United Future’s income sharing on agenda

Otago Daily Times 10 Aug 2010

Revenue Minister Peter Dunne in two weeks will finally introduce a Bill to Parliament calling for income sharing to be allowed between couples with children. The United Future leader first talked about the income splitting concept in 2002 but it was not included as part of his party’s confidence and supply agreement with the then Labour administration. In 2005, the confidence and supply agreement allowed Mr Dunne to prepare a policy paper on the concept and in 2008 National agreed United Future could develop the policy and National would support the Bill to its first reading.

Income sharing would allow couples with children under 18 to share income between them for tax purposes. Sharing would be voluntary and people could not be forced into it. Whether it was a benefit or not depended on family circumstances, Mr Dunne said. The minister estimated that the benefits for some families could be as high as $9000. “For many people it would be quite significant.” A qualifying family with one income of $60,000 would be eligible for an annual tax credit of $2500, if the legislation was passed, he said. A family with one partner earning $40,000 and another earning $20,000 would qualify for a tax credit of $1500. “The higher up you go, the better off you are.” A couple earning $140,000 between them – $100,000 and $40,000 – would be eligible for a credit of $1900 but a couple with one income earner on $140,000 would qualify for about $9000 in tax credits.