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Inland Revenue

Tax Policy

PUBLISHED 30 August 2010

Views sought on proposals to promote fairness

An officials’ issues paper released today seeks feedback on suggested changes to improve the fairness of access to social assistance programmes. For more information see the media statement and the issues paper, “Social assistance integrity: defining family income". Submissions close on 24 September 2010.

Hon Peter Dunne
Minister of Revenue

Media statement

Dunne: views sought on fairer access to social assistance

Revenue Minister Peter Dunne today welcomed the release of a tax policy issues paper which seeks feedback on suggested changes to improve the fairness of social assistance.

"People should not be able to receive more social assistance simply because of how they structure their affairs or receive their income," he said.

The paper follows the Government's announcement in Budget 2010 that it will reform the tax rules around how family income is defined for entitlement to Working for Families, student allowances and community services cards.

"Basically, these schemes are intended to help low and middle-income families. People should not be getting help that they do not need.

"For example, people can receive quite large amounts of income through a trust and yet still qualify for Working for Families tax credits. That is clearly not fair," Mr Dunne said.

To address such issues, the issues paper suggests broadening the definition of family scheme income, which is used to determine entitlements to Working for Families tax credits and other programmes.

The broader scope of the definition would include income from trusts, some fringe benefits, passive income of children such as interest or dividends over $1,000 a year, and income of non-resident spouses.

"Any changes coming from the consultation process will be added by Supplementary Order Paper to the Taxation (GST and Remedial Matters) Bill which is currently before Parliament, along with other Budget 2010 tax measures requiring legislation," he said.

Changes to the definition of family scheme income for Working for Families tax credit applications and all new applications for the community services card would apply from 1 April 2011. The new definition could apply to all new applications for student allowances from 1 January 2012.

The issues paper, Social Assistance Integrity: Defining Family Income, is available at Submissions close on 24 September 2010.


Mark Stewart | Press Secretary | Office of Hon Peter Dunne
Cell +64 21 243 6985