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Income-tested benefits, Student Allowance and New Zealand superannuation (NZ Super) are taxable income.

This means tax is deducted by the Ministry of Social Development (MSD) before they pay you. The income will also be included:

  • in your end of year income tax assessment or IR3 tax return
  • when calculating your Working for Families entitlements and student loan repayments. 

Tax codes

The amount of tax deducted depends on the tax code you use. Income-tested benefits automatically use the M tax code.

You choose your tax code for your Student Allowance and NZ Super based on your overall income and circumstances. For example, if you have a second job or a student loan.

Find out more about using the right tax code for your situation.

About tax codes 

ACC earners' levy 

Income-tested benefits, NZ Super and Student Allowance are not liable for the ACC earners’ levy, so it will not be deducted from your payments.

Income-tested benefits

Income-tested benefits include:

  • Emergency benefit
  • Jobseeker support
  • Sole parent support
  • Supported living payment
  • Young parent payment
  • Youth payment.

Non-taxable income-tested benefits

These types of benefits are income-tested but do not have tax deducted from them. They also do not affect your Working for Families entitlement.

  • Accommodation supplement
  • Childcare subsidy
  • Disability allowance
  • Temporary additional support payments.

The Orphan's benefit and Unsupported child's benefit are not taxable but are included as income for your Working for Families entitlement. 

Contact MSD directly if you want more information about your benefit, Student Allowance or NZ Super.

Last updated: 28 Apr 2021
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