You may qualify for a minimum family tax credit if you get Working for Families, your family income is under the income limit, and you work a minimum number of hours every week.
Can you get Working for Families?
Minimum family tax credit payments ensure working families get a minimum level of income every week. If you qualify, we’ll top up your income so you’ll get $677 a week (after tax). This amount changes from year to year to keep up with the cost of living.
Your entitlement does not change with the number of children in your care.
Minimum family tax credit comes with a risk of overpayment
If your family income and circ*mstances change at any time there’s a real risk of an overpayment which you’ll need to repay to us.
You need to tell us about any changes straight away to avoid going into debt. The best way to contact us is through myIR.
Changes to your family situation, income, and working hours
Income limit
To get the minimum family tax credit, your family income (after tax) for the year must be less than $35,204. That’s $677 a week (after tax).
Minimum hours of work
You can only get the minimum family tax credit for the weeks you work a minimum number of hours for a salary or wage.
- A single parent must work at least 20 hours a week.
- In a 2-parent family, 1 or both parents between them must work at least 30 hours a week.
No entitlement to a minimum family tax credit in some cases
You do not qualify for a minimum family tax credit if you get:
- a main benefit [glossary link] from the Ministry of Social Development (MSD)
- a parent's allowance
- a children's pension from Veterans' Affairs New Zealand.
Non-salary or wage income
To get the minimum family tax credit, you need to be earning income with tax taken out before you get paid (for example, a salary or wage). You do not qualify if you earn:
- self-employed income
- income from a partnership
- a shareholder salary from a company (with no PAYE deductions)
- a shareholder salary from a company (with PAYE deductions) where you’re a major shareholder (with 10% or more of the shares).
But you can get a minimum family tax credit if you earn a salary or wage on top of this income, provided you meet these 2 requirements:
- 1. your total income (from all sources) is under the income limit
- 2. you work the minimum number of hours (for your salary or wage) every week.
NZ Superannuation and student allowances
You can get a minimum family tax credit if you get NZ Superannuation or a student allowance, provided that:
- you also earn income from a salary or wage
- you work the minimum number of hours (for your salary or wage) every week.
If you get NZ Superannuation or a student allowance, we’ll include the payments in your family income when we work out your entitlement.
Student allowance
Working out your family income
How much money can you expect?
Check out our calculator and chart for a quick estimate of your entitlement:
How much can you get?
How the minimum family tax credit works
If you earn under the income limit, the minimum family tax credit will top up your income to ensure you earn $35,204 a year (after tax). That’s $677 a week (after tax).
It’s important to tell us if your family situation changes during the year so we can adjust your payments.
Small changes can have a big impact on your minimum family tax credit, so please tell us straight away so you won’t end up with an overpayment at the end of the year (that you’ll have to pay back).
Changes to your family situation, income, and working hours
Weekly or fortnightly payments
If you choose to get your Working for Families throughout the year, we’ll pay your entitlement by instalments. Your instalments will be equal to your full-year entitlement divided by:
- 26 for fortnightly payments
- 52 for weekly payments.
We pay your instalments in whole dollars.
Examples below
The blue boxes below give examples of how we work out the minimum family tax credit. All examples are based on people working for a full year.
Example: Jeremy gets a minimum family tax credit
Jeremy has 2 children: Zac (9) and Courtney (4). He gets his Working for Families payments weekly.
Jeremy works 22 hours a week, earning a salary of $27,000 (before tax). He also gets child support of $1,000 a year.
His family income after tax is $24,255. Here’s how we worked it out:
Jeremy’s salary before tax: $27,000
Less tax payable: $ 3,745
Salary after tax: $23,255
Plus child support: $ 1,000
Family income after tax: $24,255
Tax rates for individuals
Because Jeremy’s family income after tax is under $35,204 and he works over 20 hours a week, he qualifies for a minimum family tax credit. His full-year entitlement is $10,949.
Here’s how we worked out.
We deduct Jeremy’s family income after tax from the income limit of $35,204.
Income limit: $35,204
Family income after tax: $24,255
Minimum family tax credit for the full year: $10,949
Note that Jeremy’s entitlement does not depend on the number children in his care.
Next, we worked out his weekly entitlement.
Weekly minimum family tax credit
Jeremy gets paid $210 every week.
Here’s how we worked it out:
$10,949 (full year entitlement) divided by 52 equals $210.
Example: Casey earns self-employed income and a salary
Casey has 3 children: Laura (15), Mabel (10), and Iain (3). She is a self-employed music teacher, putting on piano lessons for children during the school holidays.
Her self-employed income comes to $2,000 a year (before tax).
Casey also works 22 hours a week at the local garden centre, earning a salary of $31,000 a year (before tax).
Normally, you do not qualify for a minimum family tax credit if you’re self-employed. But Casey qualifies because she also earns a salary for a job where she works over 20 hours a week.
Her family income after tax is $28,205. Here’s how we worked it out:
Casey’s self-employed income: $ 2,000
Plus her salary: $31,000
Total income before tax: $33,000
Less tax payable: $ 4,795
Family income after tax : $28,205
Tax rates for individuals
Because Casey’s family income after tax is under $35,204 and she works over 20 hours a week for a salary, she qualifies for a minimum family tax credit. Her full-year entitlement is $6,999.
Here’s how we worked out.
We deduct Casey’s family income after tax from the income limit of $35,204.
Income limit: $35,204
Family income after tax: $28,205
Minimum family tax credit for the full year: $ 6,999
Note that Casey’s entitlement does not depend on the number children in her care.
Next, we worked out her weekly entitlement.
Weekly minimum family tax credit
Casey gets paid $134 every week.
Here’s how we worked it out:
$6,999 (full year entitlement) divided by 52 equals $134.
Example: Casey goes over the income limit
Casey is a mum with 3 children. Over the year, she gets a minimum family tax credit of $134 a week.
Please see the previous example for more about Casey’s family situation and how we worked out her entitlement.
Throughout most of the year, Casey’s income and working hours carry on as expected. But in December, Casey is offered a full-time role at the garden centre. She accepts the offer and works 40 hours a week over January, February and March.
At the end of the tax year (31 March) Casey’s family income after tax is $34,640. Here’s how we worked it out:
Casey’s self-employed income: $ 2,000
Plus her salary: $39,600
Total income before tax: $41,600
Less tax payable: $ 6,300
Family income after tax : $35,300
Tax rates for individuals
Her family income after tax ($35,300) is more than the income limit ($35,204). Only slightly, but the effect is huge.
Casey now no longer qualifies for a minimum family tax credit and she’ll need to pay back all her payments ─ which total $6,999.
Working out a repayment plan ─ together
Naturally, Casey is very worried. There’s no way she can pay $6,999 by the due date.
But she does right thing by contacting us.
We explain there are options available and together, we work out a repayment plan that keeps Casey’s stress levels to a minimum.
I'm struggling to file and pay my tax
Get in touch when things change!
Please tell us straight away when your family situation changes so we can adjust your payments and help you avoid a big bill.
Changes to your family situation, income, and working hours
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Last updated: 21 Jun 2024
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