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Working for Families Tax Credits 2007 to 2016

Working for Families Tax Credits is a collective term for a number of tax credits paid to families with dependent children. Working for Families Tax Credits (WfFTC) are payments designed to help make it easier for people to work and raise a family.

The data for these statistics is available for download from the links below.

Working for Families Tax Credits - number of families 2007 to 2016 | Excel | 34kb

Working for Families Tax Credits - number of families 2007 to 2016 | CSV | 1kb

Working for Families Tax Credits - average entitlement 2007 to 2016 | Excel | 15kb

Working for Families Tax Credits - average entitlement 2007 to 2016 | CSV | 1kb

Graph of Working for Families Tax Credits - number of families

Large version of graph

Long description of graph

This graph has one line showing the number of families that have received Working for Families tax credits from 2007 to 2016.

The number of families claiming Working for Families tax credits increased from 380,300 in March 2006 to 421,200 in March 2011. As at March 2016, it has decreased to 335,900 families - due in part to the amount at which the entitlement starts to decrease remaining static since 2012.

Graph of Working for Families Tax Credits - average entitlement

Large version of graph

Long description of graph

This graph has two lines, showing the value of average entitlement for Total and for FTC, from 2007 to 2016 for years ending March 31st.

Since 2008, average entitlements (for both total and FTC) have remained relatively stable.

Working for Families Tax Credits are made up of four entitlement types. The credit entitlements are abated against the joint family income and the residual entitlements are transferred to the recipient family after abatement. The four entitlements are below.

Family tax credit (FTC)

Family tax credit (FTC) is a payment for each dependent child. The amount of family tax credit depends on:

  • annual family income
  • the number of dependent children in their care, and
  • the age of these children.

Families can't receive family tax credits for child(red) if they receive a foster care allowance, oprhan's benefit or unsupported child's benefit for them.

In-work Tax Credit (IWTC)

This is a payment for families who are in paid work. To receive the credit, a two-parent family must normally work 30 hours or more a week between them, and a single parent must normally work 20 hours or more a week. The recipient families must satisfy an "in full-time work" test based on their number of hours per week in paid employment.

An amount of $72 per week paid to families of up to three children, and $15 per child per week for additional children. It's not available to families receiving an income-tested benefit or student allowance. The amount of in-work tax credit depends on:

  • the annual family income before tax
  • the number of dependent children in their care.
Parental tax credit (PTC)

This payment helps parents with the costs of a newborn/adopted child for the first 10 weeks. The amount received depends on family income and the type of income the family received in the first 10 weeks.

Parental tax credit is available for families with a new-born baby who don’t receive paid parental leave or a Work and Income benefit. After 1 April 2015, families receive up to $220 a week for the first 10 weeks (70 days). Before 1 April 2015, they can receive up to $150 a week for the first 8 weeks (56 days).

Minimum family tax credit (MFTC)

MFTC tops up after-tax family income to a guaranteed minimum amount. This is paid to families who satisfy the "full-time work" test, and who are not self-employed. To receive this payment, at least one parent must be working for a salary or wage. A two-parent family must work at least 30 hours a week between them, and a single parent must work at least 20 hours a week. The Minimum family tax credit tops up a family's annual income (net income after tax deduction) to $23,816 a year ($458 per week) for the tax year ending 31 March 2018.

The data is based on March year entitlements assessed on tax returns and supplemented with the payments data from Work and Income recorded on their EMS schedule.

Claims filed more than two years after the end of the income year are not included.

The 2016 data are considered to be incomplete until after 31 March 2018.

[Definitions]   [Feedback form]

Defined category Definition
Active customer
  1. A customer with any registered activity within a specific period, or
  2. a salary and wage earner whose only relationship with Inland Revenue is having PAYE deducted and paid on their behalf within a specific period.
Defined category Definition
Adjudication categories

Adjudication cases are classified (depending on the degree to which the position of the Commissioner of Inland Revenue was upheld) into the following five categories:

  1. decided fully for the Commissioner
  2. decided mostly for the Commissioner but not the full amount or grounds/reasons
  3. decided fully for the taxpayer
  4. decided mostly for the taxpayer but not the full amount
  5. decision unable to be reached on the amount of assessment.
Defined category Definition
Customers in debt

Any customers with overdue debt.

Defined category Definition
Entity type

A classification of customers based on their legal structure and tax obligations. These include companies, diplomatic missions, government departments, individuals, Māori authorities, partnerships, society/clubs, superannuation funds, trusts, unit trusts.

Defined category Definition
Filing channel

We distinguish between three types of filing channels:

  1. e-Filing (a system for registered tax agents to send and receive information electronically)
  2. paper-based filing, and
  3. web (online) filing.
Defined category Definition
Geographic area
  1. Geographic areas are based on Inland Revenue district offices:
    1. Auckland: Manukau, Takapuna
    2. Rest of the North Island: Gisborne, Hamilton, Napier, New Plymouth, Palmerston North, Rotorua, Tauranga, Wellington, Whangarei
    3. South Island: Christchurch, Dunedin, Greymouth, Invercargill, Nelson, Timaru
    4. "Corporates" offices for customers not allocated to a specific geographic area.
  2. At an aggregate level district offices are combined into three major areas: Auckland, Rest of the North Island and South Island, as shown above.
Defined category Definition
GST turnover

GST turnover is calculated from GST returns as the sum of sales and income for the year ended 31 March.
For a two-monthly filer, this would mean the sum of gross sales on six successive GST returns, with the last return being for the period ending 31 March.
The GST tables only include GST collected or refunded by Inland Revenue. GST collected on imports by the New Zealand Custom Service is not included.

Defined category Definition
Individual

Customers not registered for GST or PAYE and not belonging to large enterprises (LE) or non-profit organisations (NPO).

Notes:

  1. This includes individual customers receiving income from business (eg, rental property, shares) but not registered for GST or PAYE.
  2. Where there are overlaps between LE, NPO, SME and individuals, entities are allocated to the group according to the following order of priority. The priorities are:
    1. large enterprises (LE)
    2. non-profit organisations (NPO)
    3. small and medium enterprises (SME)
    4. individuals.
Defined category Definition
Large enterprise (LE)
  1. A non-individual entity which by itself or as a part of a business group has an annual turnover exceeding $100 million (calculated based on GST101 returns), or
  2. an entity belonging to specialist segments as follows:
  • Crown
  • financial
  • high-wealth individuals
  • manufacturing
  • non-resident entertainers
  • non-resident contractors
  • resources
  • services.
Defined category Definition
Liable parent (formerly non-custodial or paying)

A parent of a qualifying child who is normally required to pay child support.

Defined category Definition
Non-profit organisation (NPO)

All entities exempted from income tax and not belonging to large enterprises with the following exemption types:

  • society/club income < $1000
  • amateur sports clubs
  • charity
  • dairy herd society
  • district societies
  • scientific and industrial research
  • veterinary service clubs, or
  • all entities except building societies and friendly societies with "other" exemption type.
Defined category Definition
Overdue child support debt

The amount of an employer's or a liable parent's liability which is in arrears (due, but not paid), together with overdue receiving carer overpayments.

Notes:
 

  1. Child support debt excludes debt  we collect on behalf of overseas agencies.
  2. This amount includes any penalties applied to the debt. Note that only the overdue penalties component is recognised as a debt from the Crown perspective.
Defined category Definition
Overdue debt case age

The length of time the debt has been overdue.

Defined category Definition
Overdue debt cases

A debt case is created when a due date for payment has passed without full payment being made. Other overdue debt elements may be added as they become overdue. The case will close when all overdue debt has been fully resolved.

Defined category Definition
Overdue debt element

A specific tax type and period for which a debt is due. A customer can have one or more debt elements.

Defined category Definition
Overdue student loan debt

The amount of repayment obligation for a tax year that is overdue.

Notes:

  1. The definition applies to both residents and overseas based borrowers.
  2. This amount includes any penalties applied to the debt.
Defined category Definition
Overdue tax debt

The amount of tax that remains unpaid after the due date for payment. Overdue tax debt includes any penalty and interest applied to the debt.

Defined category Definition
Overdue Working for Families Tax Credits debt

When recipients are paid more than their entitlement and they don't repay it by the due date a debt arises. The amount includes any penalty and interest applied to the debt.

Defined category Definition
Payroll giving

A scheme which allows employees to donate money to an approved donee organisation (an organisation that has Inland Revenue-approved donee status) of their choice by having a deduction taken direct from their gross pay and receive immediate tax credits that reduce their PAYE payable.

Only employers who electronically file their employer monthly schedule and deduction form can choose to offer payroll giving to their employees.

Defined category Definition
Percentage of payments made on time

The percentage of late payments to the total number of payments per tax year.

Defined category Definition
Percentage of returns filed on time

The percentage of late filings to the total number of filings per tax year.

Defined category Definition
Receiving carer (formerly custodial parent)

A parent or carer of a qualifying child who is normally entitled to receive child support from a liable parent. They must have at least 35% care to receive child support.

Defined category Definition
Registered customer

Registered customers include all customers registered with Inland Revenue, either individuals or entities. Registered customers include some entities and people no longer active.

Defined category Definition
Revenue collected

Revenue collected includes only taxes and duties collected by Inland Revenue. GST collected by the New Zealand Customs Service is excluded. Numbers are unconsolidated.

Note: The Treasury publishes monthly financial statements prepared on a consolidated basis, meaning they eliminate tax transactions between departments, state-owned enterprises and Crown entities.

Defined category Definition
Revenue collected from Liable parents (formerly non-custodial or paying)

Revenue collected from liable parents includes all revenue collected during each tax year by Inland Revenue including payments related to other time periods.

Defined category Definition
Shortfall penalty

A penalty imposed as a percentage of a tax shortfall (a deficit or understatement of tax), resulting from certain actions on the part of a taxpayer. Shortfall penalties apply to most taxes and duties, including student loans, but not to child support repayments by liable parents.

The law divides these actions into five categories of fault or breach, with a specified penalty rate for each category. The severity of the penalty increases in proportion to the seriousness of the breach: Not taking reasonable care (20%), Unacceptable tax position 20%, Gross carelessness (40%), Abusive tax position (100%), Evasion (150%).

Defined category Definition
Small and medium enterprise (SME)
  1. All entities with an active relationship for GST or PAYE that do not belong to large enterprises or non-profit organisations, and
  2. all non-individual entities without active registration for GST or PAYE not belonging to non-profit organisations.
Defined category Definition
Source deductions

Source deductions include:

  1. PAYE (pay as you earn), and
  2. ESCT (employer superannuation contribution tax), and
  3. SSCWT (formerly known as the specified superannuation contributions withholding tax).
Defined category Definition
Tax agent

A tax agent prepares the annual returns of income for 10 or more customers in one of the following ways:

  • a practitioner carrying on a professional public practice
  • a person carrying on a business or occupation in which returns of income are prepared, or
  • a Māori Trustee.

A tax agent must be a registered Inland Revenue customer.

Defined category Definition
Taxable income

Taxable income for individuals is income on which their personal income tax is assessed for the March year.
For people with IR3 tax returns or Personal tax summaries, this is income from all taxable sources less allowable deductions and losses. People with negative income because of losses are recorded as having nil taxable income in the tables. For people who are non-filers, taxable income is deemed to be their total PAYE gross earnings in the year ended 31 March. PAYE gross earnings can include income from employment, and also taxable welfare benefits, New Zealand Superannuation, earnings-related ACC, student allowances, and paid parental leave.

Defined category Definition
Weighted overdue debt case age

The average age of the case elements weighted by their dollar value.

Defined category Definition
Working for Families Tax Credits

The Working for Families Tax Credits (WfFTC) consists of the following credit types:

  • FTC - family tax credit
  • IWTC - in-work tax credit replaced child tax credit from April 2006. Customers who received child tax credit before 1 April 2006 and don't qualify for in-work tax credit may continue to receive child tax credit
  • MFTC - minimum family tax credit
  • PTC - parental tax credit.

Note 1: WfFTC was collectively known as "family assistance".

Note 2: CTC - child tax credit. There are a very small number of people who receive this tax credit but because their numbers are now so few; they are no longer reported on separately.