- Hon Nicola Willis
Tens of thousands of households will be better off thanks to changes being made to FamilyBoost to help families with the cost of living, Finance Minister Nicola Willis says.
"From the start of this month, families will get larger FamilyBoost rebates on the early childhood education fees they pay, with rebates increasing from 25 per cent to 40 per cent of weekly fees, and those with household incomes of up to $229,000 now eligible to apply.
"This means for example that a family with early childhood fees of $100 a week could have their weekly FamilyBoost payment increased from $25 a week to $40 a week, meaning their annual payments would increase from $1,300 to $2,080 over the course of a year, making them hundreds of dollars better off.
"FamilyBoost rebates are calculated according to the weekly fees parents pay, so the maximum payment is also increasing, from $75 a week to $120 a week. The maximum refund is only available to those who pay weekly fees of $300 or more, however it's important to note that parents at all fee levels can now claim 40 per cent of their total fees, so these changes will result in bigger payments for many families who already take part in the scheme.
"Cabinet has also decided to increase the number of families eligible for the scheme, by reducing the abatement rate for families earning more than $140,000. This means the upper limit for households to receive a portion of FamilyBoost increases from $180,000 a year of income to just under $230,000.
"We know many people are still doing it tough. These changes will help many families to deal with the increased costs that come with having young children.
"The changes will put more money in the bank accounts of households currently receiving FamilyBoost and extend the scheme to thousands of families that were previously ineligible for it.
"We note that only eligible families who make a claim will receive the rebate. To date, around 60,000 families have successfully claimed the FamilyBoost tax credit which is less than the number of families estimated to be eligible.
"The changes we are making will make around 22,000 more households eligible for the scheme. Based on the current take-up rate, officials estimate this may result in up to 16,000 more families accessing the payment.
"Officials estimate these changes can be accommodated within the appropriation set for the scheme in Budget 2024.
"I encourage all households who think they may be eligible for FamilyBoost to register for it on Inland Revenue's website. Families who have done so tell us it is simple to do and only takes five minutes.
"FamilyBoost is paid out every three months. The changes will apply for fees paid from 1 July, with claims available to be made from 1 October.
"We have also asked officials to progress work on longer term improvements to the scheme, including by having fees information provided directly to Inland Revenue by ECE providers. FamilyBoost will also be included in the Early Childhood Education Funding Review which is examining the full range of supports available to families with children in early childhood education."
Legislation giving effect to the changes will be introduced in time for the increases to be in place when households next claim rebates in October. The changes will apply to fees incurred from 1 July 2025.
