Just 573 of 21,000 eligible families getting full $150 childcare tax credit
Just a fraction of the families the Government said were eligible for the full amount of the Family Boost childcare tax credit have now received it.
Answers to written parliamentary questions from the Labour Party show just 573 households have received the full $975 quarterly payment in both of the first two quarters in which the scheme has been operational.
A higher number, 2943 households, had received the payment in at least one of the first two quarters the scheme had been up and running. The figures were current as of February 3 and are likely to rise as more families make claims for the credit.
Both of those figures are well below the 21,000 households Finance Minister Nicola Willis said would be eligible for the scheme when she unveiled it in March. That figure is based on Government modelling.
A full 79,560 families had received the credit in either or both of the first two quarters it had been in force. This is closer to the 100,000 families Willis believed would be eligible for the credit.
However, the quarterly figures are much lower. As of February 3, just 43,554 families have claimed the credit for the third quarter of 2024, the first quarter of the scheme.
Those figures suggest the number of families who will receive the credit for the whole year may be well below the number of people eligible for it.
The figures cut to the heart of National’s election claim that an “average-income” family would receive $250 a fortnight from the plan. A full $150 of that figure was composed of Family Boost credits, with the remainder coming from income tax cuts and another tax credit.
These figures show that as of February 3, a maximum of 573 families could be getting the full $250 – the actual figure would likely be lower because both earners in this “average” household would need to be earning specific incomes in order to get the right amount in income tax cuts and to qualify for the other tax credit.
Families who earn less than $180,000 a year can apply for the payment, which returns up to 25% of their weekly childcare fees up to $75 a week. Families have to apply for the refund, which has been dogged by criticism of low uptake, which critics put down to it being administratively burdensome.
Labour’s finance spokeswoman Barbara Edmonds attacked the Government, noting the number of families who had received the payment in full were far lower than promised. She also drew attention to the fact Inland Revenue had “declined tens of thousands of claims, with several being denied for simple reasons related to invoice errors or a return not being filed properly”.
That figure was drawn from another written question, which found that as of February 3, 18,522 claims had been declined. Two-thirds of declined claims were due to income being over the quarterly threshold, despite the fact their annual income might be below $180,000.
The remaining third were declined “for a range of reasons including issues related to the invoice, or due to a return not being filed”.
“Kiwi families aren’t getting what they voted for. Instead, they get more broken promises and rising unemployment,” Edmonds said.
Willis defended the figures, saying they would continue to rise as more people claimed the credit.
“It will be cumulative over the year. We’re only a few months into it. I suspect many people won’t apply until the end of the year. Some people will apply in one quarter and not another,” she said.
When asked about the number of families receiving the payment, Willis said “what I want is everyone who is eligible for Family Boost to get their Family Boost payment”.
“I want New Zealanders to know that if you have childcare costs for your under-5-year-old, you should go on to the IRD website and apply for the Family Boost payment,” Willis said.
Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.