Tax Credits for Beneficiaries

August 17, 2012 New Zealand Finance

Tax Credits for BeneficiariesA new Bill in Parliament could soon see unemployed students and beneficiaries receive in-work tax credits.

On August 16th the Income Tax (Universalisation of In-work Tax Credit) Amendment Bill was drawn from the ballot for voting by Parliament. The Bill proposes that the current In-Work Tax Credit (IWTC) system be extended and offered to all individuals receiving Working for Families tax credits.

Under present regulations, the IWTC is set at NZD 60 per week and can be claimed by families who work a total of 30 hours per week, or individuals working 20 hours per week. The new Bill sets forward that the IWTC should be extended to individuals who do not meet the minimum work requirements, and, if passed, could see unemployed students and beneficiaries also receive the tax credit.

Explaining the rationale behind the Bill, the author of the proposal Green MP Catherine Delahunty said that “…this Bill will replace the in work tax credit with a targeted payment for all children who need it, regardless of whether their parents work.” She went on to say that “…one quarter of New Zealand children grow up in poverty and three out of five of them are in beneficiary households. Supporting this Bill is a tangible action this Parliament can take to reducing our high rates of child poverty.”

The new Bill is already receiving some criticism, with the ACT Leader John Banks saying that the proposal is “just plain wacky” and “…is a good example of why the Greens should be out of work come the 2014 election.”

Photo by B.T. Indrelunas