Government confirms childcare tax rebate move, some families to receive up to $75 per week

  • 25/03/2024

The Coalition Government is moving ahead with National's FamilyBoost policy from July 1. 

The policy was a central pillar to National's overall tax relief pledge at the election last year. 

It features a tax rebate of up to $75 per week on the cost of childcare, with the actual amount received determined by the family's income. The rebate is on fees incurred with a licenced ECE provider after the 20 Hours Free policy and the Childcare Subsidy is taken into account. 

All families earning up to $180,000 will be eligible for a 25 percent rebate on their early childhood education (ECE) expenses, up to a maximum of $75 per week.  

The full $75 per week would only be available to those earning up to $140,000 and spending $300 per week on childcare. The rebate would then gradually reduce, with, for example, a family earning $170,000 receiving $18.75 per week. 

The Government will calculate a household's income by using the past three months' worth of actual reported income. 

"Many families are struggling with high housing, food, and childcare costs," said Finance Minister Nicola Willis.  

"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." 

She said parents and caregivers will be able to submit their ECE invoices every three months through the myIR service and get their FamilyBoost rebate refunded as a lump sum. As payments will be made every three months, those getting the full amount will get $975 every three months.  

"Parents should start collecting invoices from 1 July, so they can begin to apply and be refunded from October 2024," Willis said. 

"IR will now engage with ECE providers ahead of implementation to ensure they are ready to support families access FamilyBoost." 

National's fiscal plan released prior to the election costed the policy at $996 million over four years after considering ECE attendance data, childcare costs, and existing subsidies. 

The Coalition in December reversed the previous Government's decision to offer 20 hours of free ECE to two-year-olds, but continued with a 4.6 percent increase to funding rates announced in last year's Budget.  

FamilyBoost contributed to National's pre-election promise of tax relief of up to $250 per fortnight for a family with children on the average household income of $120,000. However, Newshub revealed last year that only about 3000 households would actually receive the maximum overall tax cut.