Childcare Subsidy Announcement: What It Means For Your Family
The Labour government announced changes to the Childcare Subsidy program effective 1 April 2023. This is welcomed news for many Kiwi families. New Zealand is the fourth most expensive country in the world for childcare. A Kiwi couple earning the average wage with two children in full-time daycare spends 28% of their household income on childcare - and that’s before tax (OECD - 2021).
We answer your burning questions below.
What change did the government announce on the Childcare Subsidy?
On Sunday, 6 November 2022, the government announced that it will increase the eligible income threshold on 1 April 2023 so more families can receive the Childcare Subsidy. This change is aimed at easing the cost of living pressures.
The Childcare Subsidy is designed to make childcare services more affordable for low and middle families so they can work, pursue further education and/or take care of their well-being.
The government estimates that the new income thresholds will mean an additional 10,000 children will be eligible for the subsidy, and over half of all New Zealand families with children will now receive financial assistance with childcare.
So what does this mean for my family?
The Childcare Subsidy is based on family income. We’ve built a handy tool so you can estimate what your family could be eligible for starting 1 April 2023.
Note: the tool uses the provisional income thresholds released by the government. The actual income thresholds will be confirmed when wage data is released at the start of next year.
Where can I find more information about the announcement?
You can find the government announcement here.
Where can I apply for the Childcare Subsidy?
You can apply on the MSD website here. They suggest you submit the application at least 3 to 4 weeks before you need your subsidy to start.
Are there any other care-related subsidies for families with kids?
Early childhood education: the other subsidy available for early childhood education is 20 Hours ECE. Our friends at Kindello have a blog post breaking this down.
Note: Families receiving the 20 hours ECE can't get the Childcare Subsidy for the same hours.
School-aged kids: the Out of School Care and Recreation (OSCAR) Subsidy is a payment that helps families with the costs of before- and after-school care for up to 20 hours a week and school holiday programmes for up to 50 hours a week. You find more information here.
Now for the important legal part: The information we provide is general and not regulated financial advice for the purposes of the Financial Markets Conduct Act 2013. Please seek independent legal, financial, tax or other advice in considering whether the content in this article is appropriate for your goals, situation or needs. The information in this article is current as at 7 November 2022.
