Enhancements to Working for Families
2005 amendments extend the Working for Families package and raises the income threshold at which the rate of family assistance begins to abate to $35,000.
Section KD 2(6) of the Income Tax Act 2004
The Working for Families package has been extended to provide additional income assistance for working families, including middle-income families that will become entitled to family assistance for the first time.
As a result, the income threshold at which the rate of family assistance begins to abate has been raised to $35,000 and the rate at which assistance abates for income that is over the new threshold has been reduced to 20 percent.
The family assistance provisions enhance changes that were already scheduled to come into effect on 1 April 2006 as part of the phased implementation of Working for Families, which began in 2004.
The amendments to the threshold and the abatement rate will take effect from the tax year beginning 1 April 2006.
The first amendment increases the income threshold at which family assistance begins to abate at $35,000. This is an increase from the threshold of $27,500 that was scheduled to apply from 1 April 2006.
The second amendment reduces the rate at which family assistance abates for income that is over the new threshold to 20 cents in the dollar. This reduces the abatement rate from the 30 cents in the dollar that was scheduled to apply from 1 April 2006.
Schedule 12 of the Income Tax Act 2004 has been updated to reflect the new income threshold.