Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Tax credits paid in cash - Adjustment of net income for family scheme

MB 6: Treatment of distributions from retirement savings schemes

You could also call this:

“How retirement savings payments affect your eligibility for government support”

You need to know about how the law treats money you get from retirement savings schemes when it comes to working out your family scheme income. This is important for figuring out if you can get certain types of government help.

If you get money from a retirement savings scheme in a year, and some tax (called RSCT) was taken out when the money was put into the scheme, this rule applies to you. But it only counts if, when you get the money, you’re not old enough for NZ Super and you’re allowed to get money from the retirement scheme.

When this happens, the money you get from the retirement scheme is counted as income that you earned in that year. This matters because it’s used to work out your family scheme income, which can affect things like tax credits or other support you might get.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1635847.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Savings and retirement
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MB 7: Family scheme income of settlor of trust, or

“How your family income is calculated when you set up a trust”

Part M Tax credits paid in cash
Adjustment of net income for family scheme

MB 6Treatment of distributions from retirement savings schemes

  1. This section applies when—

  2. a person receives a distribution of a retirement scheme contribution from a retirement savings scheme in an income year; and
    1. RSCT has been withheld from the contribution; and
      1. at the time of the distribution, the person is—
        1. not eligible for New Zealand superannuation; and
          1. eligible for a distribution of a retirement scheme contribution from a retirement scheme contributor.

          2. For the purposes of calculating family scheme income, the distribution is assessable income of the person derived in the income year in which the distribution is made.

          Compare
          Notes
          • Section MB 6: added, on , by section 457 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).