Protected Best Start tax credit while getting a main benefit

Best Start tax credit is part of an annual tax system and paid in for children under the age of 3 years.

From 1 April 2026 all three years of the payment are income tested for clients not getting a main benefit. 

Payment is assessed using the family's income from the whole of the tax year. 

Best Start tax credit payments are protected for any month clients are getting a main benefit.

Regardless of the income earned in other parts of the financial year when clients were not getting a main benefit, they will get the maximum Best Start tax credit for each calendar month they were getting a main benefit.

A client who gets a main benefit for a week will have their Best Start tax credit protected for the entire month. Inland Revenue manages the reconciliation of Best Start tax credit and family tax credits while taking into account the protected periods.

Example

A married client with one child born on 1 July 2026.

The client worked for 7 months from April 2027 until the job ended at the end of November 2027 earning $80,000 annually.

The client was granted Jobseeker Support and Best Start tax credit in December 2027 but started another job in February 2022 and earned another $17,500 before 31 March 2028.

The employment income for the financial year was more than the $93,858 abatement level for Best Start tax credit.

At the end of the tax year Inland Revenue will not include the protected Best Start tax credit paid for the whole months the client was getting a main benefit and the Best Start tax credit payments.