If you’re a new or returning resident to New Zealand after 10 years absence, you must choose between getting Working for Families payments (including Best Start) or keeping your temporary tax (transitional residence) exemption (TTE) on your foreign-sourced income.
What is a temporary tax exemption (TTE)?
These apply for 4 years to any income (except salary or wages) you’re getting from overseas. You may have the exemption if you’re a new migrant, or a New Zealander returning home after being overseas for 10 years or more and is commonly known as being a 'transitional resident'.
You cannot have both
You cannot have both Working for Families and a TTE. That means if you apply for Working for Families, you’ll lose your exemption.
Once you’ve applied for Working for Families, you cannot change your mind and reinstate your previous TTE.
Rules when you have a partner
Are you in a relationship?
A household can either have Working for Families or a TTE, they cannot have both.
If you have the TTE and apply for Working for Families, you will lose your exemption.
If you have the TTE and your partner is the carer of the children, they will not be able to apply for Working for Families. This is because they don’t meet the definition of being a principal caregiver while you have the TTE.
If you do not have a TTE but your partner does, you cannot apply for Working for Families. This is because you do not meet the definition of being a principal caregiver while your partner has the TTE.
Work out what’s best for you before you apply
If you have a TTE and you qualify for Working for Families, we recommend you consider your options before you apply.
You can always apply for Working for Families once your exemption ends.
Non-resident visitors
If you’re visiting New Zealand, you’re unlikely to qualify for Working for Families. However, in some cases, you may be able to receive Working for Families or qualify for a non-resident visitor income tax exemption. You cannot have both.
If you or your partner receive Working for Families entitlement your status as a non-resident visitor and any non-resident visitor income tax exemption will end.
Once you’ve applied for Working for Families (including Best Start) you cannot change your mind.