introduces tax and benefit changes which will happen in two stages on July 1st 1996, and July 1st 1997. The legislation now before parliament provides for both stages.

drops the tax rates. The 24c tax rate on income less than $30,875 will fall to 21.5c. The income level where the 33c tax rate starts will rise from $30,875 to $34,200. And, in July 1997, the 21.5c tax rate will fall again to 19.5c and the income level for the 33c tax rate will rise again, from $34,200 to $38,000.

increases Family Support payments by $2.50 a week for each child from July 1996, and by another $2.50 for each child after July 1997.

increases the Guaranteed Minimum Family Income by $6 a week from July 1996, and by another $6 a week after July 1997.

introduces a new Independent Family Tax Credit, giving many families up to $7.50 a week for each child from July 1996, and another $7.50 a week for each child after July 1997.

introduces a dual abatement regime to take effect on 1 April 1996.

for widows, domestic purposes and invalids beneficiaries, there will be an abatement rate of 30% for income between $80 and $180 per week, with 70% abatement for income that is more than $180 per week.

for all other beneficiaries, there is an abatement rate of 70% for income that is more than $80 a week.

extends work-testing from 1 April 1997 to those whose youngest child is over 14yrs of age to (a) Domestic Purposes Beneficiaries and Widows Beneficiaries, and (b) spouses of those on the Unemployment Benefit.

introduces mandatory interviews from 1 April 1997 to Widows Beneficiaries, Domestic Purposes Beneficiaries, and spouses of those on the Unemployment Benefit.

introduces a system of graduated reductions and loss of benefit for 13 weeks for non-compliance with the work-test or with mandatory interviews.

the existing 2-week and high income earner stand-downs are replaced by a minimum one week stand-down, and a 1-10 week stand-down depending on both the gross income in the 26 weeks before the benefit application, and the family circumstances. The income thresholds are more generous for applicants with dependents.

reduces the stand-down period from 26 to 13 weeks for voluntary unemployment or for dismissal for misconduct.

introduces a new method for calculating the stand-down period for new applicants for income-tested benefits.

makes changes to the `clean slate' provisions from April 1997

gives Social Welfare the power to direct beneficiaries, who have been over 13 weeks on a benefit, to participate in a Community Task Force Scheme.

delegates authority for administering some aspects of the work-test to the Department of Labour, and revises the review procedures relating to decisions made by the Department of Labour.

Independent Family Tax Credit
a new tax refund programme only available to working low-income families who are not beneficiaries or on ACC weekly compensation.

accommodation supplement
an extra benefit available to low-income people who are paying a major amount of their benefit on house or flat rentals or mortgages.

dual abatement regime
the amount a person pays back to the government from what they earn from working while they are also on the benefit. This is a dual regime because it is now set at different pay-back schedules for different types of beneficiaries.

work-testing
being able to demonstrate that you are available for work now. (see box for the many ways a person can fail this test)

mandatory interviews
a time when you have to go to Income Support Service or the NZ Employment Service and explain your present circumstances for entitlement to a benefit. These are also a time for staff to offer guidance about possible training, education and employment opportunities.

stand-downs
the period of time a person will have to wait for their benefit to start being paid, or a penalty time of non-payment for failing to follow the rules.

clean-slate provisions
good behaviour ways that a beneficiary can escape having their benefits reduced or cut off for not following the rules.

voluntary unemployment
choosing to leave a job for your own reasons, rather than being laid off or dismissed.