What Government’s childcare subsidy announcement means for your family

The Government says its cost-of-living package means over 50 per cent of Kiwi families are now eligible for subsidised childcare support - including nearly every sole parent.

The policy, the Government said, reverses a freeze on the income threshold for childcare eligibility that National put in place in 2010.

“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,” Prime Minister Jacinda Ardern said.

The policy means families who were not eligible for any childcare assistance in the past will receive support now.

For example, a couple who works 80 hours a week earning a low wage at $26 per hour and who have two children aged 2 and 4 years old were not eligible for any funding support with the previous policy but will now be able to receive $252 per week.

A couple in a similar situation but with one child aged 3 would receive $52 per week.

Meanwhile, families who do already receive a subsidy will get more financial relief.

A couple who works 80 hours a week on minimum wage and who have two children aged 2 and 4 years old were previously only eligible for a subsidy of $99 per week. Now they will receive $360 per week.

A sole parent who works 40 hours a week earning $26 per hour and who has two children aged 2 and 4 years old is now eligible for $452 per week, an increase of $92 per week.

Families with school-aged children will also get more money to go towards school holiday care.

A couple who works 80 hours per week earning $26 per hour and with children aged 6 and 8 years old needing 47.5 hours of childcare per week in the holidays and 17.5 hours in the school term are now eligible for $118 per week during term and $319 during the holidays.

Meanwhile, a sole parent who works 40 hours a week and earns $30 per hour who needs full-time care for two children and 17.5 hours a week during school holidays for a third child will now receive $114 more in the term and $151 more in the school holidays.

Families only needing part-time childcare have also not missed out on benefiting in the policy.

A couple who combined works 60 hours per week and earns $30 per hour, and who needs 27.5 hours of childcare a week for two children and a third during school holidays will now receive $50 more during the term and $90 more during the holidays.

The New Zealand Council of Trade Unions said the announcement would be a “big help to many working families”.

“We welcome these changes which further underline how this Government is backing working families at a challenging time for so many,” Council of Trade Unions Secretary Melissa Ansell-Bridges said.

“We know working families are facing increasing costs across groceries, fuel, mortgages, rents and electricity so this extra support will make a real difference to those needing childcare assistance which can be a significant part of the household budget.

“It will also make it easier for those to seek work or expand their hours which so many working people are having to do to make ends meet.”