In 2004, the New Zealand Labor government introduced the package Working for Families as part of the 2004 budget. The package, which began operating on April 1, 2005, has three main objectives: to get paid for work; to ensure adequate income; and to support people "work".
The main component resembles a UK Job tax credit.
Both the New Zealand Ministry of Social Development and Land Revenue have an engagement in jointly delivering the package.
Video Working for Families
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This scheme pays "Working for Family Tax Credits" (formerly known as Family Assistance) to families with dependent children to help with the cost of raising the family. Dependent children are defined as aged 18 and under who are not working full time. The Family for Work tax credit includes four types of payments:
- Family tax credits: provide ongoing support to beneficiary families and workers with dependent children
- The tax credit in the workplace: available only for working families, which meets the minimum number of hours per week
- Minimum family tax credit: paid to working families to ensure they get the minimum annual after-tax income
- Parental tax credit: payable for the first eight weeks after birth to help with new baby costs
The Family-Working package also includes additional childcare and accommodation assistance, with an increased number of existing Accommodation Accommodations and Child Care Assistance available.
Family Tax Credits
Formerly known as Family Support, Family Tax Credits are paid to families with dependent children aged 18 years or younger. There are no job requirements to qualify for Family Tax Credits.
The amount paid depends on:
- total annual family income before tax
- number of dependent children
- ages of dependent children
The maximum amount of family tax credit increases with age and number of children. The eldest son collects a higher amount.
For the eldest child aged 16 to 18, the maximum tax credit increases by $ 13 per week. For dependent children (in addition to the eldest) aged 13 to 15 years, the maximum tax credit increases by $ 8 per week. For dependent children (in addition to the eldest) aged 16 to 18, the maximum tax credit increases by $ 29 per week.
In-house Tax Credits
Formerly known as In-Work Payments, In-Tax Credits supersedes Child's tax credit from April 1, 2006. Payments are paid to families with dependent children (aged 18 and under) who work with the number of hours required each week.
Couples must work at least 30 hours a week to qualify; single parents at least 20 hours a week. Families do not qualify if they accept the main form of state aid through social welfare.
From 2006 this amount is paid up to a maximum of $ 60 per week for 1 to 3 children, with an additional $ 15 per week for a fourth child and other additions (so families with five children can receive a maximum of $ 90 per week). The maximum amount changed in Budget 2015 to $ 72.50 per week, implemented on April 1, 2016.
Minimum Family Tax Credits
Formerly known as a family tax credit, and prior to it as a minimum family income guarantee, Family Minimum Family Tax Credit aims to ensure that the total annual income of families with dependent children is 18 years or younger, working with the required number of hours per week, not fall below the specified level. The minimum income level for the years 1 April 2010 to 31 March 2011 is set at $ 21,216 after taxes ($ 408 a week after tax). This will increase to $ 22,204 ($ 427 per week) starting April 1, 2011.
Families must work at least 30 hours a week (for couples) and 20 hours a week (for single parents). They do not qualify if they receive the main form of state aid through social welfare.
Annual and weekly amounts are changed every tax year.
Families who earn less than jobs, and who do not receive a form of social assistance tested for income, will receive payments that are equal to the difference between their income and the minimum income level.
Parental Tax Credits
Paid for family with newborn for the first 56 days (eight weeks) after the baby is born, Parental Credit Tax involves paying up to $ 150 a week ($ 1,200 for the period).
Parents who receive paid parents' leave or income-tested social welfare are not eligible for this payment.
Maps Working for Families
Earnings rating
The authorities assess income for tax credit purposes based on "household", which will consist of a pool of resources from up to two adults in families with dependent children.
Nearly all households earn under $ 70,000 per year, many households with children earning up to $ 100,000 per year, and some more income, are eligible to receive assistance.
Withdrawal of tax credits
The level of assistance to individual households depends on their income and on the number and age of children.
Withdrawal rate (rate of deduction) for Family Tax Credits, Parental Tax Credits and Working Tax Credit consist of 20%. Free deduction limit of $ 36,350 exists.
Family Tax Credit Minimum consists of "top-up" payments, so regardless of the amount earned, it will be charged up to the minimum amount per week (currently $ 434 after tax). It consists of 100% effective withdrawal with income received up to earnings level.
Some New Zealand households also receive money from increased income and tariff limits for the Child Care and Accommodation Support Supplement. Both types of assistance have separate withdrawal rates.
Impact and take-up rate
Under the current rate of payments and the rate of reduction, the Government of New Zealand has stated that three out of four families will be eligible for additional financial assistance under the Work for Families package.
In the tax year from April 1, 2005 to March 31, 2006, approximately 285,000 families received Family Tax Credits. In August 2006 the recipient family received an average of $ 110 per week tax credit, an increase of $ 30 per week compared to August 2004. Families paid by Inland Revenue received an average of $ 138 per week tax credit, an increase of $ 54 per week.
Former Minister of Social Development and Employment David Benson-Pope stated that Working for Families has made beneficiaries better about $ 31.00 per week, and families working about $ 64.00 per week, with April 2007 raising family income further. Estimates show that Working for Families has reduced child poverty by 70% since it was introduced. This will equalize at least 70,000 children who are excluded from income poverty by Working for Families.
Former Minister David Benson-Pope also stated that Working for Families has made it easier for some women to start working, while in other families it makes it easier for a couple to spend more time at home.
Government evaluations (see below) have found that the number of Beneficiaries for Domestic Purpose since the Working for Families package has dropped by 8,000.
Opinions on package
The Working for Families package has received mixed responses. Some (such as University Victorian Professor Robert Stephens) hailed the package to encourage adults to benefit, and to target families in need.
Others, however, have criticized the package for potentially expanding into the relatively wealthy and to increase the effective marginal tax rate for many people. Economist Gareth Morgan, for example, commented on how some (generally middle-income) people can face an effective marginal tax rate of over 100%.
Packages (with the exception of tax credit components, accommodation, and child care) do not cover families with Benefits of Household Interest, or non-employed families. Critics say these social groups will get worse, and lag further (relatively speaking) with no access to the tax credit in the workplace and the minimum family tax credit component.
The Child Poverty Action Group has initiated legal proceedings against the Government of New Zealand for discriminating against those who do not work in the "Working for Families" package. This case focuses on In-Work Tax Credit and on Child Tax Credit substituted. The Action Group estimates that at least 175,000 children have been "left behind". In the judgment of the Human Rights Review Tribunal, it is stated that payment of taxes on workplace credit is discriminatory, but in this case, justified. The Action Group calls for a decision that claims discrimination is not justified.
Susan St. John has supported poverty prevention over poverty alleviation, advocating policies such as simple universal basic payments indexed on wages and prices for pensioners - is not dependent on work. He criticized the Work for Families package for not providing additional income until 2005, giving nothing to the poorest in 2006 and only a slight increase in 2007. He stated: "The vast majority of Working for Families is based on defective logic that all families need to get out of poverty is an incentive to benefit. "
Phil O'Reilly has included Work for Families in a list of alleged low-quality government purchases that supposedly contribute to higher interest rates and lower productivity levels.
Some people find the name of the ambiguous "Work for Families" package. While proponents describe "working for the family" as meaning "making efforts for the benefit of the family," others interpret the phrase as "[giving] family work to do".
John Key called the "silent communism" scheme but did not repeal or cut back the Working Family tax credit, during his time as Prime Minister.
Evaluation and research
The first official evaluation of the Working for Families package illustrates the public awareness of the package and details of the Working-class rights recipient class by the end of August 2006. The report cites high levels of awareness of overall and high-level packages. acceptance of Working for Families payments, meeting or exceeding initial estimates. Since the introduction of the package, the number of families receiving Domestic Demographic Benefits has fallen by 8,000; with 2,600 beneficiaries canceling benefits since the implementation of In-Work Tax Credits. - While awareness of the packages and advertisements appears high, the evaluation report found that only about three quarters of those who believe they receive tax credits actually do so when matched with administrative records. Furthermore, of the people surveyed who received a tax credit only two-thirds realized that they did.
Several articles have discussed the potential or theoretical impact of the Working for Families package.
One study by Auckland University economist Tim Maloney and American welfare reform researcher John Fitzgerald found that on average, working moms spent three additional hours a week working after the 2005 and 2006 changes from the Working for Families package. Initial speculation shows that working hours will fall because higher income paid to families with dependent children will mean that mothers can spend less time in work. Maloney believes that "some working women may increase their working hours to qualify for family assistance payments". The authors categorize the results as preliminary - given the introduction of the relatively new Working-Family package.
A study by Harvard epidemiologist Frank Pega and Ichiro Kawachi found that changes in the In-Work Tax Credit, or Family Tax Credits are not associated with significant changes in self-assessed health, a measure of general health status. However, this study found that each additional year received Family Tax Credits led to a very small reduction in self-assessed health, but that did not impact tobacco smoking among the elderly.
Further evaluations completed by the Ministry of Social Development and Land Revenue include:
- Summary report from the Working for Families package evaluation.
- Receipt for Families
- Job Alert for Families - Update 2007
- Working incentives for single parents: The impact of the labor market on incentive change and financial support
- Employment incentives for single parents: The impact of the labor market on changes in incentives and financial support. Technical report.
Timeline
October 2004
Announcement of the Work for Families package as part of Budget 2004. The first amendment took effect from October 2004. Changes include:
- Delivered Accommodation Supplements for beneficiaries
- Accommodations Sign in addition and threshold reduction increases for non-help recipients
- Childcare Costs and OSCAR are increasing and aligned, and the revenue threshold is increasing
April 2005
Phase One of the implementation of Working for Families was implemented from 1 April 2005 (with further implementation released in October 2005). Changes include:
- Family tax credit rates increased by $ 25 for the first child and $ 15 for additional children
- The child component of the main income allowance moves to the family tax credit amount
- Cash Support, Unsupported Child Support, and Orphan Child Benefit Rate increased by $ 15 per week
- Accommodation Additional maximum rates increase in some areas with high housing costs
- Family tax credits are treated as revenue for Special Benefits, with standard fees set at 70% of key benefits plus family tax credits for people with children
- Childcare costs and OSCAR are up 10% more
April 2006
The Implementation of Phase Two Work for Families was implemented from 1 April 2006. The changes include:
- The workplace tax credit supersedes Child Tax Credit: paying up to $ 60 per week for a family of three, and up to an additional $ 15 per week for each other
- The minimum family tax credit limit increases from $ 15,080 to $ 17,680
- One more substantially reduced threshold of $ 35,000 replaces two family tax credit reduction limits of $ 20,356 and $ 27,481
- The 18% reduction rate applicable to the lower abatement threshold for family tax credits disappeared completely and the 30% rate applicable to the higher abatement threshold was reduced by 20%
- Introduction of Temporary Supplemental Support to replace the Special Benefit.
April 2007
Phase Three involves the final component of the Working for Families implementation and is implemented from 1 April 2007. The changes include:
- Family credit tax rate increases $ 10 per week per child
- The income limit for the minimum family tax credit increases to $ 18,044
- The regular inflation adjustment is incorporated into the 2007 Income Tax Act to prevent the erosion of payments over time. The number of family tax credits and free deduction thresholds to increase when inflation reaches five percent cumulatively. The minimum family tax credit should be reviewed annually. In-house tax credit and parental tax credits will be reviewed every three years.
April 2008
- The after-tax income limit for the minimum family tax credit increases to $ 18,460
October 2008
While the package has been fully implemented with the final phase on 1 April 2007, the 2007 Income Tax Act is provided for regular adjustments to tariffs based on the cumulative movement in the New Zealand Consumer Price Index; a minimum 5% movement is required before the price will be changed. This increase will take effect from April 1 of the following year when changes are triggered based on actual data published by Statistics New Zealand.
As part of Budget 2008, the Labor Government amended the 2007 Income Tax Act to increase the family tax credit rate and the rate of free deduction with the expected movement in the Consumer Price Index of 5.22%. This increase will take effect from 1 October 2008. This requires the Department of Inland Revenue to develop the combined rate and income limits for the tax year 1 April 2008 to 31 March 2009 (average annual amount before October 1, 2008 and annual amount after 1 October 2008 inflation adjustment).
- The previous reduction free limit is $ 35,000. From October 1, 2008 increased to $ 36,827. The composite threshold for this year is $ 35,914
April 2009
- The after-tax income limit for the minimum family tax credit increases to $ 20,540
April 2010
- The after-tax income limit for the minimum family tax credit increases to $ 20,800
October 2010
As part of the 2010 Budget, the National Government amended the 2007 Income Tax Act to increase the number of family tax credits with estimated movements in the Consumer Price Index by 2%; expected results from an increase in GST rate from 12.5% ​​to 15%. The increase is valid from 1 October 2010. The combined amount and income limit for tax year 1 April 2010 to 31 March 2011 apply.
The index of the free-deduction threshold for the Work for Families tax credit has been removed from the 2007 Income Tax Act and the free-to-free threshold will remain at $ 36,827. Future indexes of family tax rate will neglect tobacco-related price movements in the Consumer Price Index.
April 2011
- The after-tax income threshold for the minimum family tax credit increases to $ 22,204
References
External links
- The Working for Families website
- Inland Revenue Website
Bibliography
Government and Politics of New Zealand , edited by Raymond Miller, 4th ed., 2006, Melbourne: Oxford University Press. ISBN 978-0-19-558492-9
Source of the article : Wikipedia
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