Working for Families (WFF) is New Zealand’s main family tax credit programme, providing weekly or fortnightly payments to families with dependent children. It’s one of the most significant sources of financial support available to low and middle-income NZ families, yet many families either don’t realise they qualify, underestimate how much they’re entitled to, or unknowingly build up overpayments that IRD later recovers.
Who Qualifies for Working for Families?
Working for Families is available to families who are the primary caregivers of dependent children (under 18, or under 19 if still in secondary school) and who are tax residents of New Zealand. There are income thresholds — most credits begin abating once family income exceeds $42,700 — but many families earning well above this threshold still receive partial payments.
The In-Work Tax Credit specifically requires the primary caregiver to work minimum hours: 20 hours per week for a sole parent, or 30 combined hours per week for couples.
How WFF Payments Are Made
You can receive WFF payments as:
- Weekly or fortnightly payments through IRD during the year (called “weekly instalments”)
- An annual lump sum at the end of the tax year when you file your IR3
Most families prefer the regular payments for cash flow. However, if your income varies significantly during the year, annual lump sums reduce the risk of overpayments — one of the most common and financially painful WFF problems.
The Overpayment Problem
IRD calculates WFF entitlements based on your total annual family income. If you receive weekly payments based on an estimated income, but your actual income turns out higher, IRD will recover the overpayment — sometimes years later. This catches many families off guard, particularly those whose income rises during the year (bonuses, overtime, secondary income). Using a conservative income estimate when setting up payments reduces this risk.
The Abatement Rate
Working for Families payments reduce as family income rises. Above $42,700, each dollar of additional family income reduces your total WFF entitlement by 27 cents. This creates an effective marginal tax rate of approximately 27% for WFF recipients in the abatement range — on top of their income tax and ACC levy. Understanding this is important for families considering overtime, secondary employment, or salary increases.
2025–26 WFF At a Glance
| Credit | Who qualifies | Maximum annual payment |
|---|---|---|
| Family Tax Credit | Families with dependent children | Varies by number of children |
| In-Work Tax Credit | 20+ hrs/wk sole parent or 30+ hrs/wk couple | $3,770/year |
| Minimum Family Tax Credit | Very low incomes with dependent children | Tops up to ~$33,540/year |
| Best Start | All families under 1; some until age 3 | $3,692/year per child under 1 |
| Abatement starts | Income over $42,700 | 27 cents per dollar over threshold |
Guides in This Section
- Working for Families Overview — eligibility, income thresholds, and how to apply
- Family Tax Credit (FTC) — the core WFF payment based on number of children
- In-Work Tax Credit (IWTC) — extra payment for families who work minimum hours
- Minimum Family Tax Credit (MFTC) — tops up very low incomes to a minimum threshold
- Best Start Tax Credit — payments in the first three years of a child’s life
- WFF Abatement — How Income Reduces Your Credits — the $42,700 threshold and avoiding overpayments