Payment of the WINZ childcare subsidy is made to the early childhood service and not families. Parents can expect therefore to have the subsidy amount deducted from the fees they would ordinarily pay.
Eligibility for the childcare subsidy depends on the level of family household income. It is provided for up to 9 hours a week where the parent/ caregiver is not working and up to 50 hours a week where the parent/caregiver is working or in training. In most cases families are not eligible for the Childcare Subsidy for more than 9 hours a week if the child’s other parent/s or caregiver can care for them.
It is available for children up to 5 years of age (or over 5 if they’re going to a cohort entry school). Children on a Child Disability Allowance are eligible for the Childcare Subsidy up to their 6th birthday.
Families getting the Early Learning Payment because their child is enrolled in a Family Start or Early Start programme and aged 18 months to 3 years, can’t get the Childcare Subsidy for the same hours. From 1 April 2023 the maximum hourly rate for the Early Learning Payment per child is $9.09. The maximum weekly payment (20 hours) for each child aged 18 months to 36 months $181.80
Families whose children are aged 3 to 5 years and attend a service that receives 20-Hours ECE funding cannot get the Childcare Subsidy for the first 20 hours even if the service charges a “fee” (i.e., ‘optional’ payment) as many services do. Families can however ask their ECE service not to include their child in their claim for 20-Hours ECE funding, so the WINZ subsidy can be applied – but we advise families to first check if they would be better off under the childcare subsidy rates or not.
The Childcare Subsidy rates from 1 April 2023 are as follows:
| Payment Rate | Number of children | Gross weekly total household income before tax | Amount per hour non-taxable | Amount per week maximum up to 50 hours non-taxable |
| Rate 0 | One | Less than $1,009 | $6.10 | $305 |
| Rate 1 | One | $1,009 to $1,836.99 | $4.86 | $243 |
| Rate 2 | One | $1,837 to $1,989.99 | $3.40 | $170 |
| Rate 3 | One | $1,990 to $2,143.99 | $1.90 | $95 |
| Nil | One | $2,144 or more | Nil | Nil |
| Rate 0 | Two | Less than $1,160 | $6.10 | $305 |
| Rate 1 | Two | $1,160 to $2,112.99 | $4.86 | $243 |
| Rate 2 | Two | $2,113 to $2,280.99 | $3.40 | $170 |
| Rate 3 | Two | $2,281 to $2,449.99 | $1.90 | $95 |
| Nil | Two | $2,450 or more | Nil | Nil |
| Rate 0 | Three or more | Less than $1,299 | $6.10 | $305 |
| Rate 1 | Three or more | $1,299 to $2,357.99 | $4.86 | $243 |
| Rate 2 | Three or more | $2,358 to $2,556.99 | $3.40 | $170 |
| Rate 3 | Three or more | $2,557 to $2,755.99 | $1.90 | $95 |
| Nil | Three or more | $2,756.00 or more | Nil | Nil |
The rates from 1st April 2022 to 31 March 2023 were as follows:
| Number of children | Gross weekly total household income before tax | Childcare Subsidy (per hour, per child) | Childcare Subsidy (per week, per child for 50 hours) |
| One | Less than $838.00 | $5.69 | $284.50 |
| One | $838.00 to $1,256.99 | $4.53 | $266.50 |
| One | $1,257.00 to $1,360.99 | $3.17 | $158.50 |
| One | $1,361.00 to $1,465.99 | $1.77 | $88.50 |
| One | $1,466.00 or more | Nil | Nil |
| Two | Less than $963.00 | $5.69 | $284.50 |
| Two | $963.00 to $1,444.99 | $4.53 | $266.50 |
| Two | $1,380.00 to $1,489.99 | $3.17 | $158.50 |
| Two | $1,490.00 to $1,599.99 | $1.77 | $83.50 |
| Two | $1,600.00 or more | Nil | Nil |
| Three or more | Less than $1,079.00 | $5.69 | $284.50 |
| Three or more | $1,079.00 to $1,612.99 | $4.53 | $266.50 |
| Three or more | $1,613.00 to $1,748.99 | $3.17 | $158.50 |
| Three or more | $1,749.00 to $1,884.99 | $1.77 | $88.50 |
| Three or more | $1,885.00 or more | Nil | Nil |
Parents
Check with WINZ for more information or to confirm eligibility.
Service Providers
Additional claim information and advice on managing arrears is available for ECE Services on our website.
News Story “Childcare Subsidy Changes”
November 7, 2022.
The income thresholds for families to qualify for the WINZ childcare subsidy are to be lifted from 1 April next year, as well as subsidy amounts.
Prime Minister Ardern said this will help to tackle the cost-of-living crisis for families and give more parents, especially mothers, the choice to return to paid work by making childcare more affordable.
The lift in income thresholds is long-overdue – the number of children supported has dropped from 50,000 in 2010 to fewer than 25,000 this year. Many more families will now qualify.
Radio NZ Checkpoint programme: “The government’s touted its $189 million boost to childcare subsidies as a way to get more parents into full-time work, and to fill labour shortages. But some parents are dubious it’s worth a return to the workforce – and if it will it put extra money in their pockets. Our reporter Katie Todd has been crunching the numbers.”
Will the increased subsidies help parents get back to paid work?
Maybe not. NZ already has a record level of female participation in the workforce, so any increase in work resulting from the subsidy is likely to be quite small. Those that want to be in paid work have mostly found a way to do it, and there’s no shortage of jobs and employers at present willing to be flexible about hours of work. So come 1st April next year, we do not expect to see a sudden increase in enrolment numbers in early childhood education and care.
Will the subsidy increase help parents with the cost of living?
One thing to note is that Government has no control over childcare fees. Services set their own fees.
By the time the subsidy increases take effect in April of next year, any ECE service that wants to, may well have raised its fees, effectively wiping out any, or all, potential fee reduction from the subsidy increase.
But families who previously didn’t qualify for the subsidy because they earned too much will likely enjoy some very welcome fee reduction.
What else is needed?
Pay parity for early childhood teachers with schoolteachers needs to be delivered or there are not going to be the teachers to work in the early childcare and education services.
Ardern said that Free ECE for all is her big wish. So why the Labour Government does not deliver on its promise of providing 20 Hours Free ECE (read “a broken promise”) is a mystery.
Ardern also said that she wants parents to “stay home and be a primary caregiver if they choose to”. But if the government honestly supported this, then we would see the subsidy going to parents, to give parents financial choice to care for their child or to use it for childcare.
