Raising children is expensive, and the New Zealand government recognises this through the Working for Families (WFF) tax credit scheme. Working for Families provides regular payments to help families with dependent children cover everyday costs. If you are a working parent or caregiver in New Zealand, you may be entitled to more support than you realise.
In this guide, we will explain the different types of Working for Families payments, who qualifies, how much you could receive, and how the income abatement works.
What Is Working for Families?
Working for Families is a package of tax credits designed to support families with dependent children (aged under 18, or 18 if still at school). The credits are income-tested, meaning the amount you receive depends on your family income. As your income increases, the credits gradually reduce.
There are several components to Working for Families:
- Family Tax Credit (FTC) — the main payment, available to all qualifying families.
- In-Work Tax Credit (IWTC) — an additional payment for families where the parents are working a minimum number of hours.
- Best Start Tax Credit — a payment for families with children born on or after 1 July 2018, paid for the first three years of the child's life.
- Minimum Family Tax Credit (MFTC) — a top-up for very low-income working families to ensure a minimum after-tax income.
Family Tax Credit (FTC)
The Family Tax Credit is the core component of Working for Families. It is available to any family with dependent children, whether you are employed, self-employed, or receiving a benefit. The amount depends on the number and ages of your children.
For the 2025-26 tax year, the FTC rates are approximately:
- Eldest child — $127.73 per week (aged 16-18) or $113.04 per week (aged under 16)
- Subsequent children — $104.08 per week (aged 16-18) or $91.25 per week (aged 13-15) or $83.58 per week (aged under 13)
These rates are per child and are added together to calculate your total weekly FTC entitlement before any abatement is applied.
In-Work Tax Credit (IWTC)
The In-Work Tax Credit provides an additional $72.50 per week for families where the parents are working the required minimum hours. For a couple, the combined requirement is normally 30 hours per week. For a sole parent, it is 20 hours per week.
If you have more than three children, the IWTC increases by an additional $15 per week for each child beyond the third.
The IWTC is not available to families receiving a main benefit (such as Jobseeker Support or Sole Parent Support). It is specifically designed to reward and support families where at least one parent is in paid employment.
Best Start Tax Credit
The Best Start payment is $73.00 per week for each child born on or after 1 July 2018, paid from birth until the child turns three. For the first year, it is paid regardless of family income. From age one to three, it is income-tested and abated along with the other WFF payments if your family income exceeds the threshold.
Best Start replaced the old Parental Tax Credit. If you have a baby, you will usually be enrolled for Best Start as part of the birth registration process.
Minimum Family Tax Credit (MFTC)
The Minimum Family Tax Credit is a safety net for very low-income working families. It tops up your after-tax income to a guaranteed minimum level. For 2025-26, the minimum family income (after tax) is approximately $32,864 per year.
To qualify, you must be working the same minimum hours as the IWTC (30 hours per week for a couple, 20 for a sole parent) and not receiving a main benefit. The MFTC is calculated weekly and ensures that after tax and other deductions, your family takes home at least the minimum amount.
Income Abatement: How Your Income Reduces the Credits
Working for Families payments are income-tested. This means as your family income increases above a certain threshold, the payments gradually reduce. This is called abatement.
For the 2025-26 year, the abatement threshold is $42,700. If your combined family income is below this amount, you receive the full entitlement. For every dollar of income above $42,700, your WFF payments reduce by 27 cents.
For example, if your family income is $72,700 (which is $30,000 above the threshold), your WFF payments would be reduced by $30,000 x 27% = $8,100 per year. If your total entitlement before abatement was $10,000, you would receive $1,900 after abatement.
This is why Working for Families is primarily targeted at low-to-middle-income families. Higher-income families may receive a small amount or nothing at all, depending on the number of children they have.
How to Apply and Receive Payments
You can apply for Working for Families through Inland Revenue (myIR) or through the Ministry of Social Development (if you are receiving a benefit). You will need to provide details of your family income, the number and ages of your children, and your work hours.
Payments can be made weekly or fortnightly directly to your bank account, or you can choose to receive the credit as a lump sum at the end of the tax year when your income is confirmed. Most families opt for regular payments to help with ongoing costs.
If you choose regular payments, they are based on your estimated annual income. At the end of the tax year, IRD squares up the actual amount you were entitled to against what you were paid. If you were overpaid (because your income was higher than estimated), you will need to repay the excess. If you were underpaid, you will receive the difference.
It is important to keep your income estimate up to date. If you get a pay rise, change jobs, or your partner's income changes, update your estimate with IRD to avoid a large end-of-year adjustment.
Common Mistakes and Tips
- Not applying at all. Many families who qualify do not claim because they assume they earn too much. Check your eligibility — you might be surprised.
- Underestimating income. If you estimate your income too low, you will be overpaid during the year and have to repay the difference. Be realistic with your estimate.
- Not updating income changes. If your income changes during the year (new job, overtime, partner starts or stops working), tell IRD promptly.
- Forgetting to claim Best Start. If you have a baby, make sure Best Start is set up. It is usually automatic through birth registration, but check with IRD if you are not receiving it.
Final Thoughts
Working for Families is a significant source of income support for New Zealand families. A family with two children under 13 and a combined income of $55,000 could receive over $6,000 per year in WFF payments. That is real money that helps with groceries, school costs, and everyday family expenses.
Check your eligibility, apply through myIR, and keep your income estimate up to date. For a broader view of your after-tax income including WFF entitlements, use our New Zealand salary calculator to see the full picture.