Family tax credits in New Zealand can help eligible families manage the cost of raising dependent children. Through the Working for Families programme, qualifying households may receive financial support based on family income, the number of dependent children, work circumstances and other eligibility requirements.
For the 2026–27 tax year, some payment rates and eligibility settings have changed. Understanding which credits apply to your household, how family income is assessed and when to update Inland Revenue (IRD) can help you avoid receiving too little or having to repay an overpayment.
If you are unsure how Working for Families applies to your circumstances, DFK Orb360 O’Halloran Chartered Accountants can help you understand the tax and record-keeping considerations relevant to your situation.
What Are Family Tax Credits in New Zealand?
Family tax credits are payments available to eligible families under New Zealand’s Working for Families programme. The amount a family receives depends on factors such as family scheme income, the number and ages of dependent children, caregiving arrangements and the type of payment.
- Family Tax Credit: Financial support for eligible families with dependent children.
- In-work Tax Credit: Additional support for qualifying families who meet the paid-work requirements.
- Minimum Family Tax Credit: Support for eligible working families whose income is below the relevant threshold and who meet the minimum-hours and other requirements.
- Best Start: Support for eligible families with young children, subject to the applicable rules.
Eligibility is not determined by salary alone. Family scheme income and individual circumstances can affect the amount payable. Always confirm your entitlement using current IRD guidance.
What Are Working for Families Tax Credits?
Working for Families is a government support programme administered by Inland Revenue or, in some cases, the Ministry of Social Development. It is designed to help eligible families with the costs of raising dependent children.
The programme includes four main types of payments. You may qualify for one or more, depending on your circumstances.
1. Family Tax Credit
The Family Tax Credit is the main payment within Working for Families. It is available to eligible families with dependent children and is affected by family income, the number of children and shared-care arrangements.
For the 2026–27 tax year, the full annual rates are:
- Eldest or only child: $7,921 per year.
- Each subsequent child: $6,454 per year.
These are full rates, not a guarantee of what an individual household will receive. Entitlement may reduce as family income increases or where other eligibility rules apply.
2. In-work Tax Credit
The In-work Tax Credit provides additional support to families that meet the programme’s paid-work requirements. Eligibility depends on employment and family circumstances, income and other rules.
From 1 April 2026, the maximum In-work Tax Credit temporarily increased to $147 per week for eligible families with up to three children, with additional amounts available for qualifying families with more children. The temporary increase is subject to conditions and is scheduled to change after 31 March 2027; check IRD for the current rules before relying on these rates.
3. Minimum Family Tax Credit
The Minimum Family Tax Credit is intended to help eligible working families maintain a minimum level of after-tax income. You must meet specific income, employment-hours and other eligibility requirements.
It is not an automatic top-up for every low-income household. Check the current IRD criteria to determine whether your family qualifies.
4. Best Start
Best Start provides support to eligible families during a child’s first three years. From 1 April 2026, Best Start is income-tested from the first year, subject to the rules applying to the family.
Payment amounts and entitlement depend on the child’s age, family income and other eligibility requirements. Review the current IRD guidance before estimating your payment.
Family Tax Credit Rates for 2026–27
The following table summarises the full Family Tax Credit rates that apply from 1 April 2026 to 31 March 2027.
| Child | Full annual rate | Approximate weekly rate |
|---|---|---|
| Eldest or only child | $7,921 | $152 |
| Each subsequent child | $6,454 | $124 |
Important: These are full Family Tax Credit rates. Your actual entitlement may be lower depending on family scheme income and eligibility. Other Working for Families payments have separate rates and rules.
Who Is Eligible for Family Tax Credits in NZ?
You may qualify for Working for Families if you meet the applicable age, caregiving, residency and dependent-child requirements.
IRD generally considers whether you:
- Are aged 16 or older.
- Are the principal caregiver of a dependent child.
- Meet the relevant New Zealand residency requirements.
- Meet the income and payment-specific criteria for the credits you are applying for.
You do not necessarily have to be the child’s parent to qualify as the principal caregiver. Shared-care arrangements can affect how entitlement is calculated or allocated.
Receiving a government benefit, having a partner who works, being self-employed or experiencing a change in employment can affect eligibility differently for different credits. Check the rules for each payment rather than assuming that one circumstance automatically qualifies or disqualifies you.
How Family Income Affects Working for Families Payments
Family scheme income is an important factor in calculating Working for Families entitlement. It is not always identical to the salary shown on a payslip or the taxable income shown on a tax return.
Depending on the applicable rules, IRD may take account of different income sources and adjustments when calculating family scheme income. These can include certain trust or company-related amounts, passive income and other specified payments.
What Is the Family Tax Credit Income Threshold for 2026–27?
For the full Family Tax Credit rates, the family income threshold is $44,900. If your family income is above that amount, an abatement generally reduces your entitlement.
For the Family Tax Credit, the abatement is generally calculated at 27.5% of family income above $44,900. The final amount payable depends on the full entitlement and the applicable rules, including how any remaining abatement affects other credits.
For example, a family with more than one dependent child may have a higher full Family Tax Credit entitlement than a family with one child. However, the amount actually received still depends on income and other circumstances.
Use the official IRD Working for Families calculator to estimate your entitlement rather than relying on a general example.
How to Apply for Family Tax Credits
Eligible families can apply for Working for Families through IRD. In some circumstances, payments may be managed by Work and Income.
- Check eligibility: Review the official criteria for dependent children, caregiving, residency and income.
- Estimate your entitlement: Use the IRD calculator and provide accurate details about your family circumstances.
- Register or apply: Follow the instructions on the official IRD Working for Families website.
- Choose a payment option: Depending on your circumstances, you may be able to receive payments weekly, fortnightly or as a lump sum after the tax year.
- Keep your details updated: Tell IRD about changes to income, employment, relationship status, caregiving or the number of dependent children.
- Review your final entitlement: IRD assesses your actual entitlement using the relevant information for the tax year.
Start with the official Working for Families guidance for application steps and current requirements.
Common Family Tax Credit Mistakes to Avoid
Incorrect estimates or outdated details can lead to underpayments or overpayments. The following are common issues to watch for:
- Using salary as the only income measure: Family scheme income can involve additional income sources or adjustments.
- Not reporting changes promptly: A change in work, income, relationship status or shared care may affect entitlement.
- Assuming all credits have the same criteria: Each Working for Families payment has its own rules.
- Relying on outdated payment rates: Rates and eligibility settings can change between tax years.
- Assuming an estimate is a final decision: An online calculator provides an estimate, not a formal confirmation of entitlement.
How an Accountant Can Help With Family Tax Credit Questions
Family tax credits are administered by IRD, and the final decision on entitlement rests with the relevant government agency. However, an accountant may be able to help you understand how income, business activity and tax records relate to your wider financial position.
For example, if you are self-employed, a shareholder in a company or involved in a trust, it may be useful to understand how the relevant income and reporting rules apply to your circumstances. The treatment depends on the specific facts and the rules for the relevant tax year.
DFK Orb360 O’Halloran Chartered Accountants provides accounting and tax guidance for New Zealand businesses and individuals. If you need help understanding the tax considerations relevant to your situation, contact our team to discuss your requirements.
Frequently Asked Questions About Family Tax Credits
What are family tax credits in New Zealand?
Family tax credits are payments available to eligible families through Working for Families. They include the Family Tax Credit and other payments such as the In-work Tax Credit, Minimum Family Tax Credit and Best Start.
How much is the Family Tax Credit in 2026–27?
From 1 April 2026, the full annual Family Tax Credit rate is $7,921 for the eldest or only child and $6,454 for each subsequent child. Actual entitlement depends on family income and other eligibility rules.
What is the income limit for Family Tax Credit in NZ?
The full Family Tax Credit rates apply when family income is $44,900 or less. Above that threshold, entitlement generally reduces through an abatement calculation. Your final entitlement depends on your circumstances.
Can I receive Family Tax Credit if I am self-employed?
Self-employed people may qualify if they meet the relevant Working for Families criteria. Family scheme income and other eligibility requirements must be considered, so check your circumstances with IRD or a qualified adviser.
Can I receive Working for Families if I share custody of my child?
Shared-care arrangements can affect entitlement and how payments are allocated. IRD considers the applicable caregiving and dependent-child rules, so provide accurate information about your arrangement.
Are Family Tax Credit payments taxable?
Working for Families payments are generally tax credits rather than ordinary taxable income. However, the rules and treatment of other income sources can affect entitlement. Check the relevant IRD guidance for your situation.
How do I check my Working for Families entitlement?
Use the official IRD entitlement calculator and review the eligibility requirements. An estimate is not a final determination by IRD.
What happens if my income changes during the year?
Your payments may change if your family income or circumstances change. Update your details with IRD promptly to help reduce the risk of an overpayment or underpayment.
Where can I get help with family tax credit questions?
IRD is the primary source for eligibility, applications and payment decisions. If your questions involve business income, trusts, company income or wider tax matters, an accountant may be able to help you understand the relevant tax considerations.
Need Help Understanding Your Tax Position?
Family tax credit eligibility can become more complicated when your income changes, you are self-employed, or you have business or trust-related income. Getting clarity on your tax position can help you make informed decisions and keep your records in order.
Contact DFK Orb360 O’Halloran Chartered Accountants to discuss your accounting or tax questions. Tell us a little about your situation using the form below, and our team can review your enquiry and advise on appropriate next steps.
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This article provides general information only and is not personalised tax, legal or financial advice. Working for Families eligibility, payment rates and rules can change. Check current Inland Revenue guidance or seek advice relevant to your circumstances.
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