The Government is easing cost of living pressures for the majority of New Zealand families by improving access to and the value of childcare assistance Prime Minister, Jacinda Ardern announced today.
The Prime Minister also announced increases to the Working for Families Tax Credits that almost 60% of New Zealand families currently receive.
The latest policy in the Government’s package of cost of living measures reverses a freeze on the income threshold for childcare eligibility that National put in place in 2010. By playing catch-up and indexing the income threshold to wage growth over 10,000 additional children are estimated to receive support, the Prime Minister said.
“We’re targeting one of the most significant costs for working families by making childcare and before and after school care more affordable to a greater number of low and middle-income families,” said Ms Ardern.
“At a time when families are feeling the cost-of-living spike, we’re investing in what matters most by making sure childcare is within reach for parents and they have more support to cover other costs.”
The policy means a family with two parents both working 40 hours per week on $26 per hour with two children under five who will not have been eligible for childcare assistance, now will be eligible for $252 per week from 1 April 2023, the Prime Minister said.
“Research shows nearly 23% of mothers report difficulties getting childcare while working or wanting to work. This policy helps remove that barrier and enables parents to enter the workforce to help fill labour shortages, so it’s a win-win for families and the economy,” she said.
“It’s also about restoring opportunities for children to get the best start in life. Evidence shows that participation in high quality childcare can reduce the impact of socio-economic disadvantage.”
The inflation adjustment of the Family Tax Credit will also provide a little extra relief for the majority of working families. Along with previous increases to the Family Tax Credit, a family with two children on a median family income for Working for Families recipients are now receiving over $1,300 more a year since we took office. That climbs to over $3,600 for families receiving the Best Start payment.
“Supporting New Zealand families with the cost of living is the top priority for the Government. This kind of targeted support not only reaches those who need it most but it won’t have a significant impact on inflation and make the problem worse,” Ms Ardern said.
“Making childcare more affordable will help to remove financial barriers to work, particularly for sole parents and those on low- to middle-incomes,” Minister for Social Development and Employment, Carmel Sepuloni said.
“The policy will also help to address disparities in for Māori and Pacific mothers who are more likely to experience issues accessing childcare.
“For our tamariki, they’ll also get the best start in life by participating in high quality early childhood education. This will help set them up on pathways into further education and create positive opportunities for them to engage in their communities in the long-term,” she said.