Mother’s Day is a time to celebrate and appreciate the mothers or maternal figures within our lives. You may be spoiled with gifts from your children or perhaps treated to a lovely meal or spa Day.
There is also a good chance your pay packet grew a little from 1 April this year, but only if you are registered for Working for Families. The government’s temporary $50-per-week boost to the in-work tax credit (IWTC) is now live, and if you qualify for the full amount, that could put up to $2,600 back into your family’s budget over the next 12 months. That is $50 extra each week, on top of the standard rate.
What has changed with the In-Work Tax Credit from 1 April 2026
You have probably been feeling your wallet tightening, the recent fuel crisis, pushing the cost of 91 octane petrol above $4.00 per litre in parts of New Zealand, and the rising cost of living has affected most Kiwis. In response, the Government announced a temporary increase to the IWTC, administered by Inland Revenue (IRD). The IWTC is received by approximately 143,000 families with dependent children and at least one parent is in paid employment and neither parent receives a main benefit from work and income.
This increase will apply from 1 April 2026 to 31 March 2027 or until the price of 91 petrol drops below $3 a litre for four consecutive weeks. The IWTC will be increased by $50 a week, from $97 to $147, for those who are receiving the full amount. You will receive the full IWTC if your family income is $44,900 or less. Above that threshold, the amount gradually reduces.
For the full entitlement, this equates to an annual increase from $5,070 to $7,670. If you currently receive your payment as a lump sum at the end of the year, you will still receive the increased entitlement. You can also switch to weekly or fortnightly payments through myIR, but check with your accountant first.
If petrol prices fall below $3 per litre for four consecutive weeks before 31 March 2027, the IWTC will return to its standard rate. You will not need to repay any increased payments you received before the change.
Who is eligible for the In-Work Tax Credit in New Zealand?
To be eligible for the IWTC there are a few criteria you must meet.
- Be the primary carer for at least one child under 18 who is financially dependent on you.
- Be aged 16 or over.
- Be a New Zealand tax resident living in New Zealand, or the children in your care must be.
- Be earning income from paid work, including self-employment.
If you are self-employed and made a loss after deducting expenses, you still qualify for the IWTC. If you are a part-time employee returning from parental leave, you will qualify provided you are earning income from paid work and are not receiving a main benefit.
Best Start payment changes 2026: what new parents need to know
If you are a new mum to a baby born on or after 1 April 2026, the Best Start payment is available to provide extra support to your family over the first 3 years of your child’s life. As of 1 April 2026, there are a few changes being made to this payment as well.
For children born on or after the 1 April 2026, the weekly payment of $77 will be reduced when the family income exceeds $79,000, compared to before where the payments wouldn’t be income tested until the second year.
For example, if your family earns $88,000, your Best Start payment will be reduced from the full $77 per week. Previously, you would have received the full amount for your baby’s entire first year regardless of income. This change is worth factoring into your parental leave budget.
If you are receiving paid parental leave, these payments will begin after the paid parental leave finishes.
How to avoid Working for Families overpayments
When receiving the IWTC payment, you can choose whether you would like to receive it weekly, fortnightly or as a lump sum that will be paid after the end of the tax year. Choosing which option is best for you and your family can come down to a few considerations, especially to avoid the risk of overpayment. If you have any concerns, please check with your accountant.
Choosing weekly or fortnightly Working for Families payments
If your income is consistent or you have no expectation of anything changing (such as changing jobs, having another child, extra income or a child moving out) we recommend weekly or fortnightly payments if you can confidently estimate your income for the year.
Receiving your In-Work Tax Credit as a lump sum
If you have seasonal work, are self-employed, are expecting changes in your circumstances (such as the above situations) and aren’t able to confidently estimate your income a lump sum payment could work better for you.
What happens if you over- or underestimate your family income?
If you earn less than you estimated, you may receive a top-up payment. This will be paid as a lump sum after your end-of-year tax assessment.
If you earn more than you estimated and were paid weekly or fortnightly, you may have been overpaid. After your end-of-year tax assessment, you will need to repay the difference. Contact IRD as soon as you realise your income has changed. They can help you set up a payment plan. Be aware that penalties and interest may apply to any late repayments.
If you do have unexpected or unplanned changes to your family or income circumstances throughout the year, after submitting for the payment, you are able to adjust your information anytime throughout the year. Contact IRD as soon as possible to update your details and avoid being overpaid.
What Employers and Payroll Managers Should Know
The IWTC is administered directly by IRD, not through your payroll system. You do not need to adjust employee pay to reflect this increase. However, if employees ask about the boost, you can direct them to check their Working for Families registration through myIR. If you employ parents who may be eligible, consider sharing this information with your team.
Your Working for Families checklist this Mother’s Day
This Mother’s Day, outside of the celebrations and well-deserved spoiling, we encourage you to complete these three easy steps.
- Log onto myIR and check your registration for the Working for Families payments.
- Check your family and income circumstances to ensure accuracy.
- Check your payment frequency, and adjust if needed.
If you are not yet registered for Working for Families, visit the IRD website to check your eligibility and register. Around 14,000 additional families are now eligible for the first time due to the increased rate.
Get help with your Working for Families entitlement
While you are enjoying a well-deserved Mother’s Day, it is also a good time to check that your family’s finances are set up to make the most of these changes. Moore Markhams is here to help.
If you are unsure how these changes affect your family’s tax position, or if you need help estimating your entitlement and choosing the right payment frequency, your local Moore Markhams adviser can walk you through it. Get in touch today.
