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

 


Budget boosts parental tax credit for families

Budget boosts parental tax credit for families

The Government is extending the parental tax credit to help many lower- and middle-income families at a time when they most need it - the birth of a new baby, Social Development Minister Paula Bennett and Revenue Minister Todd McClay say.

Budget 2014 includes the following changes:
• An increase in the parental tax credit from its current maximum amount of $150 a week to $220 a week.
• An increase in the period for which the tax credit is paid, from eight to 10 weeks following the birth of a child.
• A change to the parental tax credit abatement formula to better target the payment towards lower- and middle-income families. For example, a couple having their second child will not receive any payment if together they earn more than $99,847.

The parental tax credit is available to working families with a newborn child who are not on a benefit and who do not receive paid parental leave.

“A new baby can mean significant financial stress for many families. These changes, along with other family initiatives in Budget 2014, will provide targeted support for some families to help alleviate those stresses and improve child outcomes,” Mrs Bennett says. “The Government takes its responsibility to support families just as seriously as the responsibility to manage the economy.”

Mr McClay says extending the parental tax credit will help support parents during a time of extra financial responsibility.

“The changes to the parental tax credit are part of a wider package of changes to help families with newborns, including increases in paid parental leave.”



Fact sheet – parental tax credit
• Families with a newborn baby can get the parental tax credit (PTC) if they aren’t receiving paid parental leave and they are not on a benefit.
• Around 15,000 families each year currently get the PTC, which the National Government introduced in 1999.
• Families can currently get up to $150 a week for the first eight weeks after the baby is born. Most families getting the PTC receive the full $1,200 payment.
• Rates of payment for the PTC have not increased since 1999.
• Like other Working for Families payments, the PTC starts reducing when a family’s income rises. The income level at which this starts happening depends on the number of children in the family. Above this income level, the PTC reduces by 3.26 cents for each additional dollar of family income.
• More details on current entitlements are available from the Inland Revenue websitehttp://www.ird.govt.nz/wff-tax-credits/entitlement/what-is-wfftc/ptc/
What is changing?
• For babies born on or after 1 April 2015, the Government will increase the PTC from $150 a week to $220 a week, and extend the payment period from eight weeks to 10 weeks.
• This increases the maximum payment under the PTC from $1,200 to $2,200.
• As a result, up to 1,200 additional lower-income families are expected to claim the PTC, because it will pay them more than they would otherwise get from paid parental leave. (People cannot claim both of these payments).
• In addition, the rate at which the PTC reduces will increase from 3.26 cents to 21.25 cents for each additional dollar of family income, to put it in line with the rest of the Working for Families scheme. This change will better target the PTC towards low-to-middle income families, as shown in the following table.
• As a result, around 400 higher-income families who would qualify for the PTC under the current rules will no longer qualify.
Parental tax credit for families with a baby born on or after 1 April 2015
For people having their:
First child Second child Third child
Families can get the maximum PTC payment ($2,200) up to this level of family income, after which payments reduce at 21.25 cents in the dollar $73,724 $89,494 $105,263
PTC payments are reduced to zero at this level of family income $84,077 $99,847 $115,616

Costs of the package
($millions) 2014/15 2015/16 2016/17 2017/18
Costs of existing parental tax credit 15.0 14.0 13.0 12.0
Additional costs from Budget 2014 3.3 13.0 13.0 13.0
Total 18.3 27.0 26.0 25.0

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Parliament Today: State Opening Of Parliament

The House sits at 10.30am today before MPs are summoned to hear the Speech from the Throne in the Legislative Council Chamber.

The speech delivered by the Governor-General on the Government’s behalf outlines its priorities for this Parliament.

After this MPs will return to the House for the presentation of petitions and papers and the introduction of any bills.

The Government has five notices of motion on the Order Paper which can be debated. These relate to relating to the appointment of the Deputy Speaker, Assistant Speakers, the reinstatement of business in a carryover motion and one on “Entities to be deemed public organisations”. More>>

 

Tertiary Education: Students Doing It Tough As Fees Rise Again

The Government is making it increasingly difficult for Kiwis to gain tertiary education as fees continue to rise and access to student support becomes even more restricted, Labour’s Tertiary Education spokesperson Chris Hipkins says. More>>

ALSO:

Housing, Iraq: PM Press Conference – 20 October 2014

Prime Minister John Key met with press today to discuss:
• Housing prices and redevelopment in Auckland
• Discussions with Tony Abbott on the governmental response to ISIS, and New Zealand’s election to the UN Security Council More>>

ALSO:

Labour: Review Team Named, Leadership Campaign Starts

Labour’s New Zealand Council has appointed Bryan Gould as Convenor of its post-General Election Review. He will be joined on the Review Team by Hon Margaret Wilson, Stacey Morrison and Brian Corban.

ALSO:


Roy Morgan Poll: National Slips, Labour Hits Lows

The first New Zealand Roy Morgan Poll since the NZ Election shows National 43.5% (down 3.54% since the September 20 Election). This isn’t unusual, National support has dropped after each of John Key’s Election victories... However, support for the main opposition Labour Party has crashed to 22.5% (down 2.63% and the lowest support for Labour since the 1914 NZ Election as United Labour). More>>

ALSO:

In On First Round: New Zealand Wins Security Council Seat

Prime Minister John Key has welcomed New Zealand securing a place on the United Nations Security Council for the 2015-16 term. More>>

ALSO:

TPP Leak: Intellectual Property Text Confirms Risk - Jane Kelsey

The US is continuing its assault on generic medicines through numerous proposed changes to patent laws. ‘These are bound to impact on Pharmac if they are accepted’, according to Professor Kelsey... Copyright is another area of ongoing sensitivity... More>>

ALSO:

RMA: Smith Plans Reform To Ease Urban Development

Newly appointed Environment Minister Nick Smith has announced Resource Management Act reform to foster urban development, where high land prices and expensive resource consents are blocking efforts to provide affordable housing. More>>>

ALSO:

Gordon Campbell: On New Zealand getting involved (again) in other people's wars

Apparently, the Key government is still pondering how New Zealand will contribute to the fight against Islamic State. Long may it ponder, given the lack of consensus among our allies as to how to fight IS, where to fight it (Syria, Iraq, or both?) and with whose ground troops, pray tell? More>>

ALSO:

Gordon Campbell: On child poverty, and David Shearer’s latest outburst

The politicisation of (a) the public service and (b) the operations of the Official Information Act have been highlighted by the policy advice package on child poverty that RNZ’s resolute political editor Brent Edwards has finally prised out of the Ministry of Social Development. More>>

ALSO:

Gordon Campbell: On the government’s review of security laws

So the Key government is about to launch a four week review of the ability of our existing legislation to deal with “suspected and returning foreign terrorist fighters, and other violent extremists.”

According to its terms of reference, the review will consider whether the SIS, GCSB and Police are sufficiently able right now to (a) investigate and monitor suspected and returning foreign terrorist fighters… More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news