30 May 2017

VIDEO: Andrew Little on the 'teenagers tax'

12:23 pm on 30 May 2017

Families with teenagers could be left worse off as a result of the Budget, the Labour Party says.

Leader Andrew Little told Morning Report more than 6000 families with older teenagers face losing more in Working for Families payments than they gain in tax cuts.

Watch Andrew Little speaking to Morning Report's Susie Ferguson:

"People with teenagers in the 13-to-15 age bracket are better off, because there's more provision for them," Mr Little said.

"The 16-to-18 year olds, the figure hasn't changed from now to 1 April next year... With higher abatement rates and the lower threshold, actually those families are worse off as a result."

The party's calculations are based on the tax and Working for Families changes - and don't include the effect of accommodation supplement rises.

Finance Minister Steven Joyce acknowledged some families would lose out as a result of changes to Working for Families as the government made clear at the time of the Budget.

He said 6000 families would lose less than $3 a week and 200 would lose more than $3 a week.

"We were ... clear about that at the time, and there's a transition fund available for those that do lose."

Mr Joyce said Labour was trying to pick apart separate parts of the package, rather than looking at the total benefits it would deliver, particularly through the boost to the accommodation supplement.

In the 25 May Budget, the government announced a rise in the Working for Families tax credit rates for children under 16 years.

But the point where tax credits start reducing would kick in at a lower income level - $35,000 compared to $36,500 previously.

The accommodation supplement will go up by an average $36 per week, and more towns and suburbs will be classified as locations which attract higher payments.

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