The Government announced today it 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 also announced increases to the Working for Families Tax Credits.
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, and which Labour continued since coming to power in 2017.
“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,” Jacinda Ardern said.
“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.
“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” Jacinda 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.
“We’re continuing to make significant progress on our welfare overhaul. This has included lifting core benefits to historic levels, reinstating the Training Incentive Allowance to support the likes of sole parents into work, allowing Child Support to be passed on to sole parents as well as investments made through the Families Package and our year-on-year increases to the minimum wage.
“There is still more work to do however, and that’s why we’ve prioritised our Working for Families Review with a focus on how our system of tax credits can better support families on the lowest incomes, particularly working families. Making childcare more affordable is only one step along the journey, with our Review of Childcare Assistance currently ongoing.
The changes will take effect from 1 April 2023 and the policy will cost $189.391 million over four years.
Image credit: Juan Pablo Serrano Arenas