Families are missing out on childcare rebates because of redundancy payouts. Photo: RNZ / Nate McKinnon
When Ben Moore received a redundancy payout when he lost his job as a journalist recently, he didn't think about the wider effects it might have.
He had been eligible for FamilyBoost payments, which offer a rebate of up to 25 percent of a family's childcare fees to a maximum of $975 per three months. To qualify, households have to earn less than $45,000 a quarter.
But Moore's payout put his family over that level for the quarter, and they had their claim declined.
"The money I got because I lost my job is being used to deny my family financial support for childcare."
He said his family missed out on about $640.
"We use the FamilyBoost payments to keep up with rego and road user charges so that had to just come out of the redundancy pay instead.
"I can understand bonuses, dividends or selling shares impacting it, but redundancy payments? It just feels kind of cruel."
Robyn Walker, a tax partner at Deloitte, said this sort of issue had been anticipated when the scheme was introduced.
"Part of the design of the rules was that each payment is 'full and final' so at least there is no recourse to ask for previous payments back."
An Inland Revenue spokesperson said a household's entitlement was calculated for each three-month period.
"If the household income is over $45,000 for the quarter the claim will be declined.
"If a redundancy payment is received in a quarter, and this increases the household income to over $45,000, no FamilyBoost would be paid for that quarter. If the household income is less than $45,000 in other quarters they may be eligible for FamilyBoost.
"We capture the reasons for FamilyBoost claims being declined, including cases where the income is over the threshold for the quarter, however the income isn't broken down to include if a redundancy payment is included in the income."
Between the time that registrations opened and 9 April, Inland Revenue had declined 24,211 claims and of those 17,029 were because the household income was over the threshold.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
