Around 340,000 families receive Working for Families payments. For many, the payments are an important part of their weekly income - approximately 24% of customers who receive them earn under $42,700 a year.
Working for Families can be complex and difficult for some customers to understand. Customers need to estimate their income, and it’s been hard for some to do this, especially if people worked variable hours or multiple jobs or earned unexpected lump sums. Paid out leave, changing jobs or child support can also be a factor.
We’re always focused on helping families get the amounts right, minimising underpayments or overpayments. This relies in part on customers giving us timely updates during the year if their circumstances change.
Around two-thirds of customers who received regular payments during the year were paid within 20% of what they should have - the remaining customers were paid out at the end of the year. 22% received exactly the right amount during the year.
As a way of exploring potential improvements, we’ve talked with customers about their experiences getting the credits, including the effect of underpayments and overpayments. If a family’s income or circumstances have changed during the year, we may need to reduce their payments, sometimes down to nil. Customers are billed at the end-of-year ‘square-up’ if they’ve received overpayments; this may be written off if the family is experiencing serious hardship.
Some families told us they often deliberately overestimate their income to stay safe.
Families have continued to contact us over 2022–23 to get reassurance about their payments and talk about their circumstances. During the year, we identified families at risk of overpayment and worked with them to avoid this happening, for example by reducing their payments for the remainder of the year.
In February 2023, we reviewed 4,000 customers who were receiving the minimum family tax credit to ensure they should still be receiving it in the new year starting April 2023. This credit is a top-up to weekly incomes for our lowest-income families (earning $34,126 or less after tax) so providing them with certainty around their payments was a special priority.
Te Tari Taake Inland Revenue also continued to write off Working for Families debt for customers in serious hardship. The number of customers in debt and the amount owed has been slowly trending up over time. 12% of families customers owed debt at 30 June 2023.
Since 2019, Te Tari Taake Inland Revenue has been involved in cross-government work to improve the persistent issues that affect families. The debt owed by customers to multiple agencies has been a primary focus. Research from September 2020 showed that approximately 566,600 low-income New Zealanders owed $3.5 billion of debt to us and 2 other agencies. Of this debt, over $2.5 billion was owed by people in households with children.
This year, we have led the development of an all-of-government policy framework covering the creation and management of debt. It was adopted by the Government in July 2023.
The aim of the framework is to:
- improve fairness and consistency of how people are treated across government agencies
- put more emphasis on debt prevention in policy design, and
- ensure people get appropriate relief if they’re in hardship.
A report back to Cabinet in July 2024 will assess whether the framework has been effective. In tandem with the framework, Te Tari Taake Inland Revenue and other agencies are working on specific policy options to improve the management of problem debt.
In 2022 and 2023, we ran a campaign to raise people’s awareness of Working for Families entitlements. The campaign was inspired by what children say they would do from the extra money with the payments.
Working for Families
- Families received a net $2.97 billion in Working for Families payments this year.
- 226,000 customers received weekly or fortnightly payments in the 2023 tax year.
- 97,000 customers were assessed at the end of the year and received a lump sum if their income qualified them.
- $2,200 was the median amount owed by families customers at 30 June 2023. 46% of the debt was over 2 years old.
- Provisionally at 30 June 2023, 60,500 customers received an overpayment this year.
- 2022: 99,000
- 2021: 93,000.
There's more about the services families receive from us here.
People receive payments they are entitled to enabling them to participate in society
Paid parental leave (PPL) sits alongside Working for Families and child support as a way to help families at a very important time. This year, $605.6 million in PPL payments went to 57,000 new parents. PPL helps make up for lost income after a baby is born.
96% of parents who applied for PPL did it online, we pre-populated as much information on their applications as possible. 99.9% of the initial payments went into customers’ bank accounts on the first payday after their agreed date of entitlement.