Working for Families (WFF) is a collective term for tax credits paid to families with dependent children. WFF is designed to help make it easier for people to work and raise a family.
We collect data by using individuals’ WFF tax returns to see total entitlements. We also use WFF data recorded on the PAYE returns of Work and Income clients. When a customer has not yet filed their return, we use WFF payments made by Inland Revenue.
Working for Families is targeted to families with lower incomes. This is achieved by reducing entitlements as incomes rise for families with incomes above the relevant threshold.
The Best Start Tax Credit (BSTC) started on 1 July 2018. This tax credit is available to all qualifying families with a baby in their 1st year, and to families with infants from 1 year of age until their 3rd birthday on an abated basis – meaning that if the infant is aged 1 or 2 the amount the family is entitled to depends on the family’s circumstances. A family is no longer eligible for BSTC once their child turns 3, but they will have a part year entitlement in that tax year.
Because BSTC is a relatively new credit, statistics for the first few years of the credit reflect its phase-in until the first cohort (group) of eligible children turn 3 and lose entitlement. From the 2023 tax year we expect that growth in the number of families entitled to BSTC tax credits will stabilise. After that the number of eligible families will generally increase or decrease in line with changes in New Zealand’s new-born to 2-year-old population, and or will reflect the impact of income growth on reduced entitlements.
BSTC statistics includes families administered by Inland Revenue and clients of Work and Income. For Work and Income clients that received BSTC but did not receive a WFF end of year assessment from Inland Revenue, Inland Revenue has estimated their BSTC entitlement using administrative data held on file. The methodology has been adjusted in this release and applied to the 2020 and 2021 years previously published.
The following abbreviations are used for the tables and graphs:
- Family tax credit (FTC)
- In-work tax credit (IWTC)
- Minimum family tax credit (MFTC)
- Best Start Tax Credit (BSTC)
Credits no longer available
- Child tax credit (CTC)
- Parental tax credit (PTC)