Family Tax Credit estimate after abatement.
Estimated Family Tax Credit
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Per fortnight
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Full entitlement before abatement
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A top-up that shrinks as you earn more
Working for Families is the government’s way of putting money back into the hands of households raising children. The Family Tax Credit, the part this calculator estimates, pays a set amount for each child, then claws it back gradually once family income climbs above a threshold. The design is deliberate: full support flows to lower-income families, and it tapers off rather than cutting out at a cliff, so a pay rise never leaves you worse off overall. Because the credit is paid through Inland Revenue, either fortnightly during the year or as a lump sum after it, knowing your rough entitlement helps you budget and avoid the unpleasant surprise of an end-of-year overpayment to repay.
This estimator is for parents and caregivers wanting a quick read on the Family Tax Credit before applying or updating their details with IRD. It covers that one credit only, which is the largest piece for most families, not the whole Working for Families package.
First child, then each additional child
The credit is not a flat per-head figure. The eldest child attracts the highest amount, $7,524 a year in the rates this tool uses, and each additional child adds $6,138. So the full annual entitlement before any reduction is $7,524 for one child, $13,662 for two, $19,800 for three, and so on. That full figure is what you would receive if your family income sat at or below the abatement threshold. Above it, the taper starts eating in, which is the part that catches families out as their income grows.
Two children on a household income of $80,000
Take a family with two children and combined income before tax of $80,000. The credit is built, then cut back, as follows.
| Step | Amount |
|---|---|
| Eldest child | $7,524 |
| Second child | $6,138 |
| Full entitlement before abatement | $13,662 |
| Income over $42,700 ($80,000 less $42,700) | $37,300 |
| Abatement at 27 cents in the dollar | $10,071 |
| Estimated annual Family Tax Credit | $3,591 |
| Per fortnight | $138 |
So this family keeps about $3,591 of a possible $13,662, because over half of it has abated away by $80,000 of income. The chart traces how the credit falls as income rises past the threshold, reaching zero around $93,300 for two children.
What this estimate leaves out
The Family Tax Credit is one part of Working for Families, and the others can change your real entitlement. The In-Work Tax Credit rewards households in paid work and is not modelled here. Best Start pays for children under three regardless of work status, with its own income test. The Minimum Family Tax Credit tops up the lowest working incomes to a guaranteed level. None of these are in this number, so treat the result as the Family Tax Credit slice rather than your total package. The rates and the $42,700 threshold also reset each April, so a figure that is right today can shift at the start of the next tax year.
A practical warning that saves real money: Working for Families paid fortnightly is based on the income you estimate at the start of the year. If your household income rises, say a partner returns to work or picks up overtime, and you do not tell IRD, you can be overpaid and have to repay it after the year squares up. The fix is simple. Update your income estimate with Inland Revenue whenever it changes materially, and you avoid both the debt and the shortfall.
Does the abatement use income before or after tax?
Before tax. Working for Families abatement is based on family income before tax, broadly the combined gross income of both caregivers, with some adjustments for things like trust income or certain investment income. That is why a household can look comfortable on take-home pay yet still abate sharply, because the test runs off the larger gross figure. Enter your before-tax family income for the closest estimate.
Should I take Working for Families weekly or as a lump sum?
Either works, and it comes down to your confidence in your income estimate. Fortnightly payments help with regular costs but carry the risk of repayment if your income ends up higher than estimated. Taking it as an end-of-year lump sum, once Inland Revenue knows your actual income, removes that risk entirely at the cost of waiting. Households with steady, predictable income often take it during the year, while those with variable or rising income sometimes prefer the lump sum for peace of mind.