Reviewing and aligning definitions
The Government wants to simplify the rules and definitions used in Working for Families so families can easily understand what they are entitled to, know how it is calculated, and can easily access the payments.
The proposals in the discussion document aim to review and simplify the definitions used for Working for Families, such as “residency” and “income”. Where possible the same definition for the same concept would be used across Working for Families, Child Support and Student Loans.
The proposals cover the following terms:
- Shared care of a child – how shared care is determined for Working for Families payments would be aligned with how shared care is determined for Child Support assessments. This includes the percentage (35%) based on the number of nights in care.
- Financially independent child – the current main criteria is based on the number of hours the child is working. The Government proposes to replace this with a dollar amount, which would be easier to understand and administer. It is also reviewing whether people should be able to claim Working for Families for a child receiving a student allowance.
- Resident and residency – these definitions are not consistent across Working for Families, Child Support and Student Loans. The distinction between being resident and non-resident is important as Working for Families payments are intended to help families with children in New Zealand. The Government is proposing that a person will be treated as being resident in New Zealand for Working for Families payments if they have been living in New Zealand for 183 or more consecutive days. This definition will be consistent with what is used for Student Loans.
Currently for Working for Families, either the principal caregiver or the child must be resident, but they don’t both have to be resident. The Government is proposing that the qualifying child must be physically present in New Zealand, and is seeking feedback on whether the qualifying child should also be a permanent resident of New Zealand.
- Income – the Government is proposing minor amendments to clarify the definition of income used for Working for Families to align it with what is used for Student Loans.
Flexibility to respond to unusual family circumstances
Families and individuals have many different circumstances, and it is impossible to legislate for every different circumstance. In some cases applying the law doesn’t end up with the right result for every family.
The Government acknowledges that a “one-size-fits-all” approach doesn’t work. It is proposing to give Inland Revenue the power to use discretion when customers have unusual or exceptional circumstances, to get the right result for that customer.
In general it is expected that Inland Revenue would use discretion for the customer’s benefit and not to remove or reduce a customer’s entitlement to Working for Families.