Determining portion of family tax credit to include
Only a portion of the family tax credit is included in the calculation of Income Related Rent.
How to determine the amount to include
Step 1. Determine the total family tax credit rate that the applicable people are entitled to get. This is the actual amount they are entitled to get based on their family situation and not what they are getting.
Step 2. Determine the portion to include using the following formula:
- get the actual amount that the applicable people are entitled to get and multiply the rate by 25% (or 0.25)
- get the rate of the family tax credit category 'eldest or only child', and multiply the rate by 25% (or 0.25)
Note use the rate 'eldest or only child', regardless of the age or number of the children that the applicable people are getting or are entitled to get family tax credit for.
Step 3. Whichever is the lesser amount of step 2 should be included in the calculation of Income Related Rent.
Note when a client has a shared care/carer arrangement and the child stays in the house for overnight stays for 6 nights per fortnight or more, you will need to include a portion of the amount of family tax credit the client is entitled to get.
Examples of determining family tax credit amount
Example 1
Leanne has 3 children, aged 4, 9 and 16 years.
She is getting Sole Parent Support and is entitled to get family tax credits.
Calculate the portion to include in the calculation as follows:
Step 1 - Family tax credit entitlement (1 April 2026) | Rate per week |
Eldest or only child, 16 years old | $151.91 |
Second or subsequent child, 9 years old | $123.78 |
Second or subsequent child, 4 years old | $123.78 |
Total amount of family tax credit received | $399.47 = A |
Step 2 - Determine the portion to include | Rate per week |
25% of rate of A (amount Leanne is entitled to get) | $99.86 = B |
Eldest or only child | $151.91 |
25% of rate 'eldest or only child' | $37.97 = C |
Step 3 - Get the lesser amount of B or C | $37.97 = weekly amount to include in the calculation of Income Related Rent |
Example 2
Simon has a shared care/carer arrangement for his 9 year old child and the child stays in the house for overnight stays, 4 nights per week. He is getting Sole Parent Support and entitled to get family tax credit.
Calculate the portion to include in the calculation as follows:
Step 1 - Family tax credit entitlement (1 April 2026) | Rate per week |
Eldest or only child, 9 years old ($151.91 divided by 7 and multiplied by 4) | $86.80 |
Total amount of family tax credit received | $86.80 = A |
Step 2 - Determine the portion to include | Rate per week |
25% of rate A (eg amount Simon is entitled to get) | $21.70 = B |
Eldest or only child | $151.91 |
25% of rate 'eldest or only child' | $37.97 = C |
Step 3 - Get the lesser amount of B or C | $21.70 = weekly amount to include in the calculation of Income Related Rent |
Note the above rates of family tax credit are as at 1 April 2026.
For more information see:
- Working for Families Tax Credits
- Minimum family tax credit
- Extra help Family tax credit
- Deskfile Family tax credit rates
- Inland Revenue Working for Families
