Don’t let finances be the reason for your sleepless nights
Babies are expensive, and sometimes that expense puts families in an almost impossible financial situation. How would you cope if you were pregnant and lost your job, or you unexpectedly found out you were having a baby you weren’t financially able to care for? Having that extra mouth to feed could mean you can’t meet your day to day living costs, or it could leave you without a roof over your head. There’s a lot of government support available but often the information is hard to digest, so here I’d like to break down some of the main avenues for assistance. Life throws us curve balls and families shouldn’t feel like they’ve been left to fend for themselves.
For the purposes of this article I have assumed you are (or have recently been) employed, you’re over 19 years of age, and your children are under 5 years of age. There are additional channels of support for those who are not employed, are young parents, or have older children.
PPL is a government-funded entitlement paid to eligible mothers and other primary carers. These payments go towards the loss of income when they take parental leave or stop working to care for a new-born, and they cover the first 18 weeks of a baby’s life.
The IRD website has the most up to date PPL payment information, but as of September 2017 PPL payments equal your normal pay up to a current maximum of $538.55 a week before tax. You'll receive the average of your highest 26 of the last 52 weeks of earnings up to the date the child arrives in your care.
This is a payment that helps families with the cost of pre-school childcare. Work and Income New Zealand (WINZ) normally pay for up to 9 hours of childcare each week if you're not working, studying or training, but in certain circumstances you may be entitled to up to 50 hours a week if you are in employment or studying. The number of hours you may be entitled to depends on the size of your family, your income, and how many hours a week your child goes to the childcare provider.
If your child is three or four years old, you can get up to 20 hours a week of subsidised early childhood education (ECE) provided by the Ministry of Education. You can choose to use as many or as few hours of 20 Hours ECE as you want, up to 6 hours a day and 20 hours a week.
Tip: Childcare costs vary dramatically depending on the type of care and the location. Our article Know what to Expect Before you’re Expecting gives a general outline to some of these costs.
Family Tax Credits
There are four types of Working for Families Tax Credits. You may qualify for more than one.
Family tax credit (FTC) is a payment for each child you care for and the amount of family tax credit you are entitled to depends on, your annual family income, the number of children you have, and how old they are. For your first child under 16 years of age you could be entitled to a credit of $92 per week.
The IRD website has a Family Tax Credits calculator to help you estimate how much you may be entitled to.
As the title suggests, In-work tax credit (IWTC) is an entitlement for families who are in paid work. To qualify for in-work tax credit you must be in paid work for at least 30 hours each week as a couple, or 20 hours each week as a single parent. Occasional work is a grey area, so it’s best to get in touch with the IRD to find out if you meet their criteria for this credit.
Visit the IRD website to try out their Family Tax Credits calculator which can help you estimate how much you may be entitled to.
Minimum family tax credit (MFTC) is a payment made to families with dependent children, who are on a low income.
As with the In-work tax credit you must be in work for at least 30 hours each week (for a couple), or 20 hours each week as a single parent, but here you must also earn below the annual income threshold as set by the IRD. For the year ending March 2018 minimum family tax credits top up a family's annual income (after tax) to $23,816 a year ($458 per week).
Check out the IRD Family Tax Credits calculator to estimate how much you may be entitled to.
This tax credit helps parents who have just had a baby or adopted a baby at birth. This credit offers up to $220 a week for the first 10 weeks of your baby’s life, but as always eligibility is means tested, and based on other benefits you may already be receiving.
You can calculate how much you may be entitled to by using the IRD’s Family Tax Credits calculator.
WINZ has a programme in place that can assist with the cost of home help to complete household tasks normally performed in the home, such as cooking, cleaning, or doing the laundry. This programme is specifically for parents who have had a multiple birth from the same pregnancy, i.e. twins, triplets etc. Parents of twins can get 240 hours, to be used within 12 months. Those who have given birth to triplets or more are entitled to 1560 hours, to be used within 24 months.
If you can provide evidence that you're suffering significant financial hardship, you may be able to withdraw some or all of your KiwiSaver savings. Inland Revenue has strict criteria for those who apply for financial hardship and applicants must prove they have explored other reasonable avenues of funding before reaching out.
For new parents, grounds for significant financial hardship may include being unable to meet minimum living expenses or being unable to meet mortgage repayments on the home you live in.
The above is not an exhaustive list of support options, and all are dependent on specific eligibility criteria – your individual circumstances will determine how much assistance you are entitled to.
You deserve to be looked after
As a Plunket family, we'd like to offer you special deals from BNZ with our Plunket Baby Bundle Offer.