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Families win with budget tax breaks

NZ Newswire logoNZ Newswire 25/05/2017 Karen Sweeney

Families and low to middle income earners are the biggest beneficiaries from surpluses in Finance Minister Steven Joyce's first budget.

The lowest income tax bracket will be lifted from $14,000 to $22,000 and the middle income bracket from $48,000 to $52,000.

It means those earning more than $22,000 a year will save $10.77 a week in tax while those on more than $52,000 will reduce their tax by $20.38 a week.

But they'll have to wait until April 1 next year to see any change to their weekly pay packets.

Mr Joyce had housing pressures and the cost of raising children on his mind with changes to Working for Families.

He says the changes are the first step in allowing Kiwi families to spend their own money and make the decisions that are best for them.

Family Tax Credit rates for children from birth to age 15 will be lifted to the same level as for children aged 16 to 18 - to $5303 a year for a first child and $4745 for each subsequent child.

The Accomodation Supplement will also rise by up to $80 a week for 136,000 households, though the average family can expect an additional $36 a week in their pockets.

Students will get up to $20 a week extra to help them cover their growing housing costs.

"The measures in this budget are expected to lift 20,000 households above the threshold for severe housing stress and reduce the number of children living in families receiving less than half the median income by around 50,000," Mr Joyce said.

He denied the April 1 introduction date was a bribe for voters to choose National in the September 23 election, saying the only other possible date was October 1 which could have looked worse and was not feasible because of changes to IRD's systems.

CHANGES TO THE TAX BRACKETS;

* 1-14,000 becomes 1-22,000, taxed at 10.5 per cent

* 14,001 to 48,000 becomes 22,001-52,000, taxed at 17.5 per cent

* 48,001-70,000 becomes 52,001-70,000, taxed at 30 per cent

* 70,001+ remains the same, taxed at 33 per cent.

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