{"id":299377,"date":"2026-02-24T07:14:09","date_gmt":"2026-02-24T07:14:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/299377\/"},"modified":"2026-02-24T07:14:09","modified_gmt":"2026-02-24T07:14:09","slug":"imaginary-income-lands-family-4000-working-for-families-bill-2","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/299377\/","title":{"rendered":"\u2018Imaginary income\u2019 lands family $4000 Working for Families bill"},"content":{"rendered":"

He said a number of one-off payments were being treated as though they were daily wages, including $7213 in final holiday pay and $7027 in back pay from a two-year salary negotiation.<\/p>\n

\u201cWhen we challenged this, staff explained that if someone earned $20,000 in one month and nothing for the rest of the year, the IRD would treat them as if they earned $240,000<\/a>. It is a rigid, \u2018computer says no\u2019 approach that is leaving families who are already struggling with a massive bill on their way out the door.<\/p>\n

\u201cI believe many other Kiwis are being \u2018ripped off\u2019 by this same rule without realising the maths is flawed.\u201d<\/p>\n

Tax expert Terry Baucher said Inland Revenue<\/a> took this approach out of concern that otherwise people who left early in a tax year could end up paying less tax than they would otherwise be meant to.<\/p>\n

He said the issue was also clearly connected to the abatement level, at which Working for Families credits are removed.<\/p>\n

When households earn more than $42,700 a year, their Working for Families entitlements are cut at a rate of 27%.<\/p>\n

\u201cThe threshold is so low, and everything above that is abated at 27c on the dollar. So we have an extremely low threshold, it\u2019s now below the minimum wage. Someone getting 40 hours of minimum wage is now above that. So that\u2019s the real kicker. The extra $26,000 of income just exacerbates that.\u201d<\/p>\n

He said the threshold had not been increased since 2018 and when the abatement rate was first introduced it was only 20c in the dollar.<\/p>\n

Working for Families debt has been highlighted as a problem for some time. Hundreds of millions of dollars are owing, often because people earned more than expected in a year and received too much Working for Families support. RNZ earlier reported on a couple who were overpaid $20,000 and have to pay it back at $350 a fortnight.<\/p>\n

The Government last year announced a review of Working for Families intended to avoid households getting into debt. Options being considered included more frequent reporting of income to ensure that people were not overpaid.<\/p>\n

In the 2022 year, only 24% of households receiving weekly or fortnightly payments who were squared up by IRD had received the right amount of Working for Families credits.<\/p>\n

Baucher said Inland Revenue could use tax codes to claw back overpayments.<\/p>\n

\u201cInstead of requiring people to suddenly front up with $4000 at a time, it\u2019s probably easier for them to say, \u2018okay, we\u2019re going to adjust your PAYE code and take a bit extra to claw that back\u2019. It would be for those families far more manageable \u2026 but to me the review\u2019s window dressing, to be frank.<\/p>\n

\u201cThe whole question around abatements and thresholds, and the amounts of being paid just needs complete rethink, in my view.\u201d<\/p>\n

– RNZ<\/p>\n","protected":false},"excerpt":{"rendered":"He said a number of one-off payments were being treated as though they were daily wages, including $7213…\n","protected":false},"author":2,"featured_media":299378,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[36714,16574,138,813,5988,2109,2082,157317,6132,38692,111,139,69,812,19135],"class_list":{"0":"post-299377","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-36714","9":"tag-bill","10":"tag-business","11":"tag-edmunds","12":"tag-families","13":"tag-family","14":"tag-for","15":"tag-imaginary","16":"tag-income","17":"tag-lands","18":"tag-new-zealand","19":"tag-newzealand","20":"tag-nz","21":"tag-susan","22":"tag-working"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/299377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=299377"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/299377\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/299378"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=299377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=299377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=299377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}