Taxation (Working for Families) Act 2004

1: Title
This Act is the Taxation (Working for Families) Act 2004.
2: Commencement
1: Sections 5(1) (2) 7(1) 8(1) 9(1) 11(1)-(11) 12(1) 18(1) 19(1)-(4) 23(1) 24(1)-(4) 25(1) 26(1) 27(1) sections 5(3) 7(2) 8(2) 9(2) 11(12) 12(2) 18(2) 19(5) 23(2) 24(5) 25(2) 26(2) 27(2)
2: The rest of this Act comes into force on the day after the date on which it receives the Royal assent.
3: Purpose
The purpose of this Act is to amend the Income Tax Act 2004 Child Support Act 1991 Housing Restructuring Act 1992 Privacy Act 1993 Tax Administration Act 1994 Amendments to
Income Tax Act 2004
4: Calculation of subpart KD credit
1: Section KD 2(3)
3: The amount of the family support credit for an eligible period is given by the following formula: where amount
a: for the eldest dependent child for whom the person is a principal caregiver during the period, 1 of the following:—
i: $3,744, if the child is under 16 years of age:
ii: $4,420, if the child is 16 years of age or older:
iii: a weighted average of the amounts in subparagraphs (i) and (ii)
b: for each dependent child for whom the person is a principal caregiver during the period, other than the eldest dependent child, 1 of the following:—
i: $2,444, if the child is under 13 years of age:
ii: $2,860, if the child is 13, 14, or 15 years of age:
iii: $3,900, if the child is 16 years of age or older:
iv: a weighted average of the amounts in subparagraphs (i) and (ii)
v: a weighted average of the amounts in subparagraphs (ii) and (iii) days
2: Section KD 2(6)
6: The amount of the family credit abatement for an eligible period is calculated by the following formula: where— full-year abatement
a: if the person has no spouse during the eligible period and—
i: the person's specified income for a specified period containing the eligible period is not more than $20,356, nil:
ii: the person's specified income for a specified period containing the eligible period is more than $20,356 but is not more than $27,481, 18 cents for each complete dollar of the excess:
iii: the person's specified income for a specified period containing the eligible period is more than $27,481, the amount of $1,282.50, increased by 30 cents for each complete dollar of the excess:
b: if a person has a spouse during the eligible period, and—
i: the person's specified income, their spouse's specified income, or the sum of those specified incomes, as the case may be, for a specified period containing the eligible period is not more that $20,356, nil:
ii: the person's specified income, their spouse's specified income, or the sum of those specified incomes, as the case may be, for a specified period containing the eligible period is more than $20,356 but not more than $27,481, 18 cents for each complete dollar of the excess:
iii: the person's specified income, their spouse's specified income, or the sum of those specified incomes, as the case may be, for a specified period containing the eligible period is more than $27,481, the amount of $1,282.50 increased by 30 cents for each complete dollar of the excess NRFFS
6B: For the purpose of subsection (6) ring-fenced family support recipient
a: has no spouse, receives an income-tested benefit and derives annualised specified income that is less than the amount specified in section KD 2(6)(a)(i)
b: has a spouse, receives an income-tested benefit and derives annualised specified income that together with the annualised specified income of the person's spouse is less in total than the amount specified in section KD 2(6)(b)(i)
6C: In calculating the annualised specified income under subsection (6B)
a: section KD 1(3)(a) and (b)
b: no regard may be had to income from employment that is derived in the calendar month as a result of an extra pay period that occurs in that month; and
c: for a person who derives, for part of an income year, income to which section OB 2(2)
3: Subsections (1) (2)
5: Calculation of family tax credit
1: In section KD 3(3) amount amount section KD 5C .
2: In section KD 3(5) amount amount section KD 5C .
3: Subsections (1) (2)
6: Credit of tax by instalments
1: Section KD 5(2)
2: An application under subsection (1) or (1A)
a: be in the prescribed form; and
b: be signed by the person and any other person who, at the time at which the application is made, expects to be, in the elected period, a spouse in relation to the person; and
c: give, for each signatory to the application, a complete statement of—
i: the net income that is expected to be attributable to the tax year referred to in subsection (1) or (1A)
ii: the net income that is expected to be attributable to the elected period; and
d: elect whether the interim instalments should be paid weekly or fortnightly; and
e: contain such other information as the Commissioner may require; and
f: be accompanied by the information required by subsection (2AAA)
2AAA: An application under subsection (1) or (1A)
a: for a signatory who expects to derive income from employment, evidence of the amount of income from employment (if any) derived by the signatory in the period of one month immediately preceding the date on which the application is made:
b: for a signatory who expects to derive income from a business,—
i: a copy of the annual accounts of the business for the tax year (or the accounting year that, under this Act, corresponds with the tax year) immediately preceding the tax year that contains the elected period; or
ii: if the Commissioner is satisfied that the annual accounts referred to in subparagraph (i)
iii: a set of budgeted accounts of the business for the tax year (or the accounting year that, under this Act, corresponds with the tax year) that contains the elected period; or
iv: other evidence that is acceptable to the Commissioner in relation to the business for the tax year (or the accounting year that, under this Act, corresponds with the tax year) that contains the elected period:
c: unless paragraph (d)
d: in the case of a child that has died or is given up for adoption, a birth certificate or other evidence acceptable to the Commissioner verifying the birth or existence of the child for whom a credit of tax is claimed.
2: In section KD 5(2AA) subsection (2)(a) subsection (2AAA)(a)
3: In section KD 5(2AB) subsection (2)(d) subsection (2AAA)(d)
4: In section KD 5(4)(b) section KD 5(4)(c)(i) to (iv) fortnightly
5: In section KD 5(6) under subsection (4) for the purpose of subsection (4)
6: In section KD 5(6A)(b)(ii) section KD 5B sections KD 2 and KD 3
7: Section KD 5(10)(c)
c: is advised by the chief executive of the department currently responsible for administering the Social Security Act 1964 sections 84 or 85G of the Tax Administration Act 1994 .
8: Subsections (1) to (7)
7: Section KD 5B
1: Section KD 5B
2: Subsection (1)
8: New
section KD 5C
1: Before section KD 6
KD 5C: Order in Council to increase amount of family tax credit
The Governor-General may, by Order in Council, increase the figure in the definition of the item amount
a: section KD 3(3)
b: section KD 3(5)
2: Subsection (1)
9: Chief executive to deliver credit of tax
1: In section KD 6(1A)(b) section KD 5B section KD 2
2: Subsection (1)
10: Commissioner to deliver credit of tax by instalments
1: In section KD 7(1) fortnightly
2: After section KD 7(2A)
2B: If the Commissioner considers, on the basis of information provided under section 85G of the Tax Administration Act 1994 Social Security Act 1964
a: commences on the day following the day that the chief executive specifies as being the last day for which the person is entitled to the specified benefit, or as the case may be, a subpart KD credit paid under section KD 6(1)
b: ends on the earlier of—
i: the day preceding the first day specified in a certificate of entitlement subsequently issued under section KD 5
ii: a period of not more than 8 weeks, commencing on the first day referred to in paragraph (a)
2C: If under section KD 6(1B) subsection (2B) subsection (2B)(b)(ii) Social Security Act 1964
3: Subsections (1) (2)
11: Definitions
1: This section amends section OB 1
2: The definition of child tax credit child tax credit subpart KD section KD 2(4)
3: In the definition of eligible period paragraph (d) day day; and
4: In the definition of eligible period paragraph (d)
e: the composition of a subpart KD .
5: The definition of family credit abatement family credit abatement subpart KD section KD 2(6)
6: The definition of family support credit family support credit subpart KD section KD 2(3)
7: The definition of family tax credit family tax credit section KD 3
8: In the definition of income-tested benefit, paragraphs (b) and (c) are omitted.
9: After the definition of interest interim instalment section KD 5(2)
10: The definition of parental tax credit parental tax credit subpart KD section KD 2(5)
11: After the definition of specified base cost for 1983 income year property specified benefit section KD 7(2B) Social Security Act 1964
12: Subsections (1) to (11) Amendments to
Income Tax Act 2004
12: Family support and family plus
1: Section KD 1A(2)
2: Family plus consists of the in-work payment, or the child tax credit continued under section KD 2AAAB
2: Subsection (1)
13: Calculation of subpart KD credit
1: The formula in section KD 2(2) FSC + IWP or CTC + PTC - FCA
2: In section KD 2(2) CTC IWP CTC
a: the in-work payment for the eligible period calculated under section KD 2AAA
b: the child tax credit for the eligible period calculated under subsection (4)
i: is not entitled to the in-work payment for the eligible period; and
ii: is entitled to the child tax credit for the eligible period under section KD 2AAAB .
3: In section KD 2(3) paragraphs (a)(i) (ii) paragraphs (b)(i) to (iii) amount or such greater amount as may be prescribed by the Governor-General by Order in Council under section KD 5C
4: In section KD 2(5) amount or such greater amount as may be prescribed by the Governor-General by Order in Council under section KD 5C $1,200
5: In section KD 2(6) full-year abatement paragraphs (a) (b)
a: if the person has no spouse during the eligible period and the person's specified income for a specified period containing the eligible period is more than $27,500 or such greater amount as may be prescribed by the Governor-General by Order in Council under section KD 5C
b: if the person has a spouse during the eligible period and the person's specified income, their spouse's specified income, or the sum of those specified incomes, as the case may be, for a specified period containing the eligible period is more than $27,500 or such greater amount as may be prescribed by the Governor-General by Order in Council under section KD 5C .
6: In section KD 2(6B)(a) section KD 2(6)(a)(i) section KD 2(6)(a) section KD 2(6B)(b) section KD 2(6)(b)(i) section KD 2(6)(b)
7: Subsections (1) to (6)
14: New
sections KD 2AAA KD 2AAAB
1: After section KD 2
KD 2AAA: In-work payment
1: A principal caregiver is entitled to the in-work payment for an eligible period in relation to a child if, for the eligible period,—
a: the principal caregiver is aged 16 years or over; and
b: the principal caregiver cares for the child—
i: whose care is primarily the responsibility of the principal caregiver; and
ii: who is being maintained as a member of the principal caregiver's family; and
iii: who is financially dependent on the principal caregiver and includes a child for whom payments are made under section 363 of the Children, Young Persons, and Their Families Act 1989 section 28 or 29 of the Social Security Act 1964
c: either the principal caregiver satisfies the residence requirements of subsection (3) subsection (4)
d: either or both of the principal caregiver and the principal caregiver's spouse is a person to whom subsection (7)
i: has, from an activity, income that satisfies the requirements of subsection (5) subsection (6) or (7) or paragraphs (c), (d), (e), (f), or (g) full-time earner
ii: is a full-time earner, or would normally be a full-time earner, engaged in employment if the income referred to in subparagraph (i) paragraph (d) employment
e: neither the principal caregiver nor the principal caregiver's spouse receives an income-tested benefit, or a payment of the kind described in paragraph (xi) salary or wages section 32(2) of the War Pensions Act 1954
2: The amount of the in-work payment for a principal caregiver for an eligible period is calculated using the formula: where— amount A section KD 5C amount B section KD 5C weeks subsection (1)(d)(i) and (ii) children
a: 3:
b: the number of children in relation to whom the principal caregiver is entitled to the in-work payment.
3: A principal caregiver satisfies subsection (1)(c)
a: the principal caregiver has been both resident and pre-sent in New Zealand for a continuous period of 12 months at any time; and
b: on the date on which a credit of tax is claimed under section KD 2
4: A child satisfies subsection (1)(c)
5: Income from an activity satisfies this subsection if the income is—
a: a source deduction payment that is not—
i: described in paragraph (b)(v), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), and (xvi) salary or wages
ii: a withholding payment of the kind specified in Part E of the Income Tax (Withholding Payments) Regulations 1979
b: income to which section OB 2(2)
c: income from a business carried on for profit.
6: A person who satisfies the requirements of subsection (1)(d)(ii) subsection (1)(d)(ii)
7: A person who satisfies the requirements of subsection (1)(d)(ii) subsection (1)(d)(ii) subsection (1)(d)(ii)
8: A person is treated as satisfying subsection (1)(d)
a: the person is receiving a child tax credit for an eligible period ending on 31 March 2006; and
b: the person or the person's spouse, on or after 1 January 2006, suffered an incapacity due to personal injury by accident within the meaning of section 26 of the Injury Prevention, Rehabilitation, and Compensation Act 2001
c: weekly compensation within the meaning of section 6 of the Injury Prevention, Rehabilitation, and Compensation Act 2001
d: the person or their spouse would have satisfied the requirements of subsection (1)(d)(i) and (ii)
KD 2AAAB: Continuation of child tax credit payments
A person is entitled to continue to receive a child tax credit calculated under section KD 2(4)
a: the person is eligible for a child tax credit in relation to a child for an eligible period ending on 31 March 2006; and
b: the person is not eligible for an in-work payment under section KD 2AAA
c: the person continues to be eligible for a child tax credit in relation to a child at all times after 31 March 2006.
2: Subsection (1)
15: Rules for subpart KD credit
1: Section KD 2AA(1)
1: This section applies for the purposes of sections KD 2, KD 2AAA, and KD 2AAAB
2: After section KD 2AA(2)
2B: A person is a principal caregiver of a child for an eligible period under section KD 2AAA(1)
2C: When subsection (2B) section KD 2AAA(1)(b)
2D: A person who is a principal caregiver under subsection (2) or (2B)
3: In section KD 2AA(3) A subpart KD credit A family support credit or a parental tax credit
4: After section KD 2AA(3)
3A: If 2 persons are eligible for a child tax credit or an in-work payment in relation to a child for an eligible period, the amount of the credit of tax to which each is entitled is not affected by the eligibility of the other person for a credit of tax.
5: Subsections (1) to (4)
16: Calculating net contributions to family support credit, child tax credit, and parental tax credit
1: In the heading for section KD 2A in-work payment, family support credit
2: In section KD 2A
a: in the words before paragraph (a) in-work payment, family support credit
b: in paragraph (a) in-work payment, family support credit
c: paragraph (c)(ii)
ii: secondly, to reduce the amount of the in-work payment or, as the case may be, the child tax credit corresponding to the period; and .
3: Subsections (1) (2)
17: Credit of tax by instalments
1: In section KD 5(4)(c)
iib: the amount of credit (if any) after abatement contributed by the in-work payment to the interim instalment: .
2: Subsection (1)
18: Section KD 5C
1: Section KD 5C
KD 5C: Adjustment of family support amounts, abatement threshold amounts, amounts of in-work payment and parental tax credit, and amount of family tax credit
1: The Governor-General may from time to time, by Order in Council,—
a: increase the amount of the family support credits specified in section KD 2(3) section KD 2(6)
i: correspond to the movement in the quarterly all groups index number of the New Zealand Consumers Price Index:
ii: are rounded up to the nearest whole dollar, with-out affecting the calculation of later increases made under this paragraph:
b: increase the amount of the parental tax credit specified in section KD 2(5)
c: increase the amount of the in-work payment specified in section KD 2AAA
d: increase the amount of the family tax credit in sections KD 3(3) and KD 3(5)
e: replace Schedule 12
2: An Order in Council under subsection (1)(a)
a: in the case of the first Order in Council made under subsection (1)(a)
b: in the case of a subsequent Order in Council under subsection (1)(a)
3: An Order in Council made under this section must be made no later than 1 December in each year and must apply from 1 April following that date.
4: The Minister responsible for the Inland Revenue Department, in consultation with the Minister responsible for the department currently responsible for administering the Social Security Act 1964
5: A review undertaken under subsection (4)
a: in the case of the first review, not later than 30 June 2008; and
b: in the case of subsequent reviews, not later than 30 June in the third year after each preceding review.
2: Subsection (1)
19: Definitions
1: This section amends section OB 1
2: In the definition of family plus
a: the amount for an eligible period, after abatement (if any) under section KD 2(6)
i: the in-work payment calculated under section KD 2AAA
ii: the child tax credit calculated under section KD 2(4) .
3: After the definition of investor in-work payment subpart KD section KD 2AAA .
4: In the definition of subpart KD credit and calculated
5: Subsections (1) to (4)
20: Schedule 12 section KD 5(6)
1: Schedule 12 Schedule
2: Subsection (1) Amendment to
Income Tax Act 2004
21: Calculation of subpart KD credit
1: Section KD 2(3)
3: The amount of the family support credit for an eligible period is given by the following formula: where amount
a: for the eldest dependent child for whom the person is a principal caregiver during the period, 1 of the following:
i: $4,264, or such greater amount as may be prescribed by the Governor-General by Order in Council under section KD 5C
ii: $4,940, or such greater amount as may be prescribed by the Governor-General by Order in Council under section KD 5C
iii: a weighted average of the amounts in subparagraphs (i) and (ii)
b: for each dependent child for whom the person is a principal caregiver during the period, other than the eldest dependent child, 1 of the following:
i: $2,964, or such greater amount as may be prescribed by the Governor-General by Order in Council under section KD 5C
ii: $3,380, or such greater amount as may be prescribed by the Governor-General by Order in Council under section KD 5C
iii: $4,420, or such greater amount as may be prescribed by the Governor-General by Order in Council under section KD 5C
iv: a weighted average of the amounts in subparagraphs (i) and (ii)
v: a weighted average of the amounts in subparagraphs (ii) and (iii) days
2: Subsection (1) Amendment to
Child Support Act 1991
22: Meaning of term living allowance
1: Section 30(4)
4: A liable parent who has one or more dependent children is entitled to a living allowance for the child support year of an amount equal to the aggregate of—
a: an amount equal to the gross married rate of invalid's benefit in force on 1 January in the immediately preceding child support year; and
b: in relation to not more than the eldest 4 such children, the sum of the amounts provided in subsection (4A) subsection (4B)
4A: For the child support year commencing on 1 April 2005, the living allowance allowed under subsection (4)
4B: The living allowance for the child support years commencing on and after 1 April 2006 is $2,444, inflated by the inflation percentage (as defined in section 29(1)
2: In section 30(5) gross married rate of unemployment benefit (1)(h) (1)(e)
3: Subsections (1) (2) Amendment to
Housing Restructuring Act 1992
23: Schedule 2
1: In clause 10(a)(ii) or child tax credit , child tax credit, or in-work payment
2: Subsection (1) Amendments to
Privacy Act 1993
24: Notice of adverse action proposed
1: In section 103(1) paragraph (a) subsections (1A) and (2) subsections (1A), (1B), and (2)
2: After section 103(1A)
1B: Nothing in subsection (1) KD of the Income Tax Act 2004 section 85G of the Tax Administration Act 1994
a: provides details of the discrepancy and the suspension of payment of the credit of tax and any other adverse action which the Commissioner proposes to take; and
b: states that the individual has 5 working days from the receipt of the notice to show cause why payment of the credit of tax ought not to have been suspended or why the adverse action should not be taken, or both— and the other adverse action must not be taken until expiration of those 5 working days.
3: In section 103(2) or subsection (1B) subsection (1A)
4: In section 103(3) paragraph (a) or subsection (1B) subsection (1A)
5: Subsections (1) to (4)
25: Schedule 3
1: In Schedule 3 Privacy Act 1993 Tax Administration Act 1994 and 85E , 85E and 85G
2: Subsection (1) Amendments to
Tax Administration Act 1994
26: Disclosure of information for family support double payment identification
1: In the definition of qualifying person section 84(6) section KD 3(3) section KD 2AAA or KD 3
2: Subsection (1)
27: New
section 85G
1: After section 85F
85G: Disclosure of information in relation to family income assistance
1: The purpose of this section is to facilitate the exchange of information between the Inland Revenue Department and the department currently responsible for administering the Social Security Act 1964
a: commence paying family support credit payments to a qualifying person who has ceased to be entitled to a specified benefit, or as the case may be, ceased to be entitled to be paid a subpart KD credit under section KD 6(1) of the Income Tax Act 2004
b: contact a person in order to invite the person to—
i: apply for a credit of tax under section KD 2 or sections KD 2 and KD 3 of that Act
ii: provide additional information so that the Commissioner may calculate the credit of tax:
c: withdraw or replace a certificate of entitlement under section KD 5(10) of that Act
2: For the purpose of subsection (1) Social Security Act 1964
3: If information is supplied under subsection (2)
4: The Commissioner may take action under subpart KD of the Income Tax Act 2004 subsection (3)
a: the qualifying person will be in receipt of a subpart KD credit from both of the Commissioner and the chief executive of the department currently responsible for administering the Social Security Act 1964
b: the Commissioner may be required to commence paying a subpart KD credit to a qualifying person.
5: The provisions of this section apply notwithstanding any other provisions of this Act.
6: In this section, unless the context otherwise requires,— authorised officer Social Security Act 1964 beneficiary beneficiary information Gazette subsection (1) qualifying person paragraph (a) section OB 1 of the Income Tax Act 2004 section KD 2AAA or KD 3 specified benefit section OB 1 of the Income Tax Act 2004 subpart KD credit section OB 1 of the Income Tax Act 2004
2: Subsection (1)