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

Gordon Campbell:
On The Last Rites For The TPP

The Trans Pacific Partnership trade deal is one of those litmus issues that has always had more to do with one’s place on the political spectrum than with any imminent reality.

To date, the Greens have opposed (a) a wide range of the leaked content of the TPP (b) the secretive way it has been negotiated and (c) the undemocratic way in which any final document would be ratified. Labour has shared some of those concerns, but while remaining generally supportive of the deal itself.

National has, for its part, been very enthusiastic about the TPP, while still giving assurances about Pharmac being protected... For the TPP’s friends and foes alike though, the end now seems nigh. More>>

 
 

Gordon Campbell: On The Farcical Elevation Of David Seymour

With the election won, it’s time to find jobs for the boy. David Seymour is the Act Party’s latest scrounger to be rewarded by the National Party, and not only with a seat in Parliament. More>>

ALSO:

As Key Mulls Joining ISIS Fighting: McCully Speech To UN Backs Security Council Bid

It is an honour to address you today on behalf of the Prime Minister and Government of New Zealand. Our General Election took place last week - our Prime Minister Rt Hon John Key is engaged in forming a government and that is why he is unable to be here in New York... More>>

ALSO:

Labour: Cunliffe Triggers Party Wide Leadership Contest

David Cunliffe has resigned as Labour Leader, but says he will seek re-election... If there is any contest the election will have to go through a process involving the party membership and union affiliates. More>>

ALSO:

Flyover Appeal: Progress And Certainty, Or Confusion And More Delays?

Lindsay Shelton: The Transport Agency, embarrassed by the rejection of its flyover alongside the Basin Reserve, says it’s appealing because the decision could “constrain progress.” Yet for most clear-sighted Wellingtonians a 300-metre-long concrete structure above Kent and Cambridge Terraces would in no way be seen as progress… More>>

ALSO:

Gordon Campbell: On Cunliffe’s Last Stand

Right now, embattled Labour leader David Cunliffe has three options. None of them are particularly attractive for him personally, or for the Labour Party... More>>

ALSO:

Key Seeking 'New Ideas': Look To Children’s Commissioner On Poverty - Greens

John Key should not reinvent the wheel when it comes to ideas for tackling child poverty, and instead look to the recommendations of the Children’s Commissioner’s Expert Group on Child Poverty, Green Party co-leader Metiria Turei says. More>>

ALSO:

'Safe To Re-Enter' - OIA Docs: Safety Is Absolute Priority At Pike River Mine

“We understand that the time it is taking to complete our evaluation of the risks is frustrating for the family members and we are trying to complete this work as quickly as we can,” Ms Dunphy says. “It is Solid Energy’s responsibility to make this decision and we will do so, once we have all the information required to make a fully-informed decision.” More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
More RSS  RSS
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news