Thousands of families to get tax break

David Benson-Pope

Around 85,000 more families will get tax assistance under changes that come into force on Saturday.

Social Development and Employment Minister David Benson-Pope said that almost three in every four New Zealand families with dependent children will be entitled to Family Assistance tax credits under the Working for Families package.

The National Party's taxation policy has focussed on across the board cuts, rather than limiting them to families. Labour's policy has been criticised in some quarters for not assisting people who do not have children.

Mr Benson-Pope visited a Wellington call centre handling Working For Families inquiries today where he met call centre worker Nigel Ritchie.

Mr Ritchie is married with two children, one aged three and the other nine months, and earns $37,500. From Saturday his Family Assistance under the Working For Families package would increase to $334 per fortnight, up more than $200 a fortnight.

When the Childcare and Accommodation Supplement components of the Working For Families package are added, Mr Ritchie's family will get around $270 per week -- making them $110 a week better off from Saturday.

"Ninety per cent of the almost $1.6 billion package is being delivered to families through the tax system," Mr Benson-Pope said.

"Families will access their tax credits from Inland Revenue, which will calculate and pay their entitlements."

"This is the most effective way to target and support our New Zealand families and children."

Mr Benson-Pope said supporting families and children via tax credits was widespread in the OECD. Australian families were eligible for the Family Tax Benefit up to a combined family income of around A$90,000, depending on age and number of children.

The United Kingdom provided assistance to help with the costs of children, to beneficiaries and working families through a Child Tax Credit, for which around 85 per cent of families are eligible.

"Contrast this with across the board tax cuts, which deliver the highest gains to people with the highest incomes, regardless of whether they have children or not," said Mr Benson-Pope.

- NZPA