Mixed reaction from parents on childcare promise

Lynaire Kittelty, here with daughter Lila, said a $1650 per year childcare rebate was welcome, but not all agree. Picture / Greg Bowker

National's promise of a $1650 yearly rebate in childcare costs has found favour with mother Helen Fleming.

Mrs Fleming and her partner both work full-time, so their 2-year-old son attends a daycare centre five days a week. They pay $180 a week in childcare and for that, they have been claiming the currently offered housekeeper rebate of $310 a year.

"That's nothing. We don't qualify for family assistance and everything is out of our own pocket. It's not cheap to do this on our own."

"If you spend $5000, and you can get back $1650, that's a big help."

Personal assistant Lynaire Kittelty agreed. "Paid childcare's a part of life now. People haven't got the financial option to stay at home."

Ms Kittelty and her engineer partner pay $188 a week in childcare for 7-month-old Lila while she works three days a week.

She works because she wants to be "more than just a mum" and has not claimed any existing rebates that could be available.

Like Ms Kittelty, mother of two Suzy Watson's decision to work part-time comes at a high monetary cost.

It costs $330 a week for the food analyst and her sales manager partner to send 4-year-old Callum and 1-year-old Ethan to day care three days a week while she's at work.

Her decision to work was not motivated by extra income.

"It's significantly eroded, anyway, when you have to pay for childcare."

Not all were convinced of National's first tax promise.

One mum, who wanted to remain anonymous, thought it was electioneering. She said it would mean money would have to be taken away from something else, like health.

Single mum Nicki Steers was also less enthusiastic. "The weekly refund works out to be less than a day's cost of day care."

The research analyst spends $140 a week on childcare for her 3 and 1-year-old children. But as she works part-time, she's also entitled to a $36 childcare benefit per week.

Ms Steers said she'd be calculating to see if she'd be better off claiming the rebate, or continuing to receive the childcare benefit.

The primary teachers union, the Educational Institute, said National's policy was unfair because it discriminated against children whose parents were not working.

"They don't get a tax break, and their children are denied access to free early childhood education," national president Colin Tarr said.

He said National's tax cut "will only benefit parents who are working, and in particular those who are on higher incomes". It would be fairer to provide free education to all families at community-based early childhood centres. 


CASE 1: SARAH AND MARK 

National says

Couple have one 3-year-old child, both work full-time and have a joint family income of $80,000 before tax. Not eligible for a childcare subsidy. Spend about $180 a week on childcare at annual cost of $8820. Family wins $1650 tax credit.

Labour says

Under National Sarah and Mark are eligible for a $1650 tax credit. Their net childcare costs are $7170. Under Labour they will get 20 hours' free childcare if they go to an approved centre so they pay $4.50 for the remaining 20 hours a week for a total cost of $4410 a year. They are $2760 better off with Labour.

Comment

Labour's right but if the couple had a 2-year-old they're better off under National (for a year). Choice of "childcare" also restricted under Labour.


CASE 2: BRAD AND JENNY

National says

Pair have two preschoolers. Brad works full-time and Jenny part-time. Joint family income of $60,000 before tax. Not eligible for a childcare subsidy. Preschoolers attend a local education and care centre costing $72 each a week. Total childcare bill is $3744 per child per year. Get a $1236 tax rebate for each child, worth a total $2472.

Labour says

Brad and Jenny would take up community-based early childhood education to take advantage of the 20 free hours policy. Under National, their net childcare cost after rebate is $5016. Under Labour, Brad and Jenny are eligible for 20 hours of free childcare per child so they pay nothing for childcare. Brad and Jenny are $5016 better off with Labour.

Comment

Labour supposes kids are both 3 and 4 so will get free care. It assumes they pay $4.50 an hour per child for 16 hours and want to move their child to approved centre.


CASE 3: SANDRA

National says

Sandra is a sole parent with one preschooler. She works fulltime and earns $45,000 a year before tax and uses both a creche and a home-based carer. She is eligible for a childcare subsidy when her child is at the creche. Total out-of-pocket childcare expenses are $98 a week, meaning she spends $5138 a year on childcare. Sandra wins a $1650 tax credit.

Labour says

Under Labour Sandra might be able to remove some of her creche expenses by taking up community-based early childhood education to use the 20 free hours policy. But she will also be eligible for an (abated) In Work Payment through Working for Families which will means she is $41 a week, or $2134 a year, better off. She is $484 better off with Labour.

Comment

Labour assumes National will axe In Work Payment, but National finance spokesman John Key yesterday rejected that, saying it would stay, making her better off with National.