How Perrottet's kids housing, education funds will work
The Liberal party has announced a new plan to help young people cope with spiralling house prices and student debt.
If the Coalition is elected, all children under 10 in NSW will be eligible for a Kids Future Fund which the government will contribute to and can be accessed after they turn 18.
Premier Dominic Perrottet personally helped develop the plan, which is expected to cost the government $850 million over four years.
How does it work?
*The government will contribute an initial starting investment of $400 to the funds.
*Parents and carers can then choose to add up to $1000 each year, which the government will match with further investments of up to $400.
*If parents make a contribution of $400 each year, alongside the Government's co-contribution, the fund is expected to be around $28,500 by the time the child turns 18.
* If parents contribute the maximum amount of $1000 per year, the fund is expected to be around $49,000.
*The amounts are based on an assumed interest rate of 7 per cent a year for the next 18 years.
*Children whose families receive the Commonwealth Family Tax Benefit A, will automatically receive a $200 government contribution which will be matched with a further $200, without requiring additional payments by parents.
*Parents will not be eligible for any tax concessions on their contributions.
What can the money be used for?
*From when a child turns 18 they will be able to draw down on the fund for expenses related only to housing or education.
*Examples include a contribution towards purchasing a residential property, university fees, or other education-related expenses such as textbooks, laptops and private tuition.
Who is eligible?
*The fund will be open for children aged up to 10 years old in the 2023 calendar year. From 2024, new accounts will only be created for newborns.
*The funds would be on an opt-in basis and parents and carers can apply for through Service NSW.
*Contributions can be made to the fund after the child turns 18, however the Government will not provide any further matched contributions.
*If a child leaves the state, contributions would stop but they can still access the fund when they turn 18.
*The money will effectively be in the control of the Government until the child turns 18, with the funds structured in such a way to not incur individual tax implications for children before they turn 18.
*There are around 974,000 babies and children aged up to 10 years old in NSW in 2023.
*There are around 100,000 babies born in NSW each year.