The Government says thousands more people are eligible for temporary tax credits thanks to changes - see if you’re one of them

Bernard Hickey joins The Front Page to break down the Government's announcement of relief amid the ongoing fuel crisis.

Listen to this article — The Government says thousands more people are eligible for temporary tax credits thanks to changes - see if you're one of them

Prime Minister Christopher Luxon and Finance Minister Nicola Willis have announced a cost-of-living package designed to help some families deal with the costly fallout from the war in the Middle East.

It comprises a temporary $50 increase to the In-Work Tax Credit (IWTC), a policy first speculated about in the Herald. The change will be in force for 12 months or until 91 petrol goes below $3 a litre.

The IWTC is one of the main Working for Families Tax credits and works out at $97.50 a week to families who work with up to three children plus an additional $15 for every additional child. It comes on top of the Family Tax Credit, which goes to all families with children, regardless of whether they work or not, provided they don’t exceed an income cap.

About 150,000 households will benefit from the changes. Because the tax credits go to households and not individuals, it is impossible to know how many individual people will get the tax credit. Because of the way the tax credits work, temporarily boosting the total amount means that some people, who were not previously eligible for them, can now receive a portion of the tax credit.

Willis estimated about 14,000 households who did not get the tax credit before will get the credit at an abated rate.

The tax credits abate as people earn income over the income threshold, which will be $44,900 as of April 1, the day Willis’ temporary changes come into force.

The Herald has created a calculator which shows how much Working for Families someone may receive as of April 1, both with and without the Government’s temporary change.

Working for Families is highly circumstantial and can change depending on someone’s income fluctuations, childcare arrangements between parents who live in separate households, and changing benefit status.

This calculator only provides an estimate based on broad data. It does not round figures, like the Inland Revenue Department’s calculator leading to slightly different numbers. It also does not calculate the Minimum Family Tax credit.