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Social Security Act 2018

Administration - Payment of benefits, tax on benefits, debts and deductions - Tax on benefits

351: Status of amount for income tax paid by MSD

You could also call this:

“Money MSD pays for your tax counts as part of your benefit and income”

When the Ministry of Social Development (MSD) pays income tax to the Commissioner on your behalf, you need to know how this affects you. For the Social Security Act, this payment is treated as if it were a benefit payment made to you. This means it’s considered as money you received, even though you didn’t get it directly.

For tax purposes, this payment is treated as your income. Depending on which tax law applies, it might be called different things. If the Income Tax Act 1976 applies, it’s called your assessable income. If it’s the Income Tax Act 1994, it’s called your gross income. For the Income Tax Acts of 2004 and 2007, it’s simply called your income.

Remember, even though MSD paid this tax for you, it’s still counted as part of your income and benefits. This is important to know when you’re dealing with your taxes or social security matters.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6783844.

Topics:
Money and consumer rights > Taxes
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350: MSD may pay tax on main benefit other than by tax deduction from source deduction payment, or

“MSD can pay your benefit tax directly to Inland Revenue instead of deducting it from your payments”

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352: Recovery amount paid in excess of amount properly payable, or

“Getting back extra tax paid on your benefit”

Part 6 Administration
Payment of benefits, tax on benefits, debts and deductions: Tax on benefits

351Status of amount for income tax paid by MSD

  1. An amount for income tax paid by MSD to the Commissioner under section 350(2) must,—

  2. for the purposes of this Act, be considered to be a payment of a benefit, within the meaning of that term in Schedule 2, made on account of, and received by, the person; and
    1. for the purposes of—
      1. the Income Tax Act 1976, be considered to be assessable income of the person; or
        1. the Income Tax Act 1994, be considered to be gross income of the person; or
          1. the Income Tax Act 2004, be considered to be income of the person; or
            1. the Income Tax Act 2007, be considered to be income of the person.

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