Childcare Assistance fact sheet

The information on this page was dated March 2010 and is no longer current.

Childcare Assistance provides financial support for childcare and out of school care. The level of support is based on a person's income and the number of children they have. The term Childcare Assistance includes Childcare Subsidy for pre-school children, and Out of School Care and Recreation (OSCAR) Subsidy for children aged 5 to 13.

Why are we making changes to Childcare Assistance?

Childcare Assistance has become less targeted over the last five years. The income thresholds have more than doubled since 2004, and now families earning up to $99,320 can qualify for this assistance.

Financial support should be targeted to the people who need it most, and in the current financial climate providing support to people on this income level cannot be justified.

The proposal is that income thresholds for childcare assistance return to 2008 levels and there will be no further regular adjustments in line with inflation. This change will mainly affect two-earner couples on higher incomes.

The hourly subsidy rate is not changing.

The new income limits for Childcare Assistance from 27 September 2010 are shown in the table below:

*for simplicity, only the income limit at which people are no longer eligible for CCA is shown in this table

Over the next four years, these changes will save approximately $57 million.

Other changes being made will make it easier for providers to become OSCAR programmes. The changes will allow home-based and small scale providers to enter the market. Grant funding will be targeted to encourage provision in the areas where it is most needed. This is an additional investment of $4 million over 3 years.

What will change for people receiving Childcare Assistance?

• Anyone receiving Childcare Assistance, or who has received it in the year to 27 September 2010, will continue to receive Childcare Assistance under the old income thresholds for up to three years if they still meet other qualifications.
• The amount they receive will continue to be based on the current rules.
• The new income thresholds will mean that around 95% of sole parents would be eligible for Childcare Assistance on income grounds.

Who will not be able to receive Childcare Assistance?

• Some new applicants will no longer qualify for Childcare Assistance and some will qualify for a lower hourly rate.
• Based on current receipt of Childcare Assistance, we estimate that 9,120 people per year will receive less assistance, and 2,137 people will not be eligible for any.
• The group affected are higher income, mostly couple, families.

Who's eligible for Childcare Assistance?

The hourly rates of payment and income thresholds are the same for both the Childcare Subsidy and OSCAR. Childcare Subsidy is available for up to 9 hours where the parent is not working and up to 50 hours where the parent is working or training. OSCAR is available for parents working or training for up to 20 hours in term time, and up to 50 hours outside term time.

A person may get a Childcare or OSCAR subsidy if they:

• are the main carer of a dependent child
• don't have a partner who can provide childcare
• are a New Zealand citizen or permanent resident
• normally live in New Zealand and intend to stay here.

For Childcare Subsidy the child must be:

• under five years old (or under six years if you get a Child Disability Allowance for them)
• attending an early childhood programme for three or more hours a week.

For OSCAR subsidy the child or young person must be:

• aged five to 13 years old (or up to 18 years if you get a Child Disability Allowance for them)
• attending a CYF approved OSCAR programme for three or more hours a week
• normally live in New Zealand.

How much Childcare Assistance do people get?

Childcare Assistance is paid direct to providers at one of three rates of payment.  The payment rate is determined by the household's income and number of children. The table below sets out the April 2010 rates and proposed weekly income thresholds from 27 September 2010.

Important statistics about OSCAR

• Out of School Care and Recreation (OSCAR) is the main type of care available for school-age children. At the end of June 2009 there were 11,000 OSCAR subsidies being paid.
• Currently there are approximately 1,400 approved OSCAR programmes and 790 unapproved programmes. Forecast Crown Expenditure for OSCAR assistance grant funding for 2009/10 is $16.5 million.
• Other changes being made will make it easier home-based and small scale providers to become OSCAR approved. Grant funding will be targeted to encourage provision in the areas where it is most needed. This is an additional investment of $4 million over 3 years.