New Zealand’s Family Tax Credit is a government allowance given to families with dependent children. More broadly, it is part of the Working for Families package, which is aimed at providing support to low- to middle-income families in the economy.
Family Tax Credit NZ
The FTC is one of the central elements in New Zealand’s Working for Families package, oriented toward providing financial support for families with dependent children. It formed part of a broader set of Working for Families tax credits and was cemented into several types of financial support for families with dependent children aged 18 years and younger.
The FTC is totally independent of the source of income, which simply means that it can be received by any family irrespective of whether they are employed, self-employed, or on a benefit. The amount of Family Tax Credit received is contingent upon the family’s annual income. For the period starting from April 2024, families with an annual income.
Eligibility Criteria of Family Tax Credit in New Zealand
The following are the eligibility criteria for the Family Tax Credit in New Zealand:
Parent/Caregiver Requirements:
- You have to be 16 years old or older;
- You have to be a New Zealand resident. That is, you must either be a citizen of New Zealand, have a residence visa, or have a permanent residence visa;
- Principal Caregiver: You must be the main provider of care for the dependent child(ren).
Child/Dependent Requirements:
- Your child(ren) must be under 18 years old, or between 18 and 19 years old and still in school or tertiary study.
- Dependency: The child(ren) must be financially dependent on you.
- The child(ren) must be New Zealand residents and living in New Zealand.
Income and Work Requirements:
The amount of Family Tax Credit you receive is determined by your family’s income.
- The income thresholds change from time to time. Over this April 2024 period, the least family tax credit applies if the annual income after tax is below $35,204 per annum.
- Other forms of Family Tax Credit payments, FTC itself for instance, could be made to the higher tiers of income levels.
- Work Hours: For some types of FTC, such as the Minimum Family Tax Credit, you or your partner must have worked for at least a minimum number of hours.
Family Tax Credit NZ Payment Amounts
How much FTC a family actually gets depends on a number of factors, which include:
- Number of dependent children: The more children, generally the higher the FTC.
- Family income: FTC is income-tested; that is, the more you earn, the less you get.
- Other tax credits: Receiving other tax credits, like Working for Families or accommodation supplement, can affect the amount of FTC.
Minimum Family Tax Credit
- This guarantees that families have the minimum level of income support amount. The MFTC tops-up a family’s income to a set level.
- The amount of the MFTC changes regularly, staying abreast of the rising living costs. From April 2024, a family needs a minimum after-tax weekly income of at least $677, which goes up to $679 from July 2024.
Family Tax Credit (FTC)
- This is the central part of the FTC. The maximum payment varies with family income and the level of children.
- The FTC is structured to phase out gradually as family income increases so as to encourage work participation.
Best Start
- This is an allowance for young children that offers extra help to families. The figure of Best Start varies with the age of the child.
Childcare Subsidy
- This is paid to eligible families to help towards the costs of childcare. The amount of subsidy depends on both family income and the actual cost of childcare.
Applying for Family Tax Credit NZ
You can apply for the New Zealand Family Tax Credit easily by applying to the My MSD website. It is an online facility where you are required to apply online by following these easy steps:
- If you are not yet registered with My MSD, you will need to set up a My MSD account.
- You will need to provide your personal information including name, date of birth, and IRD number for this.
- Sign in to My MSD. Then scroll down to Benefits and allowances.
- Click on Apply for Family Tax Credit –the form or the link will be down.
- The type-in form online will need details that are comprehensive to you and your family. These details include :
- You’ll need to provide this information about you and your partner:
- Personal information (names, dates of birth, IRD numbers)
- Information regarding your children: names, dates of birth, in whose care they reside
- Your income details and those of your partner
- Bank account details for payment
- Housing information (if applying for accommodation supplement)
- You may be asked to upload supporting documents, such as birth certificates, proof of income, or tenancy agreements. Make sure you have these documents ready before you start your application.
- Check all the information you have entered for accuracy. If satisfied, submit your application.
- You will be issued a confirmation of your application. This may include a reference number.
Family Tax Credit Payment Schedule
You have the option of deciding how you wish to be paid for FTC:
- Weekly: You are paid every week.
- Fortnightly: You are paid every two weeks.
- Lump Sum: The entire annual payment is made in one payment after the end of the income year.