Working for Families Tax Credits – are you eligible?

Working for Families was introduced in 2004. It is designed to ensure that all New Zealand families have adequate income, and to support parents who are in paid employment. If you have dependant children of 18 years or under (dependant means they are supported by you, and are not in paid employment), you may be eligible for Working for Families tax credits, particularly if you are in a lower income bracket. Whether you are in paid employment or on a benefit, you are probably entitled to Working for Families tax credits if your annual income is under $70,000. You may also be able to get pre-school and Out of school Care and Recreation (OSCAR) subsidies, and help with housing costs. What assistance you can receive depends on your family situation. There are four types of payments: • Families with dependent children, whether they are on a benefit or in paid employment, may be eligible for Family tax credits. This is based on the number of dependant children and what ages they are. Families on lower incomes from employment will receive an amount to bring their wages up to at least the minimum income level. • Where the parents work a minimum of 30 hours per week between them (or 20 hours for sole parents), the In-work tax credit may apply. • If your net family income is $22,568 or less, and so long as you work at least 30 hours between you (or 20 hours for a sole parent), you may be eligible for the Minimum family tax credit which ensures that working families earn a minimum annual income of $434 per week after tax. • Parental tax credit of up to $150 a week is paid for eight weeks after your baby is born, to assist with the costs of a newborn. You can not receive this if you are also receiving paid parental leave. Household income is assessed for these credits, which means all the income from up to two adults in any family with dependent children. Working for Families is delivered by Ministry of Social Development (MSD) and Inland Revenue (IRD). It replaces the Family Assistance Scheme. If you are on an income-tested benefit, MSD will probably pay your tax credits. If you are in paid work, IRD will probably pay it. All tax credits are paid to the principal child carer – the person who mainly looks after the child. In a nutshell, around three quarters of New Zealand families qualify for financial assistance under the Working for Families package. Most households earning up to $70,000 per year and many families earning more than this receive Working for Families. To find out if you qualify speak to a registered tax agent.