Parents of new and young children are the biggest winners in
the 2014 Budget, which delivers a $500m package to extend
paid parental leave by four weeks, extend free GP visits to
under 13s, and increase parental tax credits for lower income
But the boost to parents are not available straight away - it
will not kick in until the middle of next year, after the
election, and National's package is about one third of what
is on offer to parents from Labour.
Paid parental leave will increase from 14 weeks to 16 weeks
and then up to 18 weeks in 2016. The criteria for eligibility
will also change so many permanent guardians, casual and
seasonal workers and those who have recently changed jobs
also qualify for it. That change is expected to mean about
1400 more parents qualify for it. On average, about 26,000
parents are on paid parental leave each year.
The cost of the increases and changes to eligibility was $172
million over four years. The rules would also be made more
flexible to allow parents on leave to take part in employer
training and planning days, or work occasionally without
losing their entitlements.
Finance Minister Bill English said the $500m package put
young parents "at the heart'' of the Budget.
He denied it was simply a bid to try to capture middle-income
votes, saying compared to Labour's package, his Budget
pledges were sustainable, more targeted and affordable.
"We know financial pressure is the man reason parents return
to work earlier than they would like after having a baby.
Extending paid parental leave in a responsible and affordable
way makes it easier for parents to take more time off work,
if they choose to.''
About 15,000 parents on modest incomes who do not qualify for
paid parental leave will also benefit in an increase to the
Parental Tax Credit from $150 a week to $220 a week. The
period for which it is paid will also increase from 8 to 10
weeks after the birth of a child. It is the first lift to the
credit since it was introduced in 1999.
Social Development Minister Paula Bennett said the changes
would mean about 1200 more low-income families would better
off taking the credit rather than paid parental leave because
it would be worth more.
However, the Government has also significantly raised the
abatement rate for the payment, so about 400 families on
higher incomes would no longer qualify.
There was no extra payment for beneficiary parents, but the
Government's package included $33.2m next year to work with
vulnerable children, including setting up children's teams to
identify at risk children, work with their families, screen
those who worked with children and support children in care.
There was also an extra $156m over four years for early
The Budget will also see an extra $30m a year go toward
extending free GP visits and free prescriptions to all
children under 13, if their GP opts in. It currently applies
only to those aged under 6, and the change is expected to
benefit about 400,000 more children.
The Government's $500m package is a counter to Labour's $1.5
billion 'Best Start' package which lifts paid parental leave
to 26 weeks and introduces a new $60 a week payment for
parents who are not on paid parental leave.
That applies for the first year of a baby's life where the
parents earn less than $150,000, and continues for two more
years for low-income parents. Labour's package also increased
early childhood education subsidies and maternal and newborn
Paid parental leave:
- lifts from 14 weeks to 16 weeks in 2015 and 18 weeks in
2016. Cost: $141m over four years. Affects: 26,000 new
parents each year.
- expanded to include many casual and seasonal workers, those
who change jobs just before having a baby and permanent
guardians. Cost: $31m over four years. Affects: 1200 parents
- Will be more flexible to allow new parents to attend
training or planning days, or work an occasional day.
Parental Tax Credits:
- increase from $150 a week to $220 a week but abate more
- paid for 10 weeks (up from 8 weeks) after a baby's
Affects: about 15,000 parents on mid-low incomes who don't
get paid parental leave.
Free GP visits for under 13s from July 1, 2015. Affects:
400,000 children. Cost: $90m
Early Childhood Education: $156m to meet cost pressures in
early childhood centres.
$33m next year for 'children's teams' to work with vulnerable
children, and screen people who work with children.