Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Most will benefit from Working for Families

Friday, 27 January 2006

Three out of four families will benefit from Working for Families

Revenue Minister Peter Dunne said today it won't be long before most New Zealand families will see the benefit of the changes to the Working for Families package.

"Eighty-five thousand New Zealand families will be newly eligible for Family Assistance tax credits as part of the government's $1.6b Working for Families package," he said.

The changes will make a big difference for many working families.

Currently a family earning $45,000 per year with two young children receives Family Assistance of $46 per fortnight. From April 2006 that will increase to $277.

A family earning $60,000 per year with two young children is currently not eligible for Family Assistance but from April they will receive $161 per fortnight.

As part of Working for Families, Family Assistance income thresholds go up on 1 April 2006; the rate at which payments reduce goes down; and In-Work Payment is being introduced to replace and pay more than the Child Tax Credit as a new entitlement for working families.

The Family Tax Credit threshold also increases from $15,080 to $17,680.

"The combined impact of all of the Working for Families changes to Family Assistance will benefit three quarters of all families in New Zealand, including 85,000 families eligible for Family Assistance for the first time from 1 April 2006," Mr Dunne said.

Family assistance includes four types of tax credits and families can qualify for one or more depending on their circumstances. Payments can be made weekly or fortnightly based on a family's income estimate for the year ahead, or in a lump sum after the end of the tax year.

Families can register now with Inland Revenue so Family Assistance payments can start from April 2006.

Further information is available on www.workingforfamilies.govt.nz

Fact Sheet

Changes to Family Assistance from 1 April 2006

Family Assistance is currently made up of four types of tax credits, which are: Family Support, Child Tax Credit (being replaced by In-Work Payment for eligible families from 1 April 2006), Family Tax Credit, and Parental Tax Credit.

Families may qualify for one or more of the tax credits, depending on their circumstances.

Family Support is available to all families with dependent children and can be paid by Inland Revenue to working families or by Work and Income to families who also receive a benefit.

Child Tax Credit, Parental Tax Credit and Family Tax Credit are paid by Inland Revenue and are available only to families in which the principal carer or their spouse or partner meets specific work tests, and are not available to families receiving benefits.

Eligibility for Family Assistance is based on a family's income, the number of dependent children in the family and their ages, and any shared care arrangements.

The changes to Family Assistance that will come into effect on 1 April 2006 as part of Working for Families are:

· An increase in the income threshold at which Family Assistance payments begin to abate from $20,356 to $35,000, so families on higher incomes will qualify and families can earn more before their payments start to reduce.

· A reduction in the abatement rate from 30 per cent to 20 per cent so that payments reduce more slowly as earned income increases.

· The introduction of the new In-Work Payment to replace and pay more than the Child Tax Credit for eligible working parents.

· The In-Work Payment will pay up to $60 per week per family (of up to 3 children), with an extra $15 per child for the fourth and subsequent children.

Eligibility for In-Work Payment is based on hours of work. The hours of work requirements are:

· 20 hours or more per week in a single parent family

· 30 hours or more per week in a two-parent family The Child Tax Credit, which pays $15 per week per child, will be phased out over time, but will continue for current recipients who are not eligible for the In-Work Payment.

The Family Tax Credit threshold will increase to ensure that families have a minimum income of $17,680 (after tax) a year. The Family Tax Credit currently (up until 31 March 2006) tops up families income to $15,080 (after tax) a year.

The combined effect of all the Working for Families changes to Family Assistance is an estimated average gain of $64 per week in Family Assistance across a total of 348,000 families from 1 April 2006.

This is estimated to represent over three quarters of all families.

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Werewolf: What Does Winston Peters Want His Legacy To Be?

A lot of people in New Zealand seem to resent Winston Peters and the power that he appears to have. “Appears” being the operative word. In reality, Peters will have power only up to the point that he uses it.

By next week, he’ll have become just another junior player in an MMP governing arrangement, battling to hold onto the gains he was promised. More>>

 

Rising Toll: Road Safety Needs To Be A Higher Priority

Official advice released to the Green Party under the Official Information Act shows that the previous National Government dismissed an option to make road safety its most important transport priority after being told the road toll was rising. More>>

ALSO:

Wellington.Scoop: Arrests At Blockade Of "Weapons Expo"

“We encourage people in Wellington to get down to the Westpac Stadium now for a day of awesome peace action. There will be plenty of food, music and activities to keep us sustained through the day.” More>>

ALSO:

Rorschach Restructuring: PSA Taking Inland Revenue To Court Over Psychometrics

The Public Service Association will be seeing Inland Revenue in Employment Court over its intention to psychometrically test employees reapplying for their roles at the department as part of its controversial Business Transformation restructuring plan. More>>

ALSO:

Nuclear Disarmament: Nobel Peace Prize 2017 Awarded To ICAN

Congratulations from iCAN Aotearoa New Zealand to international iCAN, the other iCAN national campaigns and partner organisations, and the countless organisations and individuals who have worked so hard for a nuclear weapons-free world since 1945. More>>

ALSO:

Expenses: Waikato DHB CEO Resigns

An independent inquiry has identified that Dr Murray had spent more than the agreed $25K allocated for relocation costs, and other unauthorized expenses involving potential financial breaches of the chief executive’s obligations. More>>

ALSO:

Wellington.Scoop: Sad About The Trolley Buses?

The Regional Council’s MetLink is today spending money to tell us that it really loves Wellington’s trolley buses, even though they’re all being taken off our roads by the end of this month. More>>

ALSO:

Post-Election: Preliminary Coalition Talks Begin

New Zealand First will hold post-election preliminary discussions in Wellington with the National Party tomorrow morning and the Labour Party tomorrow afternoon. More>>

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election