How does Working for Families work, and how much could I get?

Working for Families is a set of tax credits paid by Inland Revenue (IR) to families with dependent children. The full amounts are paid to families on lower incomes. Once family income goes above $44,900 a year, the payments start to shrink at 27.5 cents for every extra dollar.

The payments are based on a guess about your income for the year. At the end of the year IR checks the guess against what really happened. If you earned more than you said, you may have to pay money back. That year-end square-up is where most families get caught out.

The basics

• Who qualifies: You must be the principal caregiver of a dependent child aged 18 or under, and meet the residency rules. You do not have to be the child's parent. You must be 16 or older. Some shared care arrangements can still qualify.
• Family income: This combines your income and your partner's. Your children's income is generally left out. It can include more than taxable pay, so check IR's page if you have other income.
• Family tax credit: The full amount is $7,921 a year ($152 a week) for the eldest child and $6,454 a year ($124 a week) for each other child. These are the rates from 1 April 2026.
• In-work tax credit: From 1 April 2026 the maximum is $147 a week ($7,670 a year), up $50 from $97. It covers 1 to 3 children, plus $780 a year for each child after the third. You must earn income from paid work. Interest, dividends or rent alone do not count. There is no minimum hours rule now.
• Best Start: $77 a week ($4,041 a year) for the first three years of a child's life. It is paid from birth to the child's third birthday. For babies born on or after 1 April 2026 it is income-tested from year one. It starts to reduce above $79,000 of family income, at 21 cents per dollar. For babies born before that date, year one is $73 a week and not income-tested.
• Abatement: Family tax credit and in-work tax credit reduce by 27.5 cents for each dollar of family income over $44,900. It was 27 cents on a $42,700 threshold before 1 April 2026.
• Minimum family tax credit: A separate top-up for people on salary or wages with very low after-tax income, under $36,604 a year. It has hours rules. See IR's page for details.
• One payment: The credits are combined into one payment, weekly or fortnightly, or as a lump sum after the year ends.

How it is worked out

Example: Aroha and Wiremu have two children, aged 6 and 9, and a family income of $70,000.

• Full family tax credit: $7,921 + $6,454 = $14,375 a year.
• Income over the threshold: $70,000 - $44,900 = $25,100.
• Abatement: $25,100 x 27.5% = $6,902.50.
• Family tax credit left: $14,375 - $6,902.50 = $7,472.50 a year. IR divides by 52 and rounds down, so about $143 a week.
• In-work tax credit: The abatement was smaller than the family tax credit, so the in-work tax credit is not cut. They get the full $7,670, or $147 a week.
• Total: About $15,142 a year, or roughly $290 a week.

Now the square-up. Say Aroha picked up overtime and the family really earned $80,000, but IR was told $70,000.

• Real abatement: $35,100 x 27.5% = $9,652.50.
• Real family tax credit: $14,375 - $9,652.50 = $4,722.50.
• Overpaid: $7,472.50 - $4,722.50 = $2,750. That is a bill, unless they have already updated their estimate.

The catch

• The $147 is temporary. The increase runs until 31 March 2027. It stops earlier if 91 petrol falls below $3 a litre for four weeks in a row. The maximum then goes back to $97 a week ($5,070 a year). Check the current position at IR's news page.
• Abatement can wipe out the family tax credit. If the abatement is bigger than the family tax credit, you get none. The extra abatement then reduces your in-work tax credit. Two children and $100,000 of income is IR's example of this.
• Underpayments are refunded, overpayments are billed. At 31 March IR works out your real entitlement. If you were overpaid, you must repay by the due date IR gives you. Check your notice for the date and your options.
• Your estimate is the risk. A bill can come if your estimate was too low, your family situation changed and you did not tell IR, or your tax was reassessed.
• Lump sum is the safe option. You can take the whole year's payment after the year ends. It uses your actual income, so there is no estimate to get wrong. The cost is waiting. If it was based on wrong information, you may still owe later.
• Best Start and paid parental leave do not mix. You cannot get both at once. Best Start starts when paid parental leave stops.
• Best Start is now income-tested earlier. Families with a baby born from 1 April 2026 and income above $79,000 will see a reduced amount even in year one.
• Rates are reset each 1 April. Best Start abatement is recalculated each year from expected income.

Do this next

1. Check you qualify on IR's "Can you get Working for Families?" page.
2. Apply through myIR, the online service, and register for Working for Families. If you are already registered and have a new baby, use "Update a child's details" so Best Start is added.
3. Work out an honest income estimate for the 1 April to 31 March year. Include your partner's income and any other income IR counts. Err high if your work is variable.
4. Choose how to be paid: weekly, fortnightly or lump sum at year end. If you are on the higher-income side, think hard about the lump sum.
5. Tell IR straight away about changes: new job, pay rise, overtime, a partner moving in or out, or a change in who cares for the children. Update your estimate in myIR.
6. Open your notice of entitlement when it arrives and check the children, income and dates.
7. If you get a bill you cannot pay, contact IR early and ask about repayment options.

Common questions

Do I need to apply every year?

You do not need to reapply if you stay eligible. IR estimates your entitlement before each tax year starts and sends a notice. Check it is right and update your details if not.

Can self-employed people get it?

Yes. Self-employed income counts as income from paid work for the in-work tax credit, even if the business made a loss. The minimum family tax credit has stricter rules for self-employed income.

Is Best Start for every baby?

You must be registered for Working for Families. Any type of income counts toward the $79,000 threshold, including benefits and NZ Superannuation.

Will the in-work tax credit go up automatically?

Yes. Existing recipients got the increase automatically. If you need a different payment option, you can change it in myIR.

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Last reviewed 14 October 2026. Written by Streetwise from the official pages listed above. General information only, not legal or financial advice.