Kindies expect busier days as parents eye childcare savings

Childcare savings of up to $6.07 an hour are on the cards for low-income parents next year, figures provided to RNZ show.

The government has touted its $189 million boost to childcare subsidies as a means to fill labour shortages – but some parents are still dubious if it is worth returning to the workforce.

People such as Aucklander Chelsea Osborn-Toor were squarely in the government’s sights when it announced the policy last week.

She said it would cost a cool $400 a week for her three-year-old and her infant to be in full-time childcare.

Osborn-Toor, on maternity leave at the moment, said she had been weighing up if it was worth that cost to go back to work.

“We were actually recently just talking about that, my husband and I. And I think if the payment goes down, I would be more apt to go back full time, because that’s just more for our family,” she said.

Right now a family like Osborn-Toor’s, with two young children, can only get childcare subsidies if their household income is below $87,100 a year.

That threshold is set to lift to about $124,644 in April, reaching more middle-income earners.

A couple with two children earning the average New Zealand household income, which is $110,451 according to Stats NZ, will become eligible for a subsidy of $3.36 per hour, along with 20 hours free ECE for children between three and five years.

According to the website Care For Kids, childcare centres charge an average fee of $298 per child for 50 hours.

That means people in this income bracket could be paying less than half the total cost of their childcare.

Provisional figures provided to RNZ today showed the subsidies were likely to lift to about $6.07 an hour for the lowest income earners – more than required to cover the average childcare fee, for one child.

Households in the next income bracket, ‘level two’ will save about $4.80 per hour, and those in ‘level three’ will save about $3.36 per hour.

People in the highest income threshold, ‘level four’ will save about $1.88 per hour.

The government is expected to confirm the exact figures in 2023 once Consumer Price Index (CPI) data is available.

People in the highest income threshold, ‘level four’ will save about $1.88 per hour.
Photo: Supplied

At Kindercare Randwick Park in Manurewa, manager Justine Matthews said she was pretty excited about the subsidy.

“I’ve had conversations with parents because they’ve just missed out. And that’s pretty heartbreaking,” she said.

She expected a few more bags in cubby holes, more often.

“I’m expecting that parents that possibly come three days, full days, will want to come full-time. There will be more parents. We do get an influx, it will probably double, around January, February when school starts anyway. So I’d expect us to be quite busy around that time,” she said.

But parents at Auckland playgrounds told RNZ they still would not want to send their tots to childcare full-time.

“Working in an average, middle-income New Zealand, $60,000, $70,000 a year, sometimes it’s like, ‘do I just stay home and save those daycare dollars?’ Because when you get sick, you still pay for daycare, you have to take a sick day, and you still have to stay home, look after your child. You’re faced with those decisions as well,” one said.

“Why are we pushing people back to work? Throwing money at people to put [children] in daycare, as opposed to setting it up so they can stay home longer? Some studies show that being at home has better outcomes for children. That’s why we’ve chosen especially to stay home until at least two-and-a-half,” another added.

“I’m a single mum, I already decided I was going to do part-time [work]. So even if I did get more subsidy, I’d still keep to the hours,” another said.

Sarah Alexander from the Office of Early Childhood Education said she had doubts as well.

“Those that want to be in paid work have mostly found a way to do it. And there’s no shortage of jobs out there and employers willing to be flexible about hours. So come April 1 we do not expect a sudden increase in numbers of children in early childhood education,” she said.

Alexander said it was a “very good thing” that more parents would be able to access subsidies.

However, there was no guaranteeing that parents would get the full benefits, she said.

ECE fees are not regulated by the government and any childcare subsidies get paid directly to them – not to the parents.

Alexander said ECEs were currently grappling with short staffing and increased overheads.

“So by the time the subsidy increases take effect, any early childhood service that wants to, may have raised its fees, potentially wiping out any, or all, of the subsidy increases.”

However, the raised subsides could help to ease pressure on ECE staff, making it easier for them to work full time too, she said.

At Randwick Park, teacher Saxon Williams was among those expecting to pocket a bit more.

“It’s probably, a couple of hundred a week, which will be so helpful in the long run. My husband and myself both work,” she said.

“But if I didn’t work where I did, we probably wouldn’t be able to afford for me to work. Because childcare is expensive. Because we’ve got three children so we’re paying for two little ones here and then after school care.”

The government estimated about 7400 additional children would become eligible for subsidies in April.