New Zealand Acts

TAXATION (WORKING FOR FAMILIES) ACT 2004 - SECT 14

14 New sections KD 2AAA and KD 2AAAB inserted

1 After section KD 2 , the following is inserted:

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 or a child for whom a benefit is paid under section 28 or 29 of the Social Security Act 1964 ; and

c) either the principal caregiver satisfies the residence requirements of subsection (3) or the child satisfies the residence requirements of subsection (4) ; and

d) either or both of the principal caregiver and the principal caregiver's spouse is a person to whom subsection (7) refers, or—

i) has, from an activity, income that satisfies the requirements of subsection (5) for 1 or more periods of a week in the eligible period, subject to subsection (6) or (7) or paragraphs (c), (d), (e), (f), or (g) of the definition full-time earner; and

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) were treated as satisfying the requirements of paragraph (d) of the definition of employment; and

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) of the definition of salary or wages, or a parent's allowance under 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:

3 A principal caregiver satisfies subsection (1)(c) if—

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 , the principal caregiver is a tax resident and resident in New Zealand.

4 A child satisfies subsection (1)(c) if the child is both resident and present in New Zealand for the eligible period.

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) of the definition of 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) applies:

c) income from a business carried on for profit.

6 A person who satisfies the requirements of subsection (1)(d)(ii) but who in a 1 week period is not engaged in an activity related to their employment and who is on leave from that employment because of the birth of a child and who is eligible to receive the parental tax credit in respect of the child is treated for the purpose of subsection (1)(d)(ii) , and for the period for which the parental tax credit is paid to the person, as being engaged in the week in the activity for the number of hours in respect of which the Commissioner is satisfied that the person would have been engaged but for the birth of the child.

7 A person who satisfies the requirements of subsection (1)(d)(ii) but who in a 1 week period is engaged in employment for less than the number of hours required to satisfy subsection (1)(d)(ii) because of the birth of a child and who is eligible to receive the parental tax credit in respect of the child is treated for the purpose of subsection (1)(d)(ii) , and for the period for which the parental tax credit is paid to the person, as being engaged in the week in the activity for the number of hours in respect of which the Commissioner is satisfied that the person would have been engaged but for the birth of the child.

8 A person is treated as satisfying subsection (1)(d) if—

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 ; and

c) weekly compensation within the meaning of section 6 of the Injury Prevention, Rehabilitation, and Compensation Act 2001 , is being paid in respect of the incapacity or will be paid in respect of the incapacity; and

d) the person or their spouse would have satisfied the requirements of subsection (1)(d)(i) and (ii) and been eligible for the credit of tax calculated under this section at the time of the incapacity if this section had come into force before the date of the incapacity.

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) for an eligible period if—

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 ; and

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) applies in respect of the 2006-07 and subsequent income years.