Working for Families in New Zealand: Who Can Qualify?

Working for Families can help eligible households with the cost of raising children, but living and working in New Zealand does not by itself establish entitlement. For a family that has recently arrived, applying can also affect an overseas-income tax exemption.

Start with three questions: who provides the child's day-to-day care, which residence route the family can use, and whether applying would end a transitional tax exemption. Once those are settled, work out the family's income and the credits available. This guide covers the 2026/27 tax year ending 31 March 2027.

Start with your family's situation

Consider a family that moves from England to Christchurch. They have been here for only four months, but their child has been granted a New Zealand resident visa and is living in New Zealand. The child route may allow them to meet the residence condition even though the adults have not completed 12 months of residence. This does not, by itself, establish that the family qualifies for a payment: the caregiver test, income, other entitlements and the overseas-income exemption still need to be considered.

Which residence route can the family use?

For 2026/27, Inland Revenue provides two alternative routes through the residence test. Under the caregiver route, the claimant must be a New Zealand resident, have lived in New Zealand continuously for at least 12 months at some point, remain a New Zealand tax resident while receiving payments and not be a transitional tax resident or the partner of one. Alternatively, the dependent child may meet the residence requirement by being a New Zealand resident and physically present in New Zealand. You do not have to satisfy both routes.

Holding only a temporary visa is not a substitute for the relevant residence requirements. Immigration residence and income-tax residence are different concepts. Do not assume that renting a home here or receiving a visa automatically means someone meets every Working for Families condition.

Inland Revenue sets out both alternatives and an example involving a newly resident child in its residency requirements.

The tax trade-off for new and returning residents

Some people who become New Zealand tax residents for the first time, or return after a long period overseas, qualify for a temporary exemption on most foreign-sourced income. This is commonly called the transitional residence or temporary tax exemption (TTE). It can last for approximately four years and can be valuable where a household has overseas investments, rental property or other income covered by the exemption.

Inland Revenue warns that a household cannot keep that exemption and apply for Working for Families, including Best Start. An application can end the transitional exemption for the applicant or their partner. The lost exemption cannot simply be reinstated because the family later decides that the Working for Families payments were too small.

For example, before applying, a family with qualifying income from UK investments or an overseas rental property should compare the likely Working for Families entitlement with the New Zealand tax potentially payable if the exemption ends. Not all foreign income is exempt. The result depends on tax residence dates and the type of income, so a comparison based on a single annual benefit figure is not enough.

This is a decision to make before registering. Inland Revenue's new and returning residents guidance explains the choice and its effect on partners.

Consider eligibility and the family's tax position before applying.

Who qualifies as a caregiver or dependent child?

The claimant generally must be at least 16 and responsible for a dependent child's day-to-day care on an ongoing basis for at least one-third of a four-month period. Being the child's parent is not essential. Grandparents and other carers can qualify where the rules are met. If parents share care, Inland Revenue considers the actual arrangement. Having two homes does not automatically mean that both carers receive the full credit.

Children aged 15 or younger normally meet the age part of the dependent-child definition. A 16- or 17-year-old must remain financially dependent.

An 18-year-old must still be financially dependent and attending school or a tertiary institution; this extension ends at the earliest of the prescribed end date, leaving education or becoming financially independent. A married child or a child in a qualifying partnership is not treated as dependent for this purpose.

For the detailed tests, see Inland Revenue's principal caregiver rules and dependent child guidance. A child's age alone is not enough to settle entitlement.

The four Working for Families payments

The Family Tax Credit is the main income-tested credit. In 2026/27, its full-year base amount is NZ$7,921 for the eldest eligible child and NZ$6,454 for each additional eligible child. These are the amounts before any income-related reduction, and do not mean every family will receive them.

The In-work Tax Credit supports families earning income from paid work, including qualifying self-employment. Passive income alone is not paid work, and certain government payments can affect eligibility. For families with 1 to 3 children, the normal maximum of roughly NZ$97 a week was temporarily increased to NZ$147 during 2026/27.

Families with 4 or more children can receive an additional NZ$780 a year for each child after the third. The extra NZ$50 a week is not guaranteed for the whole year: it can end early if the published petrol-price trigger is met. See IRD's In-work Tax Credit guidance for the applicable period and family size.

Best Start supports eligible families with children in their first three years. For 2026/27, the maximum is NZ$77 a week. The income test depends in part on whether the child was born before 1 April 2026 or on or after that date. Best Start cannot be paid for the same child while a parent receives paid parental leave payments for that child. An existing Best Start entitlement for a different child may continue if its conditions remain satisfied.

The Minimum Family Tax Credit serves a different purpose. It is intended to lift qualifying wage-earning households to a prescribed after-tax minimum. The claimant must satisfy a salary-or-wages test and working-hours conditions; ordinary self-employment alone does not satisfy that test. It should not be estimated by applying the Family Tax Credit income threshold.

You can compare the payments using Inland Revenue's Working for Families overview and its entitlement calculator. The calculator provides an estimate, not a final assessment.

The relevant income is the family's income, not just your wage

Working for Families generally uses the combined family scheme income of you and your partner, with specific adjustments. Salary and wages, net business earnings, rental income and relevant overseas income may all matter. Under the 2026/27 rules, some amounts involving trusts and closely held companies can also be included. A dependent child's passive income exceeding NZ$500 may affect the calculation to the extent of the excess.

For a sole-trader household, use net business profit after relevant deductible expenses and the required family-income adjustments, rather than customer receipts or money drawn for living costs. A partner who is not a New Zealand tax resident can also have worldwide income relevant to the current 2026/27 calculation.

An owner of a closely held company should not rely solely on salary drawings. Certain company profit adjustments may apply. Our income and payment guide works through the calculation for eligible families.

Inland Revenue's working out family income guide sets out the adjustments.

Review both partners' income and household circumstances before registration.

Applying and managing repayment risk

Families can generally choose weekly payments, fortnightly payments or a lump sum after the tax year ends. Instalments help with household expenses but depend on estimated full-year income and current circumstances. If final income is higher than expected or care arrangements change, part of the instalments may need to be repaid. A year-end lump sum uses actual information and avoids the usual in-year estimate risk, though a later reassessment can still change the amount.

Before registering, confirm the children's residence and care arrangements, gather IRD numbers for the family, identify both partners' income sources and prepare a full-year estimate. If you have foreign income, assess whether an existing transitional tax exemption would be lost. You can then use myIR and Inland Revenue's eligibility tools instead of starting with a weekly benefit amount alone.

The registration guide explains what you need before applying.

From 1 April 2027, do not rely on the old residence test

The Taxation (Budget Measures) Act 2026 changes the residence rules and parts of the family-income rules for 2027/28 and later years. In general, the new residence approach requires both the principal caregiver and the child to ordinarily reside and be physically present in New Zealand, subject to specified temporary-absence and transitional provisions. A family that qualified under the child-only route in 2026/27 should check its position again for 2027/28.

The effective dates and legislative provisions are in the Taxation (Budget Measures) Act 2026. Establish eligibility for the relevant tax year and understand the full tax consequences before applying.

If you choose regular instalments, our overpayment guide explains how the final year-end calculation can lead to a repayment.

Disclaimer: This article is general information about New Zealand tax and family assistance, not personalised advice. Entitlement and reporting depend on your circumstances, the tax year and the rules then applying. Seek professional advice before making significant tax or benefit decisions.