Working for Families Tax Credits Guide 2026-27 (Post-Budget 2026)

Working for Families (WfF) is New Zealand’s main in-work financial support package for families with dependent children. The 2026-27 year brings the biggest single change in years — a temporary $50/week boost to the In-Work Tax Credit, announced 24 March 2026 and enacted 30 March 2026 (eight weeks before Budget 2026 on 28 May) — on top of the CPI-driven uplift to Family Tax Credit and Best Start already locked in by earlier legislation. This guide walks through the four credits with the new 2026-27 numbers and notes which settings were unchanged.

What’s new for 2026-27 (from 1 April 2026): IWTC boosted from $97.50 to $147.50/week (TEMPORARY, 2026-27 only). FTC eldest $144.69 → $152.33/week; FTC subsequent $117.88 → $124.12/week. Best Start $73.81 → $77.71/week. Abatement threshold $42,700 → $44,900 and rate 27% → 27.5% (Taxation (Budget Measures) Act 2025). Best Start year 1 now income-tested at $79,000 / 21% for babies born on or after 1 April 2026. MFTC threshold $35,316 → $36,604 net/year ($679 → $703/week net), uplifted via Income Tax (Tax Credit) Order 2025 — not a Budget 2026 line item but effective 1 April 2026.

What Is Working for Families?

Working for Families is a package of tax credits administered by IRD. Unlike a benefit, it’s described as a “tax credit” because it’s calculated against your income tax liability and paid in addition to your wages. If your credit exceeds your tax liability, you receive the excess as a direct payment.

WfF consists of four separate credits:

1. Family Tax Credit (FTC)
2. In-Work Tax Credit (IWTC) — temporarily boosted by $50/week for 2026-27 only
3. Minimum Family Tax Credit (MFTC)
4. Best Start Tax Credit (BSTC)

Each has its own eligibility rules and abatement rules, but FTC and IWTC share the same abatement threshold and rate.

Who Can Get Working for Families?

Beyond each credit’s specific work-hour and income-testing rules, every applicant must:

• Be the principal caregiver of a dependent child: aged 15 or under, aged 16 or 17 and not financially independent, or aged 18, not financially independent and still at school or a tertiary institution (a teenager in full-time work or receiving a benefit or student allowance is financially independent and does not count)
• Be a New Zealand tax resident
• Have family income under the relevant abatement threshold for the credits being claimed
• Not be receiving a student allowance at the same time as IWTC

Both employees and self-employed people can receive WfF — it isn’t limited to wage and salary earners.

1. Family Tax Credit (FTC)

The Family Tax Credit is the core WfF payment. It’s based on the number of dependent children in your family, each aged 15 or under, aged 16 or 17 and not financially independent, or aged 18, not financially independent and still at school or a tertiary institution.

Annual FTC rates from 1 April 2026 (2026-27 year):

For reference, the 2025-26 rates were $144.69/week (eldest) / $117.88/week (subsequent). The 2026-27 uplift is CPI-driven and was scheduled before Budget 2026.

Who can get it: families with dependent children who are the primary carer. There is no minimum work requirement for FTC.

Income abatement (2026-27): FTC begins abating once family income exceeds $44,900 per year (up from $42,700 in 2025-26). The abatement rate is 27.5 cents per dollar of income above this threshold (up from 27c). For every $1,000 over $44,900, FTC reduces by $275.

Example — 2 children, family income $60,000:

• Full FTC = $7,921 + $6,454 = $14,375 per year
• Income over threshold = $60,000 − $44,900 = $15,100
• Abatement = $15,100 × 27.5% = $4,153
• Reduced FTC = $14,375 − $4,153 = $10,222 per year (approx. $196/week)

2. In-Work Tax Credit (IWTC) — Temporary $50/Week Boost for 2026-27

The In-Work Tax Credit is an additional payment for families where the adults are in paid employment.

There is no minimum-hours test. The old 20-hours (single parent) / 30-hours (couple, combined) thresholds were repealed on 1 July 2020, when s 19 of the COVID-19 Response (Taxation and Social Assistance Urgent Measures) Act 2020 replaced “full-time earner” with “earner” throughout Income Tax Act 2007 s MD 9. Being in paid work and off a main benefit is enough.

IWTC rates from 1 April 2026 (TEMPORARY boost):

• $147.50 per week for families with 1–3 children (was $97.50 in 2025-26)
• Additional $15 per week for each child beyond three (unchanged)

The base annual amount jumps from $5,070 to $7,670 — an extra $2,600 per year for the typical eligible family.

The boost is temporary — it runs to 31 March 2027, and IRD says it may reduce back earlier if 91-octane petrol drops below $3 a litre for four weeks. From 1 April 2027 the rate reverts to $97.50/week unless Parliament renews the legislation.

Who benefits: IRD modelling expects around 143,000 families to receive the full $50/week boost, and a further 14,000 families to become newly eligible at abated amounts (the higher base pushes the upper income limit further out).

Income abatement: IWTC abates at the same rate and threshold as FTC — 27.5 cents per dollar above $44,900 for 2026-27.

IWTC cannot be received at the same time as most main benefits (Jobseeker Support, Sole Parent Support, etc.) or student allowances — it’s specifically for families in paid work.

Example — 2 children, family income $80,000, both parents in paid work:

• Full FTC = $14,375 + full IWTC = $7,670 = $22,045 base
• Income over threshold = $80,000 − $44,900 = $35,100
• Abatement = $35,100 × 27.5% = $9,652
• Reduced WfF (FTC + IWTC) = $22,045 − $9,652 = $12,393/year (~$238/week)

3. Minimum Family Tax Credit (MFTC)

The Minimum Family Tax Credit is a top-up for working families with very low incomes. It guarantees a minimum annual after-tax income level.

For 2026-27, MFTC ensures that working families receive at least $36,604 per year after tax (approximately $703/week). This is a $1,288/year uplift from 2025-26’s $35,316 floor, effective 1 April 2026 via the Income Tax (Tax Credit) Order 2025. The increase wasn’t a Budget 2026 line item — it was already locked in by the prior order.

Eligibility:

• Single parent working at least 20 hours per week, or a couple working at least 30 hours combined
• Income must be from paid employment (not benefits or student allowances)

MFTC is targeted at families working but earning very low wages — for example, part-time workers on the minimum wage. Families on moderate incomes are above the MFTC floor, so it does not apply to them.

4. Best Start Tax Credit (BSTC)

Best Start is a payment for families with newborn or very young children, intended to help with the first few years of a child’s life.

Rate from 1 April 2026: $4,041 per year ($77.71/week) per eligible child — up from $3,838 ($73.81/week) in 2025-26.

Eligibility phases:

• Year 1 (birth to 1 year): From 1 April 2026, income-tested at $79,000 / 21% for babies born on or after 1 April 2026. Previously universal in year 1.
• Year 2 (age 1–2): Income-tested at $79,000 / 21%. Best Start is not paid while paid parental leave is being paid; it starts after PPL ends.
• Year 3 (age 2–3): Income-tested at $79,000 / 21%.

The Best Start year-1 income-testing change was legislated by the Taxation (Budget Measures) Act 2025 (s 8, which amends Income Tax Act 2007 s MG 3 for children born on or after 1 April 2026).

Note on transition: babies born before 1 April 2026 keep the universal year-1 entitlement until they turn 1. Babies born on or after 1 April 2026 are income-tested from day 1.

Full phase-out at the $79,000 / 21% rate occurs at approximately $98,242 family income.

Combined Example — Working Family with the IWTC Boost

Family: couple, 2 children under 16, combined income $65,000, both in paid work

Compare to the 2025-26 equivalent (same family, same income):

Net gain for this family in 2026-27: $3,814/year — almost entirely from the temporary IWTC boost.

How to Register and Receive Working for Families

To start receiving WfF:

1. Register with IRD through myIR (my.ird.govt.nz)
2. Complete the Working for Families registration, providing your estimated family income and your children’s details
3. Choose how you want to be paid (see below)

You can receive WfF in two ways:

Weekly or fortnightly payments throughout the year: IRD estimates your annual family income and pays you weekly or fortnightly. At year end, the actual income is reconciled — overpayments must be repaid; underpayments are topped up at the year-end square-up.

Lump sum at the end of the year: You receive nothing during the year but claim the full amount as a tax credit when filing your income tax return. This avoids the risk of overpayments but means you don’t get the cash flow benefit during the year.

Most families choose weekly/fortnightly payments. If your income fluctuates significantly, update your income estimate with IRD to avoid a large year-end repayment.

Shared Care

If children split time between two households, WfF is split between the primary carers. Shared care is counted in days, not nights: you need the child in your care for at least 122 days a year (5 days a fortnight, or a third of a 4-month period) to qualify, and payments are reduced in proportion to the days you are not the principal caregiver.

Summary

• FTC — $152.33/wk eldest, $124.12/wk subsequent (from 1 April 2026, CPI uplift)
• IWTC — temporarily boosted to $147.50/wk (was $97.50) for 2026-27 only; expires 1 April 2027 unless renewed
• MFTC — $703/wk net floor ($36,604/yr after tax), up from $679/wk in 2025-26 via Income Tax (Tax Credit) Order 2025
• Best Start — $77.71/wk (CPI uplift); year-1 now income-tested at $79k / 21% for babies born ≥ 1 April 2026
• Abatement — 27.5c per $ above $44,900 for FTC and IWTC; 21c per $ above $79,000 for Best Start

The temporary IWTC boost — announced 24 March 2026, eight weeks before Budget 2026 — is the headline gain for working families this year, about $2,600/year extra for eligible families with 1–3 children. Run your numbers through the Working for Families calculator with the 2026-27 toggle, see the at-a-glance Working for Families rates 2026-27 table, and read the NZ Budget 2026 summary for the wider context.