Date: 26th June 2018
While many families in the Queenstown Lakes region are benefiting from increases in tourism and a generally buoyant economy, there are some who may be feeling the pinch. Whether it’s the increased cost of housing, the high cost of heating a house in winter time, or a new baby in the household, there are families who are struggling. The government is attempting to address these issues by making changes to the Families Package.
If you have dependent children, or are on a benefit, you may qualify for government support from the Families Package coming into place from 1 July 2018. In addition to increased Working for Families tax credits we mentioned recently, this support includes:
The Best Start payment of $3,120 a year (or $60 a week) per child is designed to help families meet costs in a child’s early years. It will be available to all families in their child’s first year and for low- and middle-income families in the child’s second and third years. Best Start payments will be abated at 21% for income above $79,000. It will be made available for children born after June 30 and will replace the Parental Tax Credit.
The Winter Energy Payment is aimed at helping people on a benefit, New Zealand Superannuation or a Veteran’s Pension to heat their homes in winter. It provides $20.46 a week for single people, and $31.82 a week for couples or people with dependent children. It will be paid from 1 July to 30 September 2018.
From 1 July the eldest-child rate will increase to $5,878 a year, and for subsequent children to $4,745. The abatement threshold will increase from $36,350 to $42,700, and the abatement rate from 22.5% to 25%. This means that the amount of the family’s income at which Working for Families tax credits starts reducing is increased, however the amount of the reduction has increased from 22.5c in the dollar to 25c in the dollar. The result is net increase to families receiving Working for Families tax credits.
Because the changes will be made automatically, you don’t need to do anything. If you aren’t a Work and Income client may need to apply for Best Start tax credit through Inland Revenue.
If you have any questions about your eligibility for Working for Families tax credits, please contact us.