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Source: ONE News -
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Changes are on the way for more than 400,000 families earning
Working for Families tax credits, today's budget confirmed.
Some high income familes will lose out but low income families are
set for a little boost.
The government says changes made in this year's Budget will simplify the scheme and save it money.
Tax credits this year will cost the government $2.8 billion - about double the amount in 2005/06. By 2014/15 the figure will have reduced to $2.6 billion.
The threshold for incomes will be lowered slightly from $36,827 to $35,000. Families with incomes above this threshold will receive fewer tax credits.
Families below the new income threshold will receive an extra $7 a week.
Currently, almost all families with children and earning under $70,000 a year are entitled to support.
Since extensions to the scheme announced by the Labour-led government in 2005, many families earning up to $100,000 a year have become eligible, as well as some larger families earning more than $100,000.
However, a sole parent on $90,000 a year with two young children, for example, will have a weekly reduction of just over $11. A couple with a combined family income of $40,000 a year and three children will receive an extra $4.12 a week.
The government says the changes, which will be staggered from April 1, next year, will be "better targeted to the most vulnerable families" and savings will free up funding for other government priorities.
"Working for Families is a broad and generous scheme and that will remain the case. But these changes will better target payments towards lower income families, ensuring the scheme is sustainable into the future," Minister of Finance Bill English says.
He said the cost of the scheme was "no longer sustainable and without changes the scheme would quite quickly become unaffordable."
"At a time when the government is dealing with costs from the global financial crisis and two Canterbury earthquakes, these savings will free up funding for other Government priorities such as improving frontline public services and reducing borrowing."
Minister for Social Development Paula Bennett says the changes will target those in need.
"Lower income families and beneficiaries will be largely unaffected by these changes, and the majority of families currently receiving Working for Families will get an increase in their payments after 1 April 2012.
"A number of families higher up the Working for Families scale,
however, will receive a little less than they currently do now, or
will no longer qualify," she says.
The Labour leader was quick to criticise the changes.
"National has today delivered a Budget that won't fix our dire economic situation but will hurt hard-working Kiwis struggling to get ahead," said Phil Goff today.
"&The cuts to Working for Families will bite deep into the pockets of middle-income Kiwis - another broken promise because National said its changes would only affect top earners."
"National said it wouldn't cut KiwiSaver, Working for Families or student loans and that it wouldn't increase GST. It's done all of those things."
The Greens also criticised the changes.
"Budget 2011 introduced deep cuts to Kiwisaver, Working for Families, ACC, and tertiary education, and wide cuts to public services. These cuts total $700 million next year and total of $5.2 billion out to 2015.
"It's disappointing that we've previously had tax cuts that help the wealthy, while for the rest of New Zealand, the price of food and petrol goes up and now KiwiSaver, Working for Families, and other essential government services goes down," Green Party Co-leader Dr Russel Norman said today.
Click here for a WFF fact Sheet and WFF Tables.
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Add a Comment:
Post new commentchrisinus said on 2011-06-06 @ 10:28 NZDT: Report abusive post
Most of the students who are overseas are there because they're having problems living in NZ with low salaries and very high taxes but rip-off costs of living. If you want to keep them here, NZ needs to increase salaries and taxes to match those in Australia and UK. Then they would continue to pay their loans and new laws wouldn't be necessary. KEEP UP WITH THE WORLD, NZ!!!
JayKay22 said on 2011-05-21 @ 21:12 NZDT: Report abusive post
Why take away all course related costs for part-time students - why not simply halve it instead - make the entitlement $500 instead of $1000. That makes far more sense.
pioneer said on 2011-05-20 @ 12:04 NZDT: Report abusive post
TO MANY FAMILIES WANT HAND OUTS. THE FAMILY ON TELEVISION LAST NIGHT HAD 5 CHILDREN AND A DOG THE CHILDREN WERE OLD ENOUGH FOR THE MOTHER TO GET A JOB PLUS SHE HAD SPENT MONEY ON A STUPID TATTOO IF YOU CAN'T AFFORD CHILDREN DON'T BREED AND EXPECT THE COUNTRY TO BORROW FROM CHINA AND jAPAN FOR THEM. WE HAD 3 CHILDREN I WORKED AT NIGHT AND IN THE WEEKEND WHILE THEY WERE BABIES UNTIL THEY WENT TO SCHOOL THEN WORKED PARTIME 1 IS A SOLICITOR,2 A CEO IN AUS,3 BUSINESS MANAGER
big2al said on 2011-05-20 @ 09:06 NZDT: Report abusive post
As usual with a Nat govt, the only ideas they can come up with are selling the family jewels (SOE's) which we already know is only a short term gain & a long term loss (NZ Rail) and cutting public services. A billion dollars lol, where do they think the money is coming from? Essential services & jobs will be cut, which will lead to more spending pressure on WINZ as more unemployment benefits are paid. No matter how this Govt cleans it up, it is the poor & middle income earners who suffer.
smithy said on 2011-05-20 @ 07:48 NZDT: Report abusive post
It may lack flair and inspiration but I think it is a very sensible budget given the economic climate. I dread to think where we would be with Labour in charge who have not yet made a valid argument on any subject