Working for Families Rates for 2025-26: Credits, Thresholds, and Abatement

Working for Families (WFF) is a package of tax credits available to New Zealand families with dependent children. For 2025-26, the credits provide meaningful income support to low and middle-income families — but the amounts depend on how many children you have, your family income, and whether you are in paid work (Best Start also depends on a child’s age, up to 3 years). This article sets out the current rates, how abatement works, and how to ensure you receive what you are entitled to.

The Four Working for Families Tax Credits

Working for Families consists of four separate credits:

1. Family Tax Credit (FTC) — the main component, paid per child
2. In-Work Tax Credit (IWTC) — for families in paid employment
3. Minimum Family Tax Credit (MFTC) — tops up income for low-earning working families
4. Best Start — for families with newborns in the first three years

Family Tax Credit (FTC)

The Family Tax Credit is the core Working for Families payment. It is paid for every dependent child in your family. FTC no longer varies by a child’s specific age — it’s a flat rate for your eldest (or only) child and a second, lower flat rate for every subsequent child, regardless of their ages.

2025-26 weekly rates:

Annual equivalents (× 52 weeks):

Verified against Inland Revenue’s Working for Families weekly payments — 1 April 2025 to 31 March 2026 (IR271) and the IRD Family Tax Credit page.

Example — two children:

• Eldest child: $7,524.40
• Second child: $6,130.80
• Total FTC: $13,655.20 per year (before abatement)

In-Work Tax Credit (IWTC)

The In-Work Tax Credit is an additional payment for families where the parents (or sole parent) are in paid employment. To qualify:

• You must work minimum hours: 20 hours per week for single parents, or 30 hours per week combined for couples
• You must not be receiving an income-tested benefit (e.g., Jobseeker Support or Sole Parent Support)

2025-26 IWTC rates:

A family with 4 children receives $97.50 + $15.00 = $112.50 per week ($5,850 per year).

Minimum Family Tax Credit (MFTC)

The MFTC tops up the income of low-earning families in paid work to a minimum threshold. It fills the gap between your actual income and the minimum income guarantee:

2025-26 MFTC threshold: $35,316 per year after tax (equivalent to $41,483 before tax) — the minimum net income guaranteed to working families with children.

If a sole parent or couple (combined) earns less than $35,316 after tax while working the required minimum hours, the MFTC tops them up to $35,316 (around $679/week net).

This credit ensures no working family with children falls below the threshold purely due to low wages. It is less commonly needed now the minimum wage has risen, but it remains the backstop.

Best Start Tax Credit

Best Start provides support for families in the early years after a child is born.

From year 2, Best Start abates at 21 cents per dollar of family income over $79,000. The credit ceases when the child turns 3 (or when family income is too high in years 2 and 3).

Income Threshold and Abatement

Working for Families credits (FTC and IWTC) abate as family income rises above a single threshold. An older two-threshold abatement structure was replaced by today’s single-threshold system in an earlier WFF reform, so there is no separate “second abatement” stage for 2025-26.

Abatement

• Threshold: Family income above $42,700 per year
• Rate: 27 cents per dollar of income above $42,700
• Abatement reduces FTC first; if the abatement amount exceeds your FTC entitlement, the remainder reduces your IWTC

Example abatement calculation for a family with 2 children (FTC only = $13,655.20 per year)

The income at which WFF is fully abated varies by family size — larger families retain entitlement at higher income levels.

Upper Income Cutoff

Based on the 2025-26 FTC rates and the $42,700 / 27% abatement, families relying on FTC alone generally stop receiving Working for Families once their income reaches approximately:

These are estimates based on FTC alone. The IWTC (an extra $97.50/week base for working families) adds to the total credits payable, raising the cutoff further for families in paid work.

How to Receive Working for Families

You can receive Working for Families in two ways:

1. Weekly or Fortnightly Payments (Payments During the Year)

Apply through IRD’s Working for Families service in myIR. Payments are made weekly or fortnightly based on your estimated annual family income. You update your estimate if circumstances change (new child, income change, partner starts work).

At the end of the tax year, IRD squares up your actual entitlement against what you were paid. If you received too much, you will have a debt to repay. If you received too little, you will receive a refund.

2. End-of-Year Lump Sum

Alternatively, you can receive nothing during the year and claim the full entitlement at year end by filing an IR3 return. This avoids any risk of having to repay an overpayment, but means waiting until after 31 March 2026 and filing your return.

What Counts as Family Income?

WFF is calculated on family income — the combined annual income of both parents or the sole parent. Income includes:

• Wages, salary, and PAYE income
• Self-employment income (net of deductions)
• Rental income
• Interest and dividends
• Certain government payments

It excludes some tax-exempt income and certain benefit payments.

Changes Affecting 2025-26

For the 2025-26 year (1 April 2025 – 31 March 2026):

• FTC and IWTC rates are unchanged from 2024-25: the eldest-child FTC stays at $7,524/year ($144.69/week) and the IWTC base at $97.50/week. The next FTC increase is the CPI uplift from 1 April 2026.
• The $42,700 abatement threshold and 27% abatement rate apply for 2025-26
• Best Start’s $79,000 / 21% income test for years 2 and 3 is unchanged

These 2025-26 rates increase again from 1 April 2026 — see our 2026-27 Working for Families rates for what changes.

Key Contacts and Resources

• Apply or update: myIR at ird.govt.nz/myir
• Estimate your entitlement: IRD’s WFF estimator tool
• Changes in circumstances: Report changes promptly to avoid an overpayment debt

Working for Families can make a significant difference to a family’s weekly income — for a couple with two children earning $55,000 combined, WFF credits could add $200 or more per week. If you have dependent children and have not checked your eligibility, it is worth doing so before the end of the 2025-26 tax year.