Best Start Tax Credit: What It Is & Who Qualifies

If you've just had a baby or are planning to start a family, you might be wondering how to make ends meet during those early years. The Best Start tax credit is one of New Zealand's most valuable family support payments, designed to help parents and caregivers with the costs of raising a newborn. Whether you're earning a solid income or receiving a benefit, you could qualify for up to $73 per week to support your child's first three years of life.

What Is Best Start?

Best Start is a weekly payment from Inland Revenue (IR) that helps support families with young children^[1]. It's part of the Working for Families package and is one of the most accessible family support payments available in Aotearoa.

The key feature that makes Best Start unique is its income-free first year. During your child's first year of life (or from when your paid parental leave finishes, whichever is later), you'll receive the full Best Start payment regardless of how much your family earns^[1]. This means that even if you're a high earner, you'll get the same weekly amount as someone on a lower income during that crucial first 12 months.

After your child turns one, the payment becomes income-tested. This means your family income will affect how much you receive in years two and three^[1].

How Much Can You Get?

Best Start payments are straightforward:

• Year 1 (birth to first birthday): $73 per week, no matter your income^[1]
• Year 2 (first to second birthday): Up to $73 per week, reducing if your family income exceeds $79,000^[1]
• Year 3 (second to third birthday): Up to $73 per week, reducing if your family income exceeds $79,000^[1]

In annual terms, this means you could receive up to $3,838 per year during the first year, with potential reductions in years two and three based on your income^[1].

It's worth noting that IR rounds your instalments down to the nearest dollar, so if your payment calculates to $421.75, you'll receive $421^[1].

Who Can Get Best Start?

Eligibility Requirements

To qualify for Best Start, you need to meet these criteria:

• Be the primary caregiver of your child
• Your child was born on or after 1 April 2018^[1]
• Be an NZ citizen or resident, or care for a child who is a resident and present in New Zealand^[3]
• Be registered for Working for Families^[1]

Income Types That Qualify

One of the great things about Best Start is that your income type doesn't matter^[1]. You can qualify if you earn:

• A salary or wage
• Self-employed income
• A main benefit (such as the Jobseeker Support or Sole Parent Support)
• New Zealand superannuation
• A student allowance^[1]

All of these income types are included in your family income calculation, so IR will take them into account when working out your entitlement in years two and three^[1].

How Income Affects Your Payments

The Income Threshold

The income threshold for Best Start is $79,000 per year^[1]. This is important because:

• If your combined family income is $79,000 or less, you'll get the full $73 per week in years two and three^[1]
• If your family income is over $79,000, your payment reduces by a certain amount for every dollar you earn above that threshold^[1]

Real-World Example

Let's look at how this works in practice. The Faraj family has a newborn daughter, Azra. During Azra's first year (when her mum Samira is on paid parental leave), they receive the full $73 per week regardless of income.

When Azra turns one, the family's combined income is $83,500. Because this is over the $79,000 threshold, their Best Start payment reduces. The reduction applies to every dollar earned above $79,000—so in this case, $4,500 of their income affects their entitlement^[1].

This means they'll receive a reduced payment in year two, but they'll still get something to help support their growing family^[1].

How to Apply for Best Start

Easiest Option: Apply When You Register Your Baby

The simplest way to apply for Best Start is when you register your baby's birth^[3]. You can do this online through SmartStart, and you can apply for Best Start at the same time. This is the quickest route because everything is done in one go.

Alternative: Apply Separately with Inland Revenue

If you didn't apply when registering your baby, you can apply for Best Start at any time directly with IR^[1]. You might choose this option if you want to explore other Working for Families payments at the same time, such as the Family Tax Credit.

What Information You'll Need

To apply, have these details ready:

• Your IRD number
• Your name and contact details
• Your bank account details (if you're not already a Working for Families or Ministry of Social Development customer)
• Your citizenship or resident status
• Your partner's details (if you have one), including their IRD number and contact information
• Your child's name, birthdate, and IRD number^[3]

If your child is under 12 months old when you apply, you don't need to provide family income information. However, if you're applying for a child aged up to three years or other Working for Families payments, you'll need to complete the family income section^[3].

When Do Payments Start?

Best Start payments usually start about 3 weeks after your application is processed^[3]. Payments begin when your parental leave payments end (if you're receiving them), or from your child's birth if you're not on parental leave^[3].

Important: Best Start Doesn't Automatically Renew

Here's something crucial to remember: Best Start payments do not automatically continue year to year. You'll need to confirm your details with IR each year^[3].

IR will send you a letter asking you to confirm your details before your child's first and second birthdays (if you were receiving payments that year)^[3]. Make sure you respond promptly so there's no gap in your payments.

Changes Coming in 2026

If you're having a baby on or after 1 April 2026, there's an important change to know about. From that date, Best Start payments will be income-tested from when your child is born, rather than having a full first year of income-free payments^[5].

This means if your baby arrives after 1 April 2026, your family income will affect your Best Start entitlement from day one. Make sure to factor this in when planning your finances if you're expecting a baby later in the year.

Next Steps

If you're expecting a baby or have recently had one, here's what to do:

1. Register your baby's birth through SmartStart and apply for Best Start at the same time—this is the easiest option
2. Gather your information (IRD numbers, bank details, and your partner's details if applicable)
3. Check the Working for Families calculator to see what other payments you might qualify for alongside Best Start
4. Mark your calendar for when you need to confirm your details each year—don't let your payments lapse
5. Contact Inland Revenue if you have questions or didn't receive a confirmation letter when expected

Best Start is designed to give your whānau real financial support during those important early years. With up to $73 per week in year one, it's a valuable payment that most New Zealand families can access. The key is to apply early and remember to confirm your details each year so your payments keep coming.