Working for Families Tax Credits

Working for Families Tax Credits (WfFTC) are an entitlement for families with dependent children aged 18 or younger.

The types of payment and the amounts you can get depend on:

  • how many dependent children you care for
  • your total family income
  • where your family income comes from
  • the age of the children in your care, and
  • any children you share care for.

There are four different types of payments (tax credits):

  1. Family Tax Credit: a payment for each dependent child aged 18 or younger.
  2. In-work Tax Credit: a payment for families who are in paid work
  3. Minimum Family Tax Credit: to ensure income does not drop below $22,776
  4. Parental Tax Credit: paid to families with a newborn baby for eight weeks after the baby is born (can't be on paid parental leave or receiving an income-tested benefit).

Note to be eligible for the in-work tax credit and minimum family tax credit must be working 20 hours per week as a single parent or 30 hours per week as a couple.

From 1 April 2011, IRD broadened the definition of 'family income'. This has meant that many families are either no longer eligible or have reduced entitlements for WfFTC. It has also made the calculation to establish WfFTC entitlements particularly complicated.