Finance Minister Nicola Willis says Cabinet has signed off the changes, including increasing the amount of rebate and curbing the reductions for higher earners. Photo: RNZ / Mark Papalii
Changes to the government's FamilyBoost scheme are expected to broaden access and increase repayment amounts, backdated 1 July.
Finance Minister Nicola Willis promised to review the scheme which provides rebates for early childhood education, after government figures showed just 249 families had consistently claimed the full amount - well short of the 21,000 families initially estimated.
With the policy being a key plank of the up to $252 a fortnight tax package National campaigned on, the left-leaning Council of Trade Unions said under a conservative estimate [https://www.rnz.co.nz/news/political/558992/fewer-than-50-families-to-get-national-s-full-tax-package-says-ctu fewer than 50 families would claim the full benefit.
Willis had said all the money set aside for the scheme would be redistributed to families who needed it, rather than retained by the government - although figures in May showed nearly a quarter of was being spent on administration costs.
FamilyBoost allows parents and caregivers to claim back a quarter of what they paid in childcare costs as a tax rebate, up to $75 a week.
To qualify for the full amount, families must be paying more than $300 a week in childcare costs, but also earning under $140,000 a year. Families earning up to $180,000 a year can get smaller amounts, while those earning above that cannot claim the rebate.
Willis had promised the changes would be made by July. With that deadline due the next day, Prime Minister Christopher Luxon on Monday promised it would be announced "very shortly".
"The uptake of it hasn't been taken up in the way that we thought it would do, and so we want to make sure that those funds actually do get out to low and middle income working New Zealanders, so we are revisiting that policy and Nicola will have more to say about it very shortly."
Willis later told Newstalk ZB the Cabinet had signed off the changes earlier that day, including increasing the amount of rebate and curbing the reductions for higher earners.
"That will allow people from 1 October when they make their claims to claim a bit more, and that will apply for fees incurred from 1 July," she said.
"I'll be making a detailed announcement about that imminently."
Labour leader Chris Hipkins said the scheme was a flop, and the finance minister's promised fix for it was overdue.
"Nicola Willis promised New Zealanders that by the first of July she would have answers for them on how she's going to fix her debacle of a FamilyBoost scheme... I think we can now add FamilyBoost to Nicola Willis' long list of debacles, including cancelling the interisland ferries, giving tax cuts to tobacco companies and cutting women's pay.
"This is a government that talks a big game but doesn't deliver on its promises. This government has abandoned middle New Zealanders - while they're doing victory laps saying they've fixed the cost of living crisis, for most Kiwi families it's still pretty damn tough going and this government's got its head buried firmly in the sand."
Willis had blamed the lack of uptake compared to initial estimates on Inland Revenue's calculations, although the scheme - initially proposed as an automatic payment - also requires parents to collect invoices from their ECE provider and submit those for payment every three months.
However, the estimate of 21,000 getting the full amount and 100,000 families getting some benefit from the policy was formulated based on those settings.
Hipkins said Willis needed to stop blaming officials.
"She designed it in opposition. The IRD, the Treasury - none of them had anything to do with the designing of the FamilyBoost, it was all Nicola Willis' work. Now she's trying to blame officials for the fact that it's a flop, actually she needs to get the officials to give her some advice on how to fix it."
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