Community-Wise - 2004
Issue July 2004
Family assistance
- changes and increases from April 2005 - April 2007
- budget day briefings around the country
- applying for family assistance
- Working for Families example
- online calculator
- a changes to circumstances
- frequently asked questions
- glossary of key terms
- assistance payments through WINZ or IRD?
Personal tax
- infoexpress - no buttons required!
- personal tax summaries and refunds
- standard-cost household service for childcare providers
Student loans
Child support
- Child support on the air
- account lookup
- frequently asked questions
- CLO's workshop
- salary and wage income finalisation
- Child Support debt strategy
- New payment methods for overseas customers
General
Working for Families - more help for working families
The Working for Families package was announced by the Government in this year's Budget. This programme will increase financial support to low-to-middle income working families with dependent children and assist beneficiaries towards entering the workforce. Inland Revenue and the Ministry of Social Development are responsible for delivering the programme over the next three years.
Vaughan Crouch, Inland Revenue's National Manager Social Assistance says: "Working for Families simplifies the way social assistance payments are made through the tax and benefit systems, making it easier for people to know what they're entitled to and how to get it."
"We are working closely with the Ministry of Social Development and Work and Income to strengthen and streamline the way we assist common customers. Support from community organisations and other family agencies is also vital in helping us to ensure that families receive the assistance they are entitled to."
Working for Families has several components. The changes include increases in family support rates and a new in-work payment that replaces and pays more than the child tax credit. Changes to abatement threshold rates will enable more families to receive maximum entitlements and more families to receive some entitlement generally. Families will also get additional financial support through changes to the accommodation supplement and more help with childcare costs. The changes to family assistance begin from 1 April next year, while changes to the accommodation supplement and assistance with childcare costs start in October this year.
For more information about:
- family assistance - see more details below or go to Inland Revenue's Working for Families section.
- changes to the accommodation supplement and increased assistance with childcare costs visit Work and Income's website.
Or you can call the Working for Families freephone 0800 774 004, available 7am - 6pm Monday -Friday, and Sam - 1pm Saturdays.
Changes and increases to family assistance 1 April 2005 - 1 April 2007
The following table summarises the key increases and changes to family assistance occurring over the three year Working for Families programme.
| Family support | 1 April 2005 Increases by $25 a week for the first child, $15 a week for subsequent children. |
|---|---|
| In-work payment | 1 April 2006 Pays up to $60 a week per family, and up to an extra $15 a week for the fourth and each subsequent child in the family, to:
|
| Child tax credit | Will be phased out over time, but continues for current recipients who are not eligible for the in-work payment. |
| Family tax credit | Increases to ensure a minimum net income of around $17,000 per year for:
|
| New abeatement and threshold rates | The abatement threshold for family support, the in-work payment, child tax credit and parental tax credit increases to $27,500 a year. Aove this, payments will reduce by 30 cents in the dollar. The level of income at which payments stop will depend on the number and age of the children in the family. |
| Family support | 1 April 2007 Increases to $10 a week per child. In the future, rates and abatement thresholds will be adjusted in line with increases in the consumer price index. |
Budget day briefings around the country
On Budget day the Ministry of Social Development and Inland Revenue jointly hosted Working for Families Budget "lockups" in the four main centres
and regional meetings in Whangarei, Hamilton, New Plymouth, Tauranga, Napier, Palmerston North and Nelson.
These events provided briefings and information packs to a wide range of social service providers, local authorities, employers, Maori and Pacific organisations and other government agencies who work with families.
Auckland Service Centre Manager Loraine Elliott says that the Auckland lockup was well attended with 130 people representing 120 organisations.
"Participants were very focused on what the package meant for families," says Loraine.
Wellington Service Centre Manager Mike Hewetson co-hosted the Palmerston North meeting.
"It was really good to get together with such a diverse group of community organisations with an obvious interest in the Working for Families information," he says.
Mike points out that with the changing demographics of the family assistance customer group, our two agencies are well placed to work together and provide a streamlined service to a wide variety of customers within the community.
Dunedin Office Manager Paul MacDonald says that a broad range of representatives of organisations working with families attended meetings in Timaru and Invercargill as well.
"In addition to discussing the new measures, it was also a good opportunity to remind those attending to encourage people they are working with, who may be entitled to family assistance but not receiving it, to apply," says Paul.
Applying for family assistance
To apply for family assistance, a Family assistance registration pack (IR200) needs to be requested. Included in the pack is a Family assistance registration form (FS1). The registration pack can be ordered by calling our automated stationery line on 0800 257 773.
The following information needs to be included on the registration form:
- details about the person claiming, and their partner details
- children details and IRD numbers (IRD number applications for children (IR594), are in the registration pack)
- birth certificates for children (if applying for the IRD numbers)
- an income estimate for the year (if they are not applying for a lump sum payment)
- any other income information they may receive (for example, self-employed income).
Working for Families example
The following is an example for the extra family assistance payments an eligible family could get over the next three years under Working for Families. These figures are approximate only, and the actual gains might differ. Please note that these are not real families.
Pete and Sue have four children and live in Timaru. Pete works 40 hours a week and earns $58,000 gross per annum. Pete and Sue pay $150 a week on their mortgage. After tax and Pete's student loan repayments, the family has $754.40 a week, from work and family assistance, to live on.
Working for Families will increase Pete and Sue's family support and give them the new in-work payment, boosting their income by a total of $150 a week in the hand.
| After | Pete and Sue will get each week | In total, they will be better off by |
|---|---|---|
| 1 April 2005 | $70 more from the family support increases | $70 a week |
| 1 April 2006 | $75 in-work payment (replacing $60 child tax credit) $25 more from the new family support threshold |
$85 a week $110 a week |
| 1 April 2007 | $40 more family support | $150 a week |
Online calculator
For an estimate of what customers might receive from 1 April 2005 use the calculator or phone the Working for Families freephone 0800 774 004.
A change of circumstances?
It is important that any customers who have experienced a change of circumstances notify us as soon as possible. Any change in circumstances, ranging from income changes to changes in family situations, can have an impact on their family assistance payments, so it is vital that customers contact us to update their details. If they do not do so, it is possible they may miss out on payments they are entitled to, or receive too much and have to repay some back at the end of the year.
To amend their income or family details, customers should contact us on 0800 227 774.
Frequently questions
What is family assistance and how do families qualify currently?
Family assistance is made up of several different payments; family support, child tax credit, family tax credit and parental tax credit.
When do the changes take effect?
Changes to family assistance begin from 1 April 2005 with an increase in family support rates. Customers already receiving family assistance don't need to do anything to get the increase. Their payments will be adjusted automatically.
People not currently receiving family assistance but who might think they are eligible, can apply for payments in February 2005. Inland Revenue will be advertising widely early next year to let people know what they will need to do.
Glossary of key terms
Child tax credit
A per-child payment for low-and-middle income families with dependent children who are not receiving a benefit, NZ superannuation, a veteran's pension, student allowance, or ACC for longer than three months.
Family support
A per-child payment for low-and-middle income families, whether they are in work or on a benefit, to help with the costs of dependent children.
Family tax credit
A top-up payment to ensure non-beneficiary families, who are in employment (not including self-employment), working the required hours have a guaranteed minimum income.
In-work payment
A new payment from 1 April 2006, replacing the child tax credit. It is for low-and-middle income families with dependent children who are not receiving a benefit or student allowance and who are in employment (including self-employment), working a required number of hours each week. It is a per-family payment with additional assistance for larger families.
Parental tax credit
A payment for low-and-middle income parents for the first eight weeks after a baby is born who are not receiving a benefit, NZ superannuation, student allowance or ACC for longer than three months. It is not available for parents who receive paid parental leave payments.
Work and Income or Inland Revenue?
Families who choose to receive their payments fortnightly need to estimate how much they think their income will be for that financial year. It is important to make that estimate as close as possible to what they think they will receive.
Family assistance can be paid either through Work and Income or Inland Revenue - not both. If a family gets paid family assistance from both departments at the same time, they will be overpaid and need to pay some back.
Families with income under $20,000 (before tax) will be paid the maximum entitlement for family assistance. Work and Income pays out the maximum and cannot decrease the amount of these payments. So, if a family thinks they will earn over $20,000 they need to get their payments from Inland Revenue (as their entitlement starts to decrease).
Families who earn more than $20,000 and receive family assistance through Work and Income will be overpaid. Customers can avoid this situation by receiving family assistance from Inland Revenue.
For example, Julie receives the domestic purposes benefit (DPB) from Work and Income, who also pay her family assistance (she has one child). She has started a new part-time job working 15-18 hours a week. She thinks she may earn around $20,000 (depending on if she can get more hours a week) but is not sure.
In this case, Julie should get her family assistance stopped from Work and Income and paid through Inland Revenue so, if she does work more hours or gets a pay increase, we can adjust her payments to avoid her receiving a bill at the end of the year.
INFOexpress - no buttons required!
From now on customers will increasingly be able to request information from us by phone, without pressing a single button.
We are adding natural language speech recognition technology to our INFOexpress line. This means that instead of pushing buttons, people can simply use voice prompts and identify their requests by name.
It will allow us to provide a much wider range of options to callers because we are no longer limited by assigning choices to a 10-digit keypad. It also lets callers interact with the system much more naturally.
The technology offers a user-friendly self-service voice mechanism. It lets callers access information and self-service applications and requests much more easily than a touch tone system does. Research shows that users prefer this type of system to touch-tone selection or using the internet.
The system has been operating on our national stationery line (0800 257 773) for some time, but has now been made available for requests and confirmations of personal tax summaries.
Since the system has been in place the number of successful calls has increased, with people finding it easier to complete their request without needing to talk to an operator. We have also significantly reduced the number of callers who give up partway through the process. The total number of callers has also increased indicating that customers are finding the system easier and faster to use. This project is a further step towards our aim of enhancing and expanding our services to all customers.
Personal Tax Summaries and refunds
A Personal Tax Summary (PTS) is an income statement that shows all an individual's income details and tax deductions for the year (sent to us by their employer). It is only for those who receive salary or wages, a benefit or pension, and interest or dividends. We use this information to compare the tax actually paid with the tax a customer should have paid during the year (1 April - 31 March). In some cases this results in a refund.
From the beginning of July customers can request a PTS to see if they are entitled to a refund. Some possible reasons why an individual may receive a refund include:
- working only part of the year
- using a secondary tax code (S) and earning under $38,000
- being entitled to a child rebate or earning under $9,880
- earning under $38,000 and having interest/dividends taxed at 33% or higher
- holding more than one job during the year
- having expenses to claim.
Customers can request a PTS from our website or by phoning 0800 227 774.
Alternatively, they can use the PTS calculator on our website as an easy way to check entitlements to a refund before requesting a PTS. They will need their income information for the year which they can get by phoning 0800 227 774 and requesting a Summary of Earnings.
Standard-cost household service for childcare providers
Inland Revenue has recently changed the tax rules for epople who provide childcare at home.
We have produced a list of standard costs that childcare providers can use when claiming expenses. This should make it easier for people to work out their taxable childcare income and whether they need to file a tax return, rather than keep all their receipts to calculate their actual expenses.
Using the standard rates is optional. People can still return their actual childcare-related expenses if they prefer.
Who does this apply to?
People who provide childcare in their home, under the Education (Home-Based care) Order 1992. This sets out guidelines for childcare facilities including, space, lighting and hygiene. Most of the people covered by the change are expected to work under the unbrella of a childcare agency.
Home-based childcare providers who don't comply with the Order must keep full records of their income and expenses for their tax returns.
Full details about the change are containded in Determination DET 001: Standard-cost household service for childcare providers in Tax Information Bulletin Vol 16, No 4 (May 2004), or phone 0800 377 774.
OWEZERO online
For borrowers who are in paid employment and contemplating how best to manage their student loan repayments, OWEZERO is an essential tool.
A voluntary repayment is an extra payment above the student loan repayment threshold. These repayments can significantly decrease the term of a loan and the amount of interest charged. It is entirely up to borrowers how much extra they pay back. The rewards of even small voluntary payments are significant.
For a loan balance of $15,000 on an income of $25,000, an extra $10 a week paid on top of minimum repayments will save $39,846.97 of interest - and the entire balance of the loan will be paid off 16 years sooner!
With one click borrowers can access the student loan calculator. All they need to do is visit the OWEZERO website (from the related websites section of our site) and they can see how extra repayments can transform the term of the loan and reduce interest to create a much more optimistic future.
We strongly encourage borrowers to visit this site and explore the resources that have been designed to assist them to independently manage their own student loan situation.
Student loan borrowers get more choice
We recently launched a new internet-based credit card payment option for student loan borrowers, aimed primarily at those based overseas. Payments can now be made from anywhere in the world, using a MasterCard.
Bryre Patchell, National Manager - Operational Strategy and Design, says that while any borrower will be able to use the service, he expects borrowers living overseas to get the most benefit.
"At present, student loan borrowers living overseas can meet their obligations by using a telegraphic transfer, which takes time and is subject to high bank fees, or send a foreign currency cheque. If they use the credit card service they can pay in New Zealand dollars at any time and we will have it within two working days.
"Inland Revenue is continually looking at ways of making it easier for customers to meet their obligations and the credit card facility does just this.
"Our overseas-based student loan borrowers have asked for an easier way of repaying their student loan so we have worked with Westpac to create an additional payment option for them.
"This internet-based credit card service provides a payment choice which makes the most of today's technology. It is a convenient, secure and fast alternative to the current option of overseas bank telegraphic fund transfers," says Bryre.
Westpac charges a convenience fee of 2.49% per transaction to users to cover the cost of providing the service. Inland Revenue receives no part of this fee.
Student loan borrowers were told about the new service through their regular newsletters in April and have already been using the internet site successfully to make payments. Borrowers can make credit card payments by visiting online.
Child Support on the air
Child Support was invited recently by Nga Ture Kaitiaki ki Waikato Community Law Centre to appear on their regular Radio Waatea segment over a period of six months to present information on a variety of child support topics.
Mihaka Panapa, our Whangarei Community Liaison Officer, joins radio host Dale Husband on Wednesdays between 9.30 and 10.30am, once a month, and covers general information for paying parents, custodians, and anyone with an interest in child support.
The Manukau-based law centre runs an outreach service that is partly provided on community radio, where it aims to give relevant law-related information to listeners. Radio Waatea is a community station with Auckland-wide coverage for a primarily Maori audience, but which also reaches the wider community.
It has been an excellent opportunity for Child Support to raise community awareness about child support, as well as interact with specific community groups through their own existing, well-supported forums.
"It's been a great experience - an excellent way for us to talk directly to our community and raise awareness of some very practical aspects of child support," Mihaka explains. "People will hear helpful information for themselves and for family and friends. It has helped increase our visibility in the community and given clear, specific information to listeners."
Account lookup
The Account Lookup facility that has been available for student loan borrowers for some time is about to become available to Child Support customers as well. It will contain information for both paying parents and custodians.
For those familiar with internet banking, this new service is extremely easy to use. Individuals can log on and view their account online - including information we hold on their assessment, payments, entitlements and personal details. For example, it will let custodians check whether payments have been made and it will allow paying parents to check the details that they used in their annual assessments.
We are currently at the stage of testing the service with some of our customers. We expect to launch the service to selected groups of Child Support customers during September 2004 and then progressively make the service available to more customers each month. By December this year, we will have advised all customers when and how they can access this service. All staff are receiving full training on this product so they can easily assist any customers who experience difficulties in using the service.
Frequently asked questions
Does the suspension of a benefit mean a custodian is entitled to receive child support payments?
Custodians need to tell Child Support when they are going off a benefit so that we can arrange to start forwarding their child support payemtns to then, rather than to the government. Before this can happen though, Child Support needs confirmation that the benefit has been cancelled, not just suspended.
The letters that Work and Income send their customers say the benefit has been stopped, which can mean either cancelled or suspended.
Suspending a benefit means that it is easier for the customer to reapply for a benefit than if it had been cancelled, and this provides a safety net for customers if their experience in being off a benefit is not successful.
If necessary, Child Support will contact a customer's Work and Income case manager to confirm the cancellation of the benefit. It is only when this confirmation has been received that we can make arrangments to forward payments received from the paying parent on to the custodian. If there is a time delay between the suspension and cancellation of a benefit, the entitlement to child support payments is backdated to the date the cancellation came into effect.
CLOs' two-day workshop
All Community Liaison Officers (CLOs) met for a two-day workshop in Wellington recently, to work on ways to further improve their service to their communities. A great variety of topics were discussed throughout the two days, but the key focus of the occasion was to seek input to the development of our National Community Plan. The National Community Plan incorporates Child Support's strategic direction with the child support needs of the community and provides a focus for our education activities.
As our primary representatives who have face-to-face contact with our communities, the CLOs had plenty of practical information to offer, drawing on their direct experiences with our customers and their needs. During the workshop the team explored ways to better measure the effectiveness of our community education work.
They also looked at ways to work more closely with other Inland Revenue staff who work with communities (such as Social Policy Liaison Officers (SPLOs) who deal with family assistance and student loans), providing customers with a single point of contact.
Following this workshop the CLOs returned to their areas to begin developing their plans, building on the direction provided by the National Community Plan. These Area plans take into account all the regional variations around New Zealand in relation to the child support needs for each community, and set specific local goals for the coming year.
Salary and wage income finalisation
Notices of Assessment are sent to all paying parents in February and March each year. For those whose income is from salary, wages, a benefit, or interest and dividends, these assessments are based on actual income from April to January and provisional income for the remaining two months of the child support year (February and March).
In July, actual figures are available for February and March, so we make another assessment based entirely on actual earnings. For anyone whose income was different to the estimated amount there may be a change in their assessment - this may result either in a credit or in a debt.
If there is a difference of more than $500 between the amount of income used in the initial assessment and the amount actually earned, we issue a new assessment in July and notify the paying parent. We also send a new Notice of Entitlement to any custodians whose entitlements have changed.
Any changes in assessment are backdated to 1 April 2004, and the first payment based on the new assessment is due in August. If any overpayments have occurred, they are credited towards child support payments for the coming months. Any debt created by the reassessment is due 30 days after the reassessment.
Child Support debt strategy
Creating an environment that promotes ongoing compliance continues to be a primary focus for Child Support with particular emphasis on strengthening debt collection activities and pursuing legal action with persistent, long-term debtors.
Child Support has worked closely with our internal technical advisors to ensure we were able to use the full range of collection options available under legislation, sending a strong signal to deter further non-compliance.
Arrest warrants, charging orders, examinations, and other debt collection measures have all resulted from this activity.
- Arrest warrants have been issued to some overseas-based paying parents with child support debt who visit New Zealand.
- For those with property such as boats, luxury vehicles and real estate and who have a child support debt, charging orders have been made. A charging order registers a claim against a person's interest in any property to the value of the amount claimed.
- Examination is a process where a defaulting parent's financial means are examined by the courts. Through this process parents have entered into arrangements to pay off their debt over time, and the courts have also granted some arrears write-offs.
Child Support will further increase its debt-recovery activities this financial year, continuing to treat seriously persistent non-compliance by those with the ability to pay.
Customers wishing to discuss issues relating to their payments or any debts can contact us on 0800 221 221.
New payment methods for overseas customers
Two new methods for making payments are in development for Child Support's overseas customers. Currently payment channels available to overseas customers are reasonably limited and expensive compared with options available to customers in New Zealand.
The option to pay by credit card is expected to be made available from mid September. Also, an Australian Bill Payment Service is under investigation. This will provide paying parents living in Australia with the option of using the internet and telephone banking services of their Australian banks to pay their New Zealand child support. Overseas customers will be sent information once these payment methods are available.
Social Policy Liaison Officers and Community Liaison Officers
| If you would like to talk with one of our Social Policy Liaison Officers (SPLOs), or have one of them visit you, or a group to talk about family assistance or student loand, please phone us on 0800 227 773 and ask for the SPLO in your region: | If you would like to speak to one of our Community Liaison Officers (CLOs), or if you would like them to come and talk with you or a group, call us on freephone 0800 221 221 | ||
|
|
| ||
|---|---|---|---|
| Whangarei | Margaret Gunson | Whangarei | Mihaka Panapa |
| Takapuna | Shannon Brady | Takapuna | Jean Tu |
| Manukau | Emmie Lemalu Raewyn Bates Hoana Parangi |
Manukau | Sophie Chungson Joseph Manu |
| Hamilton | Helen Richards Diane Randall |
Hamilton | Gail Hughey |
| Tauranga | Lorraine Morten | Tauranga | Jan Hoare |
| Gisborne | Kylie Low | Gisborne | Martin Cole |
| Napier | Nerissa Taurima | Napier | Jo Damen |
| Rotorua | Mary Wright | Rotorua | Lorryl McIndoe |
| New Plymouth | Jenny MacDonald | New Plymouth | Wendy King |
| Wellington | Penoa Tuigamala Kaisara Ierome |
Wellington | Elena Lemalama |
| Nelson | Margaret King | Nelson | Kaye Latham |
| Greymouth | Juliette Henry | Greymouth | |
| Christchurch | Liz Manuel Nicole Manawatu |
Christchurch | Angela Moylan |
| Timaru | Geoff Mayo | Timaru | |
| Dunedin | Jenni Mattingly | Dunedin | Peter Read |
| Invercargill | Peter Murphy Mary Rae |
Invercargill | Lynley Ballantine |
Key dates and events
| Date | Event |
|---|---|
| July Child Support |
New Notices of Assessment are sent to paying parents if there is a change of more than $500 between the income used to calculate their income for their assessment that was stated on the notice sent in February/March of the income actually earned for the year 1 April 2003 - 31 March 2004. New Notices of Entitlement are also sent to custodians where appropriate. |
| July Personal Tax Season |
Taxpayers who did not receive a Personal Tax Summary can now request one. |
| 7 July Student Loans |
The first student loan interim instalment due to be paid. This amount is payable by borrowers who are self-employed or earning income from other sources and who won't automatically have repayment deductions made from their income. |
| Early August Child Support |
End-of-year "square-up" completed for paying parents who estimated their income for the previous child support year (1 April 2003 - 31 March 2004). |
| 30 September Student Loans |
The second installment of non-resident assessment due from borrowers living overseas. |
Inland Revenue on hand to help with floods
Inland Revenue has made staff directly available to those in the communities affected in the recent Bay of Plenty floods. Two one-stop-shops have been set up in Edgecumbe adn Whakatane to provide affected residents with advice and information on government services. We have staff at these one-stop-shops to provide advice on tax and child support. Tania Faulkner, on our our Maori Community Officers, is also visiting local marae, where many evacuees are temporarily housed, to assist with any tax or social policy issues people may have.
Individuals in the flood-affected areas with any tax or social policy queries can call our free-phone helpline on 0800 473 566. For more general queries the Governments's helpline is also available on 0800 779 997. Further information is available on the Inland Revenue website.
To subscribe to Community-Wise, please go to our website or contact your local Community Liaison Officer or Social Policy Officer.
Download ›
PDF | 414kb | 12 pages
Download Acrobat Reader to view PDF files
Report an accessibility problem for this page
Date published: 07 Dec 2004
Back to top