A income-boosting family tax credit scheme wasn’t entirely new; the main tax credits already existed. In April 2006, the Child Tax Credit, a Jim Bolger Government tax credit that topped up the income of families that worked, was scrapped and replaced with the In-Work Tax Credit (IWTC). A new abatement rate of 20% was introduced, meaning that for every dollar earned above the abatement threshold, the tax credit was reduced by 20 cents. Family Tax Credit rates were increased by $10 a week. National and Labour Governments have both increased abatement rates too, meaning families lose their tax credits much faster.

Source: New Zealand Herald December 31, 2025 05:12 UTC