This note is not part of the order, but is intended to indicate its general effect.
This order, which comes into force on 1 April 2012, increases some of the amounts specified in section MD 3(4) of the Income Tax Act 2007 (the Act), which are used to calculate entitlements to family tax credit under that section. Sections MF 7(1)(a) and (2) of the Act require the amounts used to calculate family tax credit to be adjusted for inflation once the cumulative increase in the New Zealand Consumers Price Index reaches 5% from the last adjustment.
Family tax credit entitlements are calculated on the basis of the amounts in section MD 3(4) of the Act as they apply to a person entitled to an amount of family tax credit.
The amount in section MD 3(4)(a)(i) of the Act for the eldest dependent child for whom the person is a principal caregiver during the entitlement period is increased from $4,578 to $4,822 if the child is younger than 16. The amounts in section MD 3(4)(b)(i) and (ii) of the Act for subsequent children are increased from $3,182 to $3,351 for children younger than 13, and from $3,629 to $3,822 for children aged 13, 14, or 15. The amounts in section MD 3(4)(a)(ii) and (b)(iii) for children who are 16 or older have not been changed.
The amounts apply in respect of the 2012–13 tax year and later tax years.
Date of notification in Gazette: 3 November 2011.
This order is administered by the Inland Revenue Department.