$57 million cut to childcare subsidies

The Government will cut more than $57 million in childcare subsidies from September, it has been reported.

More than 11,000 families will no longer receive childcare subsidies or will get a reduced subsidy under the changes, the Sunday Star Times reported.

The changes include children aged up to 13 in childcare or out-of-school care.

The Government was expected to lower the income eligibility thresholds - the current threshold for a one-child family is $77,272, which will drop to $72,800 from September 27. For a two-child family, it will drop from $88,296 to $83,200, and for families with three children or more it will drop from $99,320 to $93,600.

Social Development Minister Paula Bennett said those on higher income who already received assistance would not be immediately affected because the changes would be rolled out over three years.

"It's worth pointing out as well, that 95 per cent of all sole parents will still qualify for childcare assistance after the changes."

Labour spokeswoman Sue Moroney said the cuts were made worse by the expected increase in GST and the possibility of cuts to the 20 hours free early childhood education scheme.

"All you need is two parents earning around $40,000 each, which is not a high income, and you are losing under this package, so this is not hitting very high-income families, this is hitting middle-income New Zealanders."

Education Minister Anne Tolley said last week the cost of providing the 20 hours free early childhood education had nearly trebled over the last five years and was projected to continue rising at about $200 million a year.

Mrs Tolley said there was unequal uptake, with poor families losing out.

Asked whether she intended means-testing parents, Mrs Tolley said "wait for the budget".

- NZPA

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