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Veterans and income

The Veterans' Support Act 2014 has replaced the War Pensions Act 1954. Existing recipients of the Veteran's Pension (under 65 years) will have the option of remaining on it, or moving to the income support entitlements under the new legislation.

The Veterans' Support Act 2014 introduced changes to entitlements via two schemes that will be known as 'Scheme One' and 'Scheme Two':

  • Scheme One became effective 7 December 2014
  • Scheme Two became effective 7 December 2015.

Veteran's entitlements under the new schemes will continue to be generally treated in the same way for any social policy calculations, eg, Working for Families Tax Credits, student loans and/or child support.

You need to understand your obligations and what you may be entitled to if you're receiving:

For more information about the Schemes see the New Zealand Veterans' Affairs website.

Veteran's Pension (under 65)

Income tax and student loans

Veteran's Pension payments are liable for income tax and are taxed at source. Unless you have already done so, you'll need to complete a Tax code declaration (IR330) form and give it to the Ministry of Social Development (MSD).

Different tax codes apply to different situations, so it's important that you use the right tax code. The tax code you use depends on how many sources of income you have and whether you have a student loan.

If you have a student loan you'll need to use a tax code including the "SL" repayment code. MSD will deduct student loan repayments from your pension payments when they go over the pay period repayment threshold, eg, $734 fortnightly.

Work out your tax code

Note

While receiving the Veteran's Pension you won't be entitled to independent earner tax credit (IETC).

Find out more about who can get the independent earner tax credit

Working for Families Tax Credits

Working for Families Tax Credits (WfFTC) are payments for families with children 18 or under. There are four payment types of WfFTC payments and, depending on your situation, you may qualify for one or more.

Depending on your situation, if you're receiving Veteran's Pension (under 65), you may be entitled to Family tax credit (FTC).

You won't be entitled to:

  • In-work tax credit (IWTC)
  • Minimum family tax credit (MFTC)
  • Parental tax credit (PTC)

Find out more about Working for Families Tax Credits

Child support

If you have child support obligations your income may be taken into account for any entitlements or liability that you may have.

Find out more about child support

People leaving New Zealand

If you're living overseas and receive portable superannuation or a Veteran's Pension that is "portable", these payments are exempt from tax and no PAYE is deducted. This applies whether you're a resident or non-resident for tax purposes.

If you're a non-resident recipient of portable New Zealand Superannuation or a Veteran's Pension you'll need to contact the tax authorities in your country of residence to determine if these payments are required to be declared there.

Note

If you receive NZ Super or a Veteran's Pension that is not deemed as "portable" (with no tax deducted) and travel overseas, you'll need to pay New Zealand tax on the payments you recieve.

Find out more about people leaving New Zealand who receive NZ Super or Veteran's Pension

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Weekly Income Compensation (Scheme One)

Eligible veteran's could transfer from the Veteran's Pension (under 65) to the Weekly Income Compensation (WIC) from 7 December 2014 onwards.

Income tax and student loans

Effective 31 March 2015, WIC payments are considered salary or wages and are taxed at source. You'll need to complete a Tax code declaration (IR330) form and give it to Veterans' Affairs New Zealand (VANZ).

Different tax codes apply to different situations, so it's important that you use the right tax code. The tax code you use depends on how many sources of income you have and whether you have a student loan.

If you have a student loan you'll need to use a tax code including the "SL" repayment code. NZDF will deduct student loan repayments from your payments when they go over the pay period repayment threshold, eg, $734 fortnightly.

You may be eligible for the independent earner tax credit (IETC) depending on your income and circumstances.

Work out your tax code

Working for Families Tax Credits

Working for Families Tax Credits (WfFTC) are payments for families with children 18 or under. There are four payment types and, depending on your situation, you may qualify for one or more.

Depending on your situation, if you are receiving WIC, you may be entitled to:

  • Family tax credit (FTC)
  • In-work tax credit (IWTC)
  • Parental tax credit (PTC)
  • Minimum family tax credit (MFTC)

Find out more about Working for Families Tax Credits

Child support

If you have child support obligations your income may be taken into account for any entitlements or liability that you may have.

Find out more about child support

Leaving New Zealand

Effective 31 March 2015, Weekly Income Compensation (WIC) payments received while you are abroad for any number of weeks, including situations where you are not a New Zealand tax resident, are taxable in New Zealand.

PAYE will be deducted from these payments by VANZ and you'll receive the net entitlement.

A Non-resident tax return (IR3NR) will need to be filed only if you are not a New Zealand resident for tax purposes.

If you are, or were, a New Zealand tax resident and PAYE was deducted by NZDF at the correct rate, no income tax return needs to be filed unless other reasons exist.

Weekly Compensation (Scheme Two)

Eligible veterans can move from receiving Veteran's Pension (under 65) to Weekly Compensation (WC) that commenced 7 December 2015.

Income tax and student loans

WC payments are considered salary or wages and are taxed at source. You'll need to complete a Tax code declaration (IR330) form and give it to Veterans' Affairs New Zealand (VANZ) or ACC.

Different tax codes apply to different situations, so it's important that you use the right tax code. The tax code you use depends on how many sources of income you have and whether you have a student loan.

If you have a studnet loan, you'll need to use a tax code including the "SL" repayment code. NZDF will deduct student loan repayments from your payments when they go over the pay period repayment threshold, eg, $734 fortnightly.

You may be eligible for the independent earner tax credit (IETC) depending on your income and circumstances.

Work out your tax code

Working for Families Tax Credits

Working for Families Tax Credits (WfFTC) are payments for families with children 18 or under. There are four payment types and, depending on your situation, you may qualify for one or more.

Depending on your situation, if you are receiving WC, you may be entitled to:

  • Family tax credit (FTC)
  • In-work tax credit (IWTC)
  • Parental tax credit (PTC)
  • Minimum family tax credit (MFTC)

Find out more about Working for Families Tax Credits

Child support

If you have child support obligations your income may be taken into account for any entitlements or liability that you may have.

Find out more about child support

Leaving New Zealand

Weekly Compensation (WC) payments received while you are abroad for any number of weeks, including situations where you are not a New Zealand tax resident, are taxable in New Zealand.

PAYE will be deducted from these payments by VANZ and you'll receive the net entitlement.

A Non-resident tax return (IR3NR) will need to be filed only if you are not a New Zealand resident for tax purposes.

If you are, or were, a New Zealand tax resident and PAYE was deducted by NZDF at the correct rate, no income tax return needs to be filed unless other reasons exist.