Clause 3 provides that clauses 4 to 23 amend the Income Tax Act 2007.

Clauses 4 to 9, and 11 change cross-references in the Income Tax Act 2007, as a consequence of the Best Start tax credit.

Clauses 10, 12, and 13 insert references to the Best Start tax credit in appropriate core provisions within the Working for Families regime, to ensure that the base rules of the Working for Families regime apply for the Best Start tax credit.

Clause 14 amends section MC 6, to ensure that a person does not get the Best Start tax credit at the same time that they receive a parental tax credit, paid parental leave, or certain other forms of social assistance (ie a parent’s allowance or a children’s pension).

Clauses 15 and 16 change cross-references, as a consequence of the Best Start tax credit.

Clause 17 amends section MD 11, to stop a person receiving parental tax credit for children born on and after 1 July 2018 (ie the start date for the Best Start tax credit). For a child born before then, but with an expected due date of after then, the person may be entitled to the Best Start tax credit. However, they may elect to receive parental tax credit instead of the Best Start tax credit.

Clause 18 amends section MF 1, to provide an application for payment, by the Commissioner, by way of instalment for the Best Start tax credit, as per the usual Working for Families regime.

Clause 19 amends section MF 2, to provide that the Commissioner does not have to pay by way of instalment for the Best Start tax credit for certain beneficiaries, as per the usual Working for Families regime.

Clause 20 amends section MF 4, to provide for the calculation of a payment by the Commissioner, by way of instalment for the Best Start tax credit, as per the usual Working for Families regime.

Clause 21 amends section MF 7, to provide an inflation-linked Order in Council mechanism to enable changes to the amount of the Best Start tax credit, and an Order in Council mechanism to enable changes to the abatement threshold and abatement rate for the Best Start tax credit.

Clause 22 inserts a new subpart MG, to provide the Best Start tax credit. New section MG 1 provides the base credit entitlement. A principal carer is entitled for a dependent child under 3 years old, if the relevant base criteria are met (eg residency). New section MG 2 provides the Best Start credit amount of $3,120 a year. It also provides for shared care of a child, and for continuation following the death of a child. An Order in Council mechanism to enable changes to the amount of the Best Start tax credit is included. New section MG 3 provides for the abatement of a person’s Best Start tax credit entitlement at the rate of 21 cents for every dollar over the threshold of $79,000 of family scheme income. Also, an Order in Council mechanism is provided, to enable changes to the abatement threshold and abatement rate for the Best Start tax credit. New section MG 4 provides for some persons, who have received an income-tested benefit, to have their entitlement to the Best Start tax credit protected, for the purposes of the abatement calculation in new section MG 3.

Clause 23 amends section YA 1, which contains definitions. New subclauses (2) and (5) to (8) make cross-reference changes for the Best Start tax credit. New subclause (3) provides a definition of Best Start credit abatement, as part of calculating a person’s Best Start tax credit entitlement. New subclause (4) provides a definition of Best Start tax credit, as part of calculating a person’s Best Start tax credit entitlement. New subclause (9) amends the definition of dependent child, to ensure that people in receipt of certain benefits for children are entitled to the Best Start tax credit. New subclauses (10) to (20) and (22) to (25) make cross-reference or consequential changes for the Best Start tax credit. New subclause (21) provides a definition of protected Best Start tax credit, to prevent abatement of the Best Start tax credit.

Clause 24 provides that clauses 25 to 40 amend the Tax Administration Act 1994.

Clauses 25 to 40 amend the Tax Administration Act 1994, to ensure that the standard administration and instalment payment provisions for Working for Families tax credits apply for the Best Start tax credit, as appropriate. The 1 departure from the standard administration is made for Best Start recipients who have no other Working for Families tax credits and 1 child under 1 year old: To lower these recipients’ compliance burden, no income information is requested. See clauses 28 and 36.

Clause 41 amends the Housing Restructuring and Tenancy Matters Act 1992, as a consequential matter, to ensure that the Best Start tax credit is taken account of appropriately in that Act.

Clause 42 amends the Social Security Act 1964, as a consequential matter, to ensure that the Best Start tax credit is taken account of appropriately in that Act.

Clause 43 amends the Social Security Act 1964, as a consequential matter, to ensure that the Best Start tax credit is taken account of appropriately in the calculation of temporary additional support.

Clause 44 amends the Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Order 2017, as a consequential matter, to ensure that the Best Start tax credit is taken account of appropriately in that Order.

Clause 45 amends the Taxation (Abated Interim Payments of subparts MA to MF and MZ Credit) Regulations 2002, as a consequential matter, to ensure that the Best Start tax credit is taken account of appropriately in the interim payment of WFF tax credits.

Clause 46 repeals the Taxation (Budget Measures: Family Incomes Package) Act 2017, to remove the personal tax cuts in that Act, and to re-instate the independent earner tax credit (IETC).

Clause 47 provides that clauses 48 to 57 amend the Income Tax Act 2007.

Clause 48 amends section MD 3, to provide, for the 2018–19 tax year, average annual amounts of the family tax credit that take into account the increases to the tax credit on 1 July 2018.

Clause 49 amends section MD 3, to provide, for the 2019–20 and later tax years, the increased annual amounts of the family tax credit that take into account the increases to the tax credit on 1 July 2018.

Clause 50 amends section MD 13, to provide, for the 2018–19 tax year, average annual abatement thresholds and rates for the family tax credit that take into account the increases for the tax credit on 1 July 2018.

Clause 51 amends section MD 13, to provide, for the 2019–20 and later tax years, the increased annual abatement thresholds and rates for the family tax credit that take into account the increases for the tax credit on 1 July 2018.

Clause 52 amends section ME 1, to increase the minimum family tax credit, to align with the targeted social assistance increases in this Bill.

Clauses 53 and 54 repeal sections MF 4D and MF 4E. They are redundant.

Clause 55 inserts new sections MF 4F and MF 4G, to provide instalment amounts for the 2 parts of the 2018–19 tax year, to reflect increases in family tax credit from 1 July 2018.

Clause 56 amends section MF 7, to reset the inflation indexation to account for the 1 July 2018 increases to the family tax credit.

Clause 57 amends section MF 7, to change cross-references and repeal redundant provisions, consequential to the increases to the family tax credit.

Clause 58 amends the Taxation (Annual Rates and Budget Measures) Act 2011, by removing redundant provisions as a consequence of the increases to the family tax credit amounts, abatement thresholds, and rates on 1 July 2018.

Clause 59 provides that clauses 60 to 67 amend the Social Security Act 1964 (the principal Act).

Clause 60 amends section 3(1), which contains definitions, to define a winter energy payment, ensure that a winter energy payment is a benefit, and cross-refer to the special definition of dependent child in new Schedule 18A (inserted by clause 66).

Clause 61 inserts new Part 1KA (winter energy payment), which contains new sections 61FE to 61FJ.

New section 61FE states the payment’s purpose, which is to provide targeted financial assistance to help certain people meet their household heating costs during the winter period (as defined in new section 61FF).

New section 61FF defines the following 3 key terms:

• qualifying benefit, which means—

  • a main benefit under the principal Act (as defined in section 3(1) of that Act); or

  • New Zealand superannuation; or

  • veteran’s pension:

• relevant payment date, which, for a person who is receiving a qualifying benefit (or a portion of it), either as the person granted that benefit or as the spouse or partner of that person, for 1 or more days during the winter period, means the date on which the person is paid a weekly or fortnightly instalment of the person’s qualifying benefit (or a portion of it) for those days:

• winter period, which, for a calendar year, means the 22-week period starting on 1 May.

New section 61FG(1) (eligibility requirements) provides that a person is entitled to a winter energy payment for 1 or more days during the winter period if, for those days,—

• the person is receiving a qualifying benefit (or a portion of it), either as the person granted that benefit or as the spouse or partner of that person; and

• the qualifying benefit (or a portion of it) is payable to the person; and

• the person is not disqualified under new section 61FG(2).

New section 61FG(2) ensures that the person is, however, not entitled to a winter energy payment for 1 or more days during the winter period if, for those days,—

• the qualifying benefit is payable at a rate prescribed in respect of a person who is married or in a civil union or in a de facto relationship, and the chief executive has determined under new section 61FG(3) that the person’s spouse or partner is entitled to a winter energy payment; or

• the rate of the person’s qualifying benefit is required by section 75(3) to be reduced to the rate payable to long-term hospital patients, and the payment has been reviewed under section 81(1) and terminated under new section 81(5); or

• the person is receiving long-term residential care in a hospital or rest home, and that care is funded, in whole or in part, under the New Zealand Public Health and Disability Act 2000; or

• the person is receiving residential care services (as defined in section 3(1) of the principal Act), and those services are funded, in whole or in part, under the New Zealand Public Health and Disability Act 2000; or

• the person has made, and not revoked, an election not to receive the payment (see new section 61FH).

New section 61FG(3) requires the chief executive, if the qualifying benefit is payable at a rate prescribed in respect of a person who is married or in a civil union or in a de facto relationship, to determine which 1 of the spouses or partners is (as only 1 of them can be) entitled to a winter energy payment.

New section 61FH relates to an election not to receive the payment.

New section 61FI is about instalments, rates, and payment.

New section 61FJ indicates how the payment is affected by the beneficiary’s absence from New Zealand.

Clause 62 amends section 61H, which enables an Order in Council to amend specified provisions by increasing the amount of a benefit set out in them. The amendment ensures that the specified provisions include new Schedule 18A (inserted by clause 66), and that an Order in Council can increase the amount of any winter energy payment set out in that schedule. No similar amendment is to be made to section 61HA (annual CPI adjustment of rates of certain benefits).

Clause 63 amends section 72(a), which ensures that no person is entitled to receive more than 1 benefit in the person’s own right, but also lists sections that are exceptions to that rule. The amendment adds, to the sections listed, new section 61FG (inserted by clause 61), because it contemplates that a person is entitled to receive, in that person’s own right, both a winter energy payment and another benefit.

Clause 64 amends section 81 (review of benefits). New section 81(5) enables the chief executive to terminate a winter energy payment if satisfied, after reviewing the payment under section 81(1), that—

• the rate of the beneficiary’s qualifying benefit (under new section 61FG(1)(a)) is required by section 75(3) to be reduced to the rate payable to long-term hospital patients (even if a higher rate is paid under section 75(4)); and

• continuing the payment is not consistent with the purpose stated in new section 61FE.

Clause 65 amends section 82(2A) to make it clear that the winter energy payment is a benefit paid in respect of a 7-day week.

Clause 66 inserts new Schedule 18A. New Schedule 18A sets out the rates of the winter energy payment.

Clause 67 inserts new Part 7 of Schedule 32. The new Part contains transitional provisions related to the winter energy payment. Clause 29 in the new Part clarifies aspects of eligibility based on a qualifying benefit. Clause 30 in the new Part provides for a special winter period, instalments, and rates for 2018.

Clause 68 makes consequential amendments to the Acts listed in Schedule 3.

Clause 69 provides that clause 70 amends the Social Security Act 1964.

Clause 70 amends Schedule 4 (maximum rates of orphans’ benefits and unsupported child’s benefits). The amendments increase the rates by $20.31 per week, to reflect the increase in the eldest child family tax credit rate for children aged 0–15 years.

Clause 71 provides that clauses 72 to 74 amend the Social Security Act 1964.

Clauses 72 and 73 make amendments to ensure accommodation supplement areas are based on urban areas, urban zones, or area units as on 26 June 2017 (not, as under current law, as from time to time) defined by the Government Statistician (and so are unaffected by any later new or altered definitions adopted by the Government Statistician). The provisions amended are section 61I – which authorises orders altering, in stated ways, the definitions in clause 1 of Part 1 of Schedule 18 of accommodation supplement Area 1, Area 2, and Area 3 – and those definitions.

Clause 74 inserts new Part 6 of Schedule 32. The new Part contains transitional provisions related to accommodation supplement areas. Clause 27 in the new Part requires parts of New Zealand, on and after 26 June 2017 and until the commencement of that clause 27, to be taken to be as defined on 26 June 2017 by the Government Statistician. Clause 28 in the new Part is about the continuation of the Social Security (Budget 2017—Rates of, and Areas for, Accommodation Supplement) Order 2017.

Clause 75 provides that clauses 76 to 78 amend the Social Security Act 1964.

Clause 76 amends section 3(1), which contains definitions. The amendment inserts a new definition, for accommodation supplement purposes, of the terms Area 1, Area 2, Area 3, and Area 4. The new definition makes clear that those terms—

• are defined in regulations made under new section 61I (inserted by clause 77) for the purposes of Part 1K and Schedule 18 (accommodation supplement); but

• until the commencement of the first regulations made under that section, refer to the terms defined in clause 1 of Part 1 of Schedule 18.

Clause 77 replaces section 61I, which authorises orders altering, in stated ways, accommodation supplement Area 1, Area 2, and Area 3 (as defined in clause 1 of Part 1 of Schedule 18). Under section 61I (as earlier amended by this Bill), the alterations must be based on urban areas, urban zones, or area units (as those terms were on 26 June 2017 defined by the Government Statistician). New section 61I instead enables regulations that define fully, for accommodation supplement purposes, the terms Area 1, Area 2, Area 3, and Area 4.

Clause 78 amends Part 1 of Schedule 18, which contains preliminary provisions about the accommodation supplement. The amendment repeals the definitions, in clause 1, of Area 1, Area 2, Area 3, and Area 4, on the commencement of the first regulations made under new section 61I (inserted by clause 77).