Policy Recommendations

  • Join the In-Work Tax Credit ($72.50 from 1 April 2016) to the Family Tax Credit for the child payment, thereby removing all paid work hours requirements.

  • Reset the abatement rate from 22.5% to 20% and freeze it. This would reduce the amount of Working for Families that is lost when somebody has additional income, e.g. through a pay rise. Under current policy, this rate is set to INCREASE to 25%.

  • Restore full annual indexation of Working for Families threshold from 2005 (which would be $45,000 in 2016). 

  • Index annually all aspects of Working for Families tax credits to wages.

  • Abolish the Parental Tax Credit and add $100 per week to the newborn’s Family 
    Tax Credit for one year if Paid Parental Leave is not taken.

  • Abolish the Minimum Family Tax Credit and liberalise the treatment of extra earned income for parents on a part benefit.