We’re changing the way we calculate income for FamilyBoost customers who receive schedular payments.
Why we’re doing this
We have identified that the current legislation for FamilyBoost payments is not working as intended for customers with schedular payments.
The legislation currently treats schedular payments the same way as salary and wages.
This means that the income information from the quarter you are claiming FamilyBoost for will be used to work out the FamilyBoost entitlement, rather than the income from the previous tax year.
This could disadvantage schedular payment customers, as any related expenses for the relevant quarter cannot be considered and the gross level of payment will be treated as income.
A law change is coming
A remedial change to the law is planned to correct this. We expect the remedial will come into effect on or before 1 April 2025.
How we will correct this issue
Until this correction is made, we will be applying an exemption under Section 6E of the Tax Administration Act 1994. This lets us ignore the amount from schedular payments reported in the quarter.
Instead, when calculating the entitlement for FamilyBoost customers with income from schedular payments we will use the greater of:
- 25% of the income from the previous tax year,
- reported income that is not from schedular payments (for example, salary or wages).
Opting out of the exemption
If you are a schedular payment customer, you can choose to opt-out of this exemption by sending us a FamilyBoost web message in myIR.
You will need to tell us that you wish to opt-out of the exemption before 31 March 2025.
If you opt-out, we will use your income information from the relevant quarters, which includes the gross amount of schedular payments before the deduction of expenses.
Tax Administration (FamilyBoost Tax Credit Income and Schedular Payments) Exemption Notice 2024