Tax Updates: 14 July 2025

Welcome to this week’s review of tax issues where Richard comments on what’s been happening in the world of tax over the past week. If you have a question or would like a second opinion on any national or international tax issues, please contact Richard via email at richard@gilshep.co.nz.

Proposed changes to FamilyBoost

For those of you not already aware of the benefit, FamilyBoost is a childcare payment to help eligible households pay for the cost of early childhood education. It enables you to claim up to 25% of your weekly childcare fees, or a maximum of $975 every 3 months. The scheme has a maximum annual household income threshold, which is presently $180,000, and an abatement rate of 9.75%, which is triggered once household income exceeds $35,000 per quarter.

For the quarter commencing 1^st July 2025, it is proposed to:

• Lift the threshold for maximum eligible income from $45,000 to $57,286 per quarter ($180,000 to $229,100 annual household income).

• Increase the amount that an eligible family can claim from 25% of early childhood education costs to 40% or a maximum of $1,560 (up from $975) each quarter; and to,

• Slow the abatement rate from 9.75% to 7% for household income over $35,000 per quarter.

If the proposed changes are passed into legislation, the new rules would apply to invoices for the 1^st July to 30^th September quarter and could be claimed from 1^st October 2025.

Consideration is also to be given to further improvements to the scheme, including having fee information provided directly to Inland Revenue (IR) by early child education providers.

This article was originally published through the ‘A Week In Review’ newsletter. If you would like to receive Richard’s tax updates every Monday morning, you can subscribe here.