20 HOURS ECE FOR TWO YEAR OLDS FAMILY BOOST CHILDCARE TAX REBATE HOWDOES ITWORK ? ECE services already offer 20 Hours ECE but only for children aged three or older. Two year olds would currently have fewer places available and have very high fees. Changing the starting age makes lots of children eligible who wouldn’t have been. 20 Hours ECE is funded at the highest rates for services. A tax rebate will be paid fortnightly to parents to a maximum of $75 per week. It will be income-tested (based on combined family income). The maximum weekly rebates are: • Up to $140k - $75 per week • $150k - $56.25 per week • $160k - $37.50 per week • $170k - $18.75 per week. In addition the family needs to have childcare costs to claim rebates. HOWMUCHWOULD IT SAVE FAMILIES ? $133 per week per 2 year old No additional savings for families with children over 2 years old • Up to $75 per week per family (if $300 in childcare costs) • Up to $50 per week per family (if $200 in childcare costs) • Up to $25 per week per family (if $100 in childcare costs) This applies irrespective of the age of the child. DOES IT HELP FAMILIES ? Yes, more places for 2 year olds should become available in the medium-longer term, with lower fees. Approximately 80% of households with a child under five will be eligible for some support. It means families could afford to attend for longer than before. Potentially gaining an additional day’s ECE or making the saving. DOES IT HELP SERVICES ? Services in Auckland experiencing low demand may see renewed interest in ECE. Demand will tend to increase nationally as measured by funded child hours for 2 years per week. However, in the short and medium term the ability of services to offer more hours will be constrained by the teacher shortage. Applies to children of all ages but is a weaker financial incentive to families if you compare the savings to families (younger families with more children benefit less with Family Boost). The same types of benefits apply as the 20 Hours ECE extension to 2 year olds but at weaker levels - so behaviour changes like ECE services offering more places and lowering fees will be slight and harder to measure (as changes across all age groups may not show up noticeably based on participation changes). CAVEATS 20 Hours ECE may no longer be covering service costs fully. It was meant to achieve this "on average" but sector leaders are concerned that the average' service is not an average service that parents actually want anymore (offering only 6 hours per day). Government policy settings and funding rates have not kept up over time (the original policy was announced in 2007). Unfortunately, we do not get both initiatives! The Family Boost policy is not on top of the extension of 20 Hours ECE to 2 year olds - it would be instead of that. More information? https://bit.ly/47roNnG https://www.national.org.nz/familyboost LINK for parents: https://bit.ly/3Kuv0Fx * 20 Hours ECE has always had a rule that prevented services from charging fees for those first 20 hours per week; the unworkable condition was to allow parents to only enrol children for 20 hours per week (at six hours max per day); this could leave ECE centres with no way to cover the additional teacher (and other) costs they have that government doesn’t fund for.Many enrolments are for more than 20 hours and fees are charged for those additional hours. Without additional hours there would be no way to recover those other unfunded costs. Based on currently available information, see ECC’s assessment for voters, taxpayers, parents, teachers and service operators below - As of 16 August 2023. August 2023 { 10 }
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