Hardworking families are set to benefit from a new credit to help them meet their early childcare education costs, Finance Minister Nicola Willis says.

From 1 July, parents and caregivers of young children will be supported to manage the rising cost of living with a partial reimbursement of their ECE fees.

Under the scheme, parents can get back up to 25 per cent of their weekly fees, to a maximum of $75 per week.

“Many families are struggling with high housing, food, and childcare costs. One of our priorities is to support families to get ahead by helping them with the high cost of living, including help for those bearing the brunt of childcare costs.

“Being able to afford ECE fees can also be a barrier to entering the workforce, particularly for the second earner in a household. FamilyBoost will make it easier and more worthwhile for families with young children to work by directly assisting them to pay those ECE fees.

“FamilyBoost was a campaign commitment and forms part of our overall tax plan. I am delighted we are delivering on our promise today with support for those who need it,” Nicola Willis says.

The FamilyBoost credit of up to $75 per week relates to fees incurred with a licenced ECE provider after the 20 Hours Free and MSD’s Childcare Subsidy are taken into account. 

All families earning up to $180,000 with childcare costs are eligible. However, to ensure support goes to families who need it most, the maximum repayment will gradually reduce for families earning more than $140,000. Household income will be calculated by Inland Revenue using the past three months’ worth of actual reported income to determine eligibility.

To ensure the repayment goes swiftly and accurately to eligible parents and caregivers, ECE invoices are submitted directly through IR’s online system, myIR.

“Parents and caregivers will be able to submit their ECE invoices every three months via myIR, with FamilyBoost refunded as a lump sum. Parents should start collecting invoices from 1 July, so they can begin to apply and be refunded from October 2024.

“IR will now engage with ECE providers ahead of implementation to ensure they are ready to support families access FamilyBoost,” Nicola Willis says.

Full details of FamilyBoost, including how to apply for it, will be available on Budget Day – 30 May 2024.