Working for Families Tax Credits
Updated 2026 MSD rates. Working for Families (WfF) is a package of tax credits from Inland Revenue (IRD) that helps families with dependent children. It is not a Work and Income benefit, but it is an important part of the welfare system for low-to-middle income families.
Components
1. Family Tax Credit (FTC)
The main tax credit for families with dependent children aged 18 or under (or 18–19 if still in secondary school).
| Child | Annual Rate (NZ$) | Weekly Equivalent |
|---|---|---|
| Eldest child | $7,488 | $144.00 |
| Each subsequent child | $6,084 | $117.00 |
2. Best Start
A payment for families with a new baby aged under 1 (or under 3 for low-income families). No hours test.
- Rate: $77 per week (up to $4,041 per year) for each child under 1 from 1 April 2026 (previously $65 per week before the increase).
- For children aged 1–3: the payment reduces once family income exceeds $79,000, at 21 cents per dollar above the threshold.
- Best Start is paid until the child turns 3.
3. Minimum Family Tax Credit (MFTC)
Topped up to ensure working families with children get at least a minimum net income from work. Now largely replaced by the expansion of the In-Work Tax Credit, but still available in some cases.
4. In-Work Tax Credit (IWTC)
For families who work a minimum number of hours (20 hours per week for sole parents, 30 hours combined for couples):
- $97.50 per week for families with dependent children (temporarily boosted to $147.50 per week from 1 April 2026 to 31 March 2027, a $50/week increase).
- Paid as part of the Family Tax Credit entitlement for eligible working families.
Income Thresholds and Abatement
- Full Family Tax Credit is available for families earning under $42,700 per year.
- Abatement rate: 27 cents per dollar of family income above $42,700.
- Best Start abates at 21 cents per dollar once family income exceeds $79,000 (for ages 1–3; from 1 April 2026, abatement also applies in the first year for new births).
How to Apply
- Apply through your myIR account with Inland Revenue.
- Provide details of your family income and dependent children.
- Payments can be made weekly, fortnightly, or as a lump sum at the end of the tax year (March).
Relationship to Benefits
Working for Families tax credits are separate from Work and Income benefits. You can receive both a main benefit and Working for Families if you meet the income criteria. However, your benefit income counts as income for the Working for Families assessment.
Child Support
If you receive Working for Families and are also entitled to child support, Inland Revenue will assess your eligibility separately. The two are not linked but may affect your overall family income.
How Working for Families Fits Together
Working for Families (WfF) is a package of tax credits paid by Inland Revenue, not a Work and Income benefit — a distinction that matters because you apply separately (through myIR) and payments are typically weekly, fortnightly, or as an annual lump sum after 31 March. The core components are the Family Tax Credit (for all families with dependent children), the In-Work Tax Credit (for families meeting work-hours tests), and Best Start (for children under 3).
The mechanism to understand is abatement: the full Family Tax Credit is paid when family income is below $42,700, then reduces by 27 cents per dollar of income above that. From 1 April 2026 the In-Work Tax Credit jumped from $97.50 to $147.50 per week (up to $7,670/year), a significant boost for working families — but it requires 20 hours/week for sole parents or 30 hours combined for couples, and it is not available to beneficiaries.
2026 Changes to Know
- Best Start rises to $77/week for children born on or after 1 April 2026 ($4,041/year), and abatement now applies from the first year for new births when family income exceeds $79,000 (21 cents per dollar).
- In-Work Tax Credit: $147/week maximum from 1 April 2026 (temporarily boosted from $97/week for 2026-27).
- Minimum Family Tax Credit guarantees working families at least $36,604 net per year (about $703/week after tax) — relevant only for families just above benefit levels.
- You can receive WfF while on a benefit in limited cases, but benefit income counts toward the family income test.
Action Steps
- Log in to myIR and check whether your family is already enrolled — many families miss out simply because they never applied.
- Estimate your entitlement with IRD's calculator or the MyIR "Working for Families" section.
- Choose your payment frequency: weekly suits families who budget week-to-week; annual lump sums suit those who want a savings boost.
- Report income changes promptly — WfF is reconciled against actual income after year end, and underpayments/overpayments are adjusted then.
Deep dive — 2026 update
Working for Families rates for 2026/27
| Payment | Weekly | Annual |
|---|---|---|
| Family tax credit — eldest child | $152.33 | $7,921 |
| Family tax credit — each subsequent child | $124.12 | $6,454 |
| In-work tax credit (1–3 children) | $147 | $7,670 |
| In-work tax credit — 4th and 5th child | +$15 each | +$780 each |
| Best Start (children under 3) | $77 | $4,041 |
| Minimum family tax credit | Tops up to $703 | $36,604 |
From 1 April 2026 the abatement threshold rose from $42,700 to $44,900 and the abatement rate from 27% to 27.5%. Only the family tax credit and Best Start abate.
How Working for Families interacts with a benefit
| Payment | While on a main benefit | After leaving the benefit |
|---|---|---|
| Family tax credit | Available | Available |
| In-work tax credit | Not available | Available if hours test met |
| Best Start | Available | Available |
| Minimum family tax credit | Not available | Available |
The in-work tax credit is what changes when you move into work: $147 a week for 1-3 children, requiring 20 hours a week for a single parent or 30 hours combined for a couple. Tell IRD in the same week you start work — the credit starts from the date you meet the hours test.
A worked example: leaving Sole Parent Support for part-time work
A sole parent with two children earning $600 a week before tax, previously on Sole Parent Support plus Accommodation Supplement:
- Earnings: $600 a week gross, about $516 net after tax at the M rate.
- Family tax credit: $276.45 before abatement; income over $44,900 a year ($600 × 52 = $31,200) means no abatement at all on this income level, so the full amount is payable.
- In-work tax credit: $147 a week, now available because the benefit has ended.
- Accommodation Supplement: continues at a reduced rate while the income test is met.
Total household income is typically higher than on the benefit, and the in-work tax credit plus the childcare subsidy are what make part-time work pay. Ask MSD and IRD to run the comparison before you decide.
Mistakes that turn a top-up into a debt
- Not updating your income estimate after starting work. An underestimated income creates a debt at year end.
- Assuming a benefit cancels everything. The family tax credit continues alongside a main benefit.
- Forgetting the hours test changes if your hours drop. Falling below 20 hours (single) or 30 hours (couple) stops the in-work tax credit.
- Missing the Best Start registration — payments start from the date you register for Working for Families, not the birth date.