Aiming to ease financial strains
Support for the working families: Families struggling with the escalating costs of housing, food, and childcare will find solace in the government's latest offering. FamilyBoost aims to assist families in managing their expenses, particularly those hardest hit by childcare costs.
Encouraging workforce participation: High ECE fees have often been a barrier for parents, especially secondary earners within a household, to enter or re-enter the workforce. By partially reimbursing childcare costs, FamilyBoost seeks to make employment more attainable and financially rewarding for families with young children.
Zoom in: Understanding FamilyBoost's mechanics
Credit details: Eligible parents can reclaim up to 25% of their weekly ECE fees, capped at $75, for expenses incurred with licensed ECE providers. This comes after considering the benefits of the 20 Hours Free scheme and the Ministry of Social Development's Childcare Subsidy.
Income eligibility: The credit is available to families earning up to $180,000 annually, with the maximum benefit gradually decreasing for households earning above $140,000. Eligibility will be determined based on the household income assessed by Inland Revenue (IR) over the past three months.
What they're saying: 'A step towards financial relief'
Finance Minister Nicola Willis hailed the initiative as a fulfilment of a campaign promise and a critical component of the government's tax plan aimed at supporting families facing the high cost of living. The scheme not only addresses immediate financial relief but also provides a pathway for increased workforce participation among parents.
How it works: The application process
Submission through myIR: Parents and caregivers are instructed to submit their ECE invoices every three months via myIR, the online system of IR. FamilyBoost will then refund the eligible amount as a lump sum, encouraging parents to start collecting invoices from 1 July to apply and receive refunds from October 2024.
Engagement with ECE providers: Ahead of FamilyBoost's implementation, IR will connect with ECE providers to ensure a smooth transition and adequate support for families looking to access the new benefit.
What's next: Further details anticipated
Additional information on FamilyBoost, including application procedures, will be disclosed on Budget Day, 30 May 2024. This announcement marks a pivotal moment for New Zealand families, promising them financial respite and more opportunities for employment.