The unintended consequences of Working For Families

I have a friend who works as a personal assistant. She has one child and is a solo mum. She is also in receipt of Working for Families.

This was ticking along nicely until to day when she received a letter from Work and Income advising her that her income had gone up and that she was now unable to qualify for her Community Services Card. (don't worry I have scan of the letter)

She thought that this wasn't right and rang Work and Income. Their explanation was that Her Working For Families payment was income and thus she was now over the threshold for the Community Services Card.

But hang on a minute, the Working for Families website states that the payment is actually a tax credit, even Helen and Michael says so. They say so repeatedly ad nauseum, it is almost a mantra "Working for families Tax Credits

How then does a tax credit suddenly morph into income? Either it is a tax credit, you know getting your own money back or it is income, it can't be both. Work and Income think it is income.

I wonder how many other people are getting the slap from Work and Income over this? I bet it is thousands.

How on earth does Work and Income consider a tax credit, ie your own money that you paid in tax being given back to you, income? How come IRD doesn't agree with Working for families, because that was her next call to IRD and they have her correct income details and no mention of WFF payments as income, they are after all tax credits aren't they.

There is more to come on this I can assure you, but this is clear cut example of the difference between real tax cuts and welfare payments dressed up as tax credits.