Working for Families 2026
Updated for 2026/27 IRD rates and thresholds
The 2026/27 numbers
| Payment | Weekly | Annual | Income test |
|---|---|---|---|
| Family tax credit — eldest child | $152.33 | $7,921 | Abates over $44,900 |
| Family tax credit — each subsequent child | $124.12 | $6,454 | Abates over $44,900 |
| In-work tax credit | $147 (1–3 children) | $7,670 | Hours test; not on a main benefit |
| In-work tax credit — 4th and 5th child | +$15 each | +$780 each | Same as above |
| Best Start | $77 | $4,041 | Abates over $79,000 |
| Minimum family tax credit | Tops up to $703 net | $36,604 | Working families with children |
What changed on 1 April 2026
- Abatement threshold: up from $42,700 to $44,900 — the first $2,200 of extra income above the old threshold is now free of abatement.
- Abatement rate: up from 27% to 27.5%. For a family $30,000 above the threshold, that is an extra $150 a year of abatement — the threshold rise more than offsets it at middle incomes.
- In-work tax credit: temporarily increased to $147 a week from 1 April 2026 (from a $97 baseline), scheduled to revert after 31 March 2027 unless petrol prices trigger an earlier reset.
- Best Start: now $77 a week ($4,041 a year) for all eligible children under 3, income-tested from the first year for babies born on or after 1 April 2026.
- Family tax credit and minimum family tax credit: increased through the Annual General Adjustment.
Abatement worked out properly
Only the family tax credit and Best Start abate. The in-work tax credit and minimum family tax credit do not — which is why the order of the calculation matters:
- Add the abatable credits: FTC for each child, plus Best Start if applicable.
- Work out the abatement: (family income − $44,900) × 27.5%.
- Subtract the abatement from the abatable credits, down to nil but not below.
- Add the non-abated credits: in-work tax credit and minimum family tax credit if you qualify.
Example — a couple with two children, family income $70,000, both working 30 hours between them: FTC is $7,921 + $6,454 = $14,375. Abatement is ($70,000 − $44,900) × 27.5% = $6,902.50, leaving $7,472.50 of FTC. Add the IWTC of $7,670 for a total of $15,142.50 for the year, about $291 a week.
Eligibility basics
- Dependent children under 18 in your care, who are not receiving a benefit or student allowance in their own right.
- Income tested on family income — your income plus your partner's, before tax, for the whole year.
- In-work tax credit needs hours: 20 hours a week for a single parent, 30 hours combined for a couple.
- Main benefit: you cannot receive the in-work tax credit while on a main benefit; the family tax credit and Best Start are still available.
- Residency: you must be a New Zealand resident for tax purposes and normally live in New Zealand.
Apply and keep it accurate
- Register for Working for Families in myIR (or ring IRD on 0800 227 773). Registration carries on year to year.
- Enter an income estimate for the year. IRD pays weekly or fortnightly based on it, or you can take it as a lump sum after the year ends.
- Update the estimate whenever your hours, pay rate or family situation change. Underestimating means an overpayment becomes a debt; overestimating means a delay in money you could have had.
- Tell IRD about a new baby, a change of partner, a move overseas, or a child leaving care — each of these changes the entitlement.
- At year end, IRD reconciles the estimate against actual income and issues a top-up or an invoice.
Deep dive — 2026 update
Weekly payments vs a lump sum
You can take Working for Families as regular payments through the year or as a single payment after the tax year ends. The choice matters more than it looks:
| Option | Cash flow | Risk |
|---|---|---|
| Weekly or fortnightly | Money when you need it | If income is underestimated you can end up owing IRD |
| Lump sum at year end | Nothing until after 31 March and assessment | No repayment risk; you may wait until May or June |
| Mixed | Part payment through the year, balance at the end | Balances cash flow against repayment exposure |
Families with variable income — commission, seasonal work, contracting — often choose a conservative weekly amount based on a deliberately low estimate and take the balance as a lump sum. It is the safest combination, and it removes the most common cause of a Working for Families debt.
How Working for Families interacts with other support
- Best Start and paid parental leave: you cannot receive both at the same time. Best Start starts after paid parental leave ends, and the year-one entitlement for babies born before 1 April 2026 is not income-tested.
- Childcare Subsidy and OSCAR: separate MSD payments, income-tested on their own scales — up to $6.72 an hour for a low-income family with one child.
- Accommodation Supplement: not affected by Working for Families, but the family tax credit counts as income when MSD assesses the supplement.
- Minimum family tax credit: available only to families not on a main benefit, and it tops up after-tax family income to the guaranteed minimum of $36,604 a year ($703 a week).
- Student allowance: you cannot receive Working for Families for a child who is getting a student allowance in their own right.
Five mistakes that create a debt
- Leaving the income estimate at last year's figure after a pay rise or a new job.
- Forgetting a partner's income — Working for Families is assessed on combined family income, and a change of circumstances must be reported.
- Not telling IRD a child has left care or turned 18.
- Assuming a benefit makes you ineligible — the family tax credit continues while you are on a main benefit; only the in-work tax credit stops.
- Missing the year-end reconciliation — check myIR in May for the assessment and any top-up you are owed.