Dunne announces changes to tax credit

Changes to the minimum family tax credit and the prescribed rate to calculate fringe benefit tax, were today announced by Revenue Minister Peter Dunne.

Low-income working families, eligible for the minimum family tax credit, will get a small increase from April 1 next year.

Families are now guaranteed a net income of $20,540 a year. The changes, approved yesterday, will increase that to $20,800, Mr Dunne said.

"The minimum family tax credit helps support families moving off a benefit and into paid work. It ensures that these working families are better off as a result of being in the workforce."

For the year ended March 2009, about 2700 families were eligible for the tax credit.

The 6.41 per cent rate used to calculate fringe tax benefit tax on low-interest, employment-related loans has been brought down to 6.00 per cent, beginning on October 1.

Order in Council set the new rate yesterday. It is regularly reviewed to align with results of the Reserve Bank's survey of variable first mortgage housing rates.

- NZPA