What is the total cost of the increased in-work tax credit as a result of the fuel crisis since it was introduced on April 1, 2026, and how does this compare with any projected or modelled costs prior to introduction?

Answer

When I announced the temporary $50 per week increase in the in-work tax credit from 1 April 2026, I said that the policy was estimated to cost a one-off $373 million if it runs for the full year. Inland Revenue estimates that it has paid out an extra $95 million in weekly and fortnightly in-work tax credit payments for the five months from April to August 2026 as a result of the temporary increase. This is only a preliminary estimate and is not a good guide to the final cost which will not be known until after the tax year ends. This is for three reasons. First, the policy may not run for the full year. Second, weekly and fortnightly payments are paid as an advance based on a family's income estimate for the full tax year. A family's final entitlement is calculated following the end of the tax year, and it may differ from the amount paid out during the year. Third, many families will choose to receive their in-work tax credit as a lump sum at the end of the tax year.