Peter Dunne

Wellington, Aug 30 NZPA - The Government is looking at changing the rules around social assistance so people who don't need help don't get it, Revenue Minister Peter Dunne says.

He has issued a tax policy issues paper and wants feedback on suggested changes.

Mr Dunne said the paper followed the Government's announcement in the budget that it would reform tax rules around how family income is defined for entitlement to Working for Families, student allowances and community services cards.

"Basically these schemes are intended to help low and middle-income families," he said.

"People should not be getting help that they do not need."

Mr Dunne said people could receive quite large amounts of income through a trust and yet still qualify for Working for Families tax credits, and that was clearly not fair.

To address those issues, the paper suggests broadening the definition of family scheme income, which is used to determine entitlements to Working for Families tax credits and other programmes.

Mr Dunne said the broader scope of the definition would include income from trusts, some fringe benefits, passive income of children such as interest or dividends over $1000 a year and income of non-resident spouses.

Any changes coming from the consultation process would be added to a tax bill currently before Parliament.