In-work tax credit decision welcomed

Social Development and Employment Minister Paula Bennett has welcomed the decision in the Crown's favour in the Child Poverty Action Group's case against the in-work tax credit.

"This recognises that the government must be able to target help and resources to achieve its goals - in this case, ensuring that people will be better off financially in work than on a benefit," Ms Bennett said.

"I acknowledge that the Child Poverty Action Group's case has been driven by its concern for children in beneficiary households," she said. "Our government shares that concern, but we must ensure that the welfare system incentivises people into work, not long-term dependency. Ultimately, the best way we can help these children is for their parents to move from welfare into work."

The in-work tax credit is designed to encourage families off benefit and into work. It ensures that those in work are better off financially than they would be on a benefit.

The Child Poverty Action Group sought a declaration that certain provisions governing eligibility for the in-work tax credit were inconsistent with the right to freedom from discrimination under the New Zealand Bill of Rights Act 1990 and therefore in breach of the Human Rights Act 1993.

The Human Rights Review Tribunal has found that these provisions are not in breach of the Human Rights Act. It found that the practical benefits of the in-work tax credit outweigh any discriminatory effect and that accordingly the payments are not inconsistent with the right to freedom of discrimination in the New Zealand Bill of Rights Act.

"It is pleasing that this ruling clarifies that the in-work tax credit, which provides significant financial help to more than 155,000 New Zealand families, does not breach the Human Rights Act," Ms Bennett said.