Introduction
Family tax credit is one of 5 income-tested tax credits administered by Inland Revenue that make up Working for Families Tax Credits for low-income families.
The Ministry of Social Development pays family tax credit on behalf of Inland Revenue to clients receiving a main benefit. Inland Revenue has overall legislative and administrative responsibility for this assistance.
When a client is receiving a main benefit they can get family tax credit and Best Start tax credit, but cannot receive any other Working for Families Tax Credits.
The income threshold for family tax credit is higher than the main benefits income thresholds. This means that a client's main benefit will stop due to their income level before the family tax credit income threshold is reached. If a client receives a main benefit the Ministry can pay the maximum rate of family tax credit.
Inland Revenue is responsible for all payments of family tax credit to families:
- who receive a main benefit but choose to get their family tax credit from Inland Revenue or
- not receiving a main benefit
New Zealand Superannuation and Veteran's Pension clients with dependent children must apply to Inland Revenue for payment of family tax credits and Best Start tax credits.
On 1 July 2018 the 5 separate rates of family tax credit were merged into 2 rates, for the eldest child, and the second or subsequent children.
For more information see:
