Increased support for lower income families | Applications for 6th RSP now open | Meal expenses fact sheet |

By December 16, 2021 No Comments

Increased support for lower income families

Last week saw the passing of The Taxation (Covid-19 Support Payments and Working for Families Tax Credits) Bill, legislation which only took two days from date of introduction to date of enactment.

The desired outcome of the Bill was to increase the incomes of those who receive the Family Tax Credit, the Best Start Tax Credit and the Minimum Family Tax credit, which is attained by not only increasing payment quantum, but also by adjusting the abatement rate and income thresholds.

The nuts and bolts: 

  • An increase in the Family Tax Credit by almost $15.00 per week for the eldest child in a family and around $13.00 per week for subsequent children from 1 April 2022.
  • Provides for a scheduled CPI indexed increase to Best Start from $60.00 to $65.00 per week from 1 April 2022.
  • An increase in the abatement rate for the Family Tax Credit and the In-Work Tax Credit from 25% to 27% from 1 April 2022; and,
  • An increase in the Minimum Family Tax Credit threshold from $31,096 to $32,864 from 1 April 2022.

The passing of the Bill has also seen the removal of the requirement for a change in Alert levels for activating the Resurgence Support Payment under the new Covid-19 Protection Framework – an amendment to ensure that future Covid support payments schemes are more flexible and are no longer dependent on a change to alert levels to trigger them.

Applications for 6th RSP now open

It’s becoming an almost weekly event, with the passing of the Covid-19 Resurgence Support Payments Scheme (August 2021) Amendment Order (No 6) 2021 (SL 2021/374), which mainly came into force on 23 November 2021 and amends the Covid-19 Resurgence Support Payments Scheme (August 2021) Order 2021 to provide for a sixth grant payment.

The specified period for the sixth grant starts on or after 19 November 2021.

The latest order also brings forward the time when the specified periods for the fourth, fifth, and sixth grants end, being on the earlier of the following:

  • The close of the day before any area of New Zealand moves to the Covid-19 Protection Framework, or
  • Immediately before all areas of New Zealand return to Covid-19 alert level 1.

Finally, take note that applications for the first, second and third RSP close on 1 December 2021.

Meal expenses fact sheet

Now if your memory is better than mine (not hard!), you may recall the AWIR article a few weeks back about IS 21/06, an interpretation statement that covers the income tax and GST treatment of meal expenses incurred by self-employed persons. It also discusses the treatment of meal allowances paid to employees to illustrate the differences with the treatment of self-employed persons, and also the treatment of entertainment expenditure for the same reason.

Well almost like a quick reference guide, IR has now released IS 21/06 FS1, which is a four-page cheat sheet if you like, which provides at a glance the most likely income tax treatment of meal expenses under certain scenarios. However, if you’re not convinced by the suggested answer with respect to your specific scenario, then you can always refer to the detailed analysis contained in the 37-page original document.

Both the original IS and the fact sheet can be located within IR’s Tax Technical section of their website here.

This article from the ‘A Week in Review’ newsletter was originally published Monday 29th November 2021. If you have any questions or would like a second opinion on any national or international tax issues, please contact me richard@gilshep.co.nz. 

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