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Children and families gain under Government’s policies

Children and families gain under Government’s policies

The Government is delivering on its promise to help low- and middle-income families with children, and to reduce child poverty.
“Caring for children is one of the most important things people can do. The Government is recognising this with a package of new support for parents and caregivers,” says Minister for Children Tracey Martin.

The Government’s Families Package being announced today includes a boost to Working for Families and the introduction of a Best Start payment for newborns. These changes will help ensure all children have the best start in life, and provide vital financial support for people struggling to balance work while raising a family.

“As part of improvements to Working for Families, the Family Tax Credit rates will be simplified to a single eldest child rate and a single subsequent child rate – with substantial increases,” says Minister for Social Development Carmel Sepuloni.

“The eldest child rate will increase to $5,878. At present it is $5,303 if the eldest child is aged 16-18, and $4,822 if the eldest child is aged 0-15.

“The Orphan’s Benefit, Unsupported Child’s Benefit and Foster Care Allowance will also be increased by $20.31 a week. This means they receive the same increase as those getting the eldest child Family Tax Credit for children aged 0-15.

“While Working for Families payments currently reduce once a family earns over $36,350 a year before tax, from 1 July 2018 a family can earn up to $42,700 before the payment begins to abate,” says Carmel Sepuloni.

“The Government is also introducing a Best Start payment of $3,120 per child ($60 a week) for the first year, providing extra help to the parents of the estimated 65,000 newborns each year. For low- and middle-income earners, that support will continue until their child turns three,” says Tracey Martin.

The changes will come into effect on 1 July 2018.

“These are affordable because we have rejected National’s tax cuts, which would give $440 million a year to the top 10 per cent of income earners while children and their families missed out,” says Carmel Sepuloni.

Ministers Sepuloni and Martin say that over the next five years the Government will put $2 billion in new funding towards Family Tax Credit changes and $1.14 billion towards Best Start.

“Along with the other Families Package initiatives, these changes will provide higher incomes for families and better care for kids. We are focused on ensuring children get the best start in life, and that our welfare system doesn’t leave families without support,” says Tracey Martin.

Editor’s note:
The table below shows the impact of the Family Tax Credit changes, which will be effective from 1 July 2018.

Table: Annual rate of Family Tax Credit
Current 1 July 2018
Eldest child, 16-18 $5,303 $5,878
Eldest child, 0-15 $4,822
Subsequent child, 16-18 $4,745 $4,745
Subsequent child, 13-15 $3,822
Subsequent child, 0-12 $3,351
Working for Families (WFF) abatement rate 22.5% 25%
WFF abatement threshold (before tax) $36,350 $42,700

Best Start will be available to all families with a baby born on or after 1 July 2018, and to families with a baby born earlier if they had an expected due date of 1 July 2018 or later.

For families receiving paid parental leave, the payments will begin after the leave period ends.

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