The Minimum Family Tax Credit (MFTC) is a top-up payment that ensures working families with dependent children have a minimum after-tax family income. It is specifically for low-income working families — not available to those receiving a main benefit.
The MFTC tops up your after-tax family income to approximately $33,540 per year (2025–26). You must meet the same minimum work hours as the IWTC (20 hrs/week sole parent, 30 hrs/week combined for couples) and not be receiving a main benefit. The MFTC makes up the difference between your actual after-tax income and the minimum floor — it reduces dollar for dollar as income rises above the floor.
How MFTC Works
The MFTC fills the gap between your actual after-tax family income and the minimum income floor:
MFTC = Minimum income floor − Actual after-tax family income
If your after-tax income equals or exceeds the floor, MFTC is zero. The MFTC reduces dollar for dollar as your income rises — unlike other WFF credits that abate at 27 cents per dollar.
2025–26 MFTC Income Floor
| Amount | |
|---|---|
| Annual minimum income floor | Approximately $33,540 (after tax) |
| Weekly equivalent | Approximately $645 |
The exact floor is updated periodically. Confirm the current figure at ird.govt.nz.
Eligibility
- You must be working minimum hours (20+ hours/week sole parent; 30+ hours/week combined for couples)
- You must have dependent children
- You must not be receiving Jobseeker, Sole Parent Support, or another main benefit
- You must be a NZ tax resident
Example: How MFTC Tops Up Income
Scenario: A sole parent works 25 hours/week at minimum wage ($23.15/hour as of 2026). Annual gross income: approximately $30,000. After-tax income: approximately $27,000.
- MFTC income floor: ~$33,540
- Gap: ~$33,540 − $27,000 = ~$6,540 MFTC per year
- This is paid on top of any FTC and IWTC the family also qualifies for
MFTC vs FTC vs IWTC
| Credit | For whom | Abatement |
|---|---|---|
| Family Tax Credit | All families with children (incl. beneficiaries) | 27c/$ above $42,700 |
| In-Work Tax Credit | Working families (not beneficiaries) | 27c/$ above $42,700 |
| Minimum Family Tax Credit | Very low income working families | Dollar for dollar (reduces to zero at floor) |