Parliament

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 Why Todd Muller Needs To Own The Privacy Leak Scandal


Whenever a political scandal breaks, party leaders have two basic options. They can confess to being in boots and all, and try to brazen it out : nothing to see here, move on. This tended to be the John Key approach. Very hard to pull that off in this case, given that it involved violating the privacy of sick New Zealanders for party political gain.
The other option is to claim innocence of this terrible, no good, highly regrettable “error of judgement” and apologise profusely for the sins of others, while absolving your own good self of any responsibility. This has been Todd Muller’s chosen path.... More>>
 

National Departures: Press Statement From Michelle Boag

Today I am announcing that I have resigned my membership of the NZ National Party. The last few days have underscored for me the unhealthy relationship I have developed with politics. For 47 years, I have devoted much of my professional and personal ... More>>

ALSO:

Govt: Statement From Rt Hon Winston Peters

Deputy Prime Minister and New Zealand First Leader Rt Hon Winston Peters has announced he is taking a short stint of medical leave this week. More>>


Isolation: Government And Air NZ Agree To Manage Incoming Bookings

Bookings for seats on Air New Zealand flights into New Zealand will be managed in the short term to ensure the Government is able to safely place New Zealanders arriving home into a managed isolation or quarantine facility, says Housing Minister Megan ... More>>

ALSO:

Government: New Investment Creates Over 2000 Jobs To Clean Up Waterways

A package of 23 projects across the country will clean up waterways and deliver over 2000 jobs Prime Minister Jacinda Ardern and Environment Minister David Parker announced today. The $162 million dollar package will see 22 water clean-up projects ... More>>

ALSO:

Government: David Clark Resigns As Health Minister

The Prime Minister Jacinda Ardern has accepted David Clark’s resignation as Health Minister. More>>

ALSO:

Election 2020: Green Party Unveils Income Policy

The Green Party is today unveiling its Poverty Action Plan, which includes a Guaranteed Minimum Income to ensure people have enough to live with dignity. The scheme resets income support payments to ensure everyone not in full-time paid work gets at least ... More>>

ALSO:


Conservation: New Protection For Dolphins

Extensive new protections are being put in place as part of an updated plan to look after New Zealand’s native Hector’s and Māui dolphins, announced Minister of Fisheries Stuart Nash and Minister of Conservation Eugenie Sage today. More>>

ALSO:

Auckland: Water Consent Referred To Board Of Inquiry

Environment Minister David Parker has today “called in” Auckland’s application to the Waikato Regional Council to take an extra 200 million litres of water a day from the lower reaches of the Waikato River for Auckland drinking water and other municipal uses... More>>

ALSO:


Foreign Affairs: New Zealand To Review Relationship Settings With Hong Kong

Foreign Affairs Minister Winston Peters has announced that the New Zealand Government is reviewing the settings of its relationship with Hong Kong. “China’s decision to pass a new national security law for Hong Kong has fundamentally changed the environment ... More>>

ALSO:


Covid-19 Patient Info Leak: Hamish Walker - A Personal Statement And An Apology

I have spoken to National Party Leader Todd Muller and informed him that I passed to members of the media, by email, information containing Covid-19 patient details that was given to me by a source. I did this to expose the Government’s shortcomings ... More>>

ALSO:

PM: Labour Will Extend Loan Scheme 'lifeline' For Small Business

Labour has announced its plans to extend the Small Business Loan Cashflow Scheme and spend $162 million on a waterway clean-up package. More>>

ALSO:

Economy: Infrastructure Investment To Create Jobs, Kick-Start COVID Rebuild

A new package of infrastructure investments will help kick-start the post-COVID rebuild by creating more than 20,000 jobs and unlocking more than $5 billion of projects up and down New Zealand. Finance Minister Grant Robertson and Infrastructure Minister ... More>>

ALSO:

Covid-19: Isolation System To Be Beefed Up After Stress

A range of improvements are already underway to address issues identified in the rapid review of the Managed Isolation and Quarantine system released today, Housing Minister Megan Woods said. The review was commissioned just over a week ago to identify ... More>>

ALSO:

Election 2020: Parties Get Into Gear

ACT has today announced its list for the 2020 General Election. “The calibre and experience of our candidates will impress voters of every persuasion. We have candidates from all walks of life. People who have built their homes, families and businesses ... More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 


 

InfoPages News Channels