3 Jul 2009

Govt considered cuts to family entitlements

4:08 pm on 3 July 2009

The National-led Government considered effectively cutting entitlements to the Working for Families tax credit and paid parental leave, according to official papers released on Friday.

The proposal was pushed strongly by the Treasury but ditched in the lead-up to the Budget on 28 May.

The Treasury suggested the Government stop the automatic indexation of the family tax credit income thresholds, paid parental leave and childcare assistance payments.

Stopping the indexation of income thresholds at which family tax credits applied would have meant a couple with two children, earning just above the average wage, would be $7.75 a week worse off.

The change, together with others, would have saved the Government $229 million over four years.

The proposal was rejected by the Finance Minister Bill English and never got to the Cabinet.