Taxation (Definitions of Dependent Child) Act 2010

The Taxation (Definitions of Dependent Child) Act 2010 was enacted on 23 August 2010. It was formerly part of the Social Assistance (New Work Tests, Incentives and Obligations) Amendment Bill 2010.

The new legislation amends the definition of "dependent child" in a number of Income Tax Acts. The new definition applies when determining eligibility for Working for Families tax credits and validates past payments of family support tax credits in specific circumstances.

Background

The Family Court determined that the practice of the Ministry of Social Development to treat a child who has been returned to the care, but not the custody, of his or her parents under the Children, Young Persons, and Their Families Act 1989 as a dependent child for benefit and tax credit purposes, was not supported by the previous legislation. This means the parent would be unable to claim family support tax credits or Working for Families tax credits for that child.

Key features

The Taxation (Definitions of Dependent Child) Act 2010 amends the definition of "dependent child" in section YA 1 of the Income Tax Act 2007. The definition now includes a child or young person, as defined in section 2(1) of the Children, Young Persons, and Their Families Act 1989 ("CYPF Act"), when that child or young person has been placed in the charge of his or her parent under sections 361 and 362 of the CYPF Act. This will allow the parent to apply for Working for Families tax credits in relation to that child or young person.

Similar changes have been made to the definition of "dependent child" in:

• section 374 A of the Income Tax Act 1976;
• section OB 1 of the Income Tax Act 1994; and
• section OB 1 of the Income Tax Act 2004.

In these earlier Acts, the change in definition of "dependent child" is only for the purpose of validating payments of family support tax credits made in the relevant income years.

Application dates

The change to the Income Tax Act 1976 applies for the 1991-92 and later income years.

The change to the Income Tax Act 1994 applies for the 1995-96 and later income years.

The change to the Income Tax Act 2004 applies for the 2005-06 and later income years.

The change to the Income Tax Act 2007 applies for the 2008-09 and later income years.