Tax relief for breadwinners or caregivers? The designs of earned and child tax credits in five Anglo-American countries

Figures & data

Table 1.  Earned and child tax credits modeled (2004–05)

Country	Program	Features
Australia	Family Tax Benefit Part A	Assistance to households with dependent children; Base level of assistance abates only at high incomes; Abatement threshold for base rate increases with number of children; Additional annual supplement paid at year-end; No work test; Abates against joint income; Refundable tax rebate; Paid to nominated caregiver
	Family Tax Benefit Part B	Assistance to households largely dependent on a single income; Lone parents not subject to income test; In couples abates against lowest income earner's income only; Refundable tax rebate; Paid to nominated caregiver
Canada	Canada Child Tax Benefit: Basic Benefit	Assistance to households with dependent children; No work test; Abates against joint income; Refundable tax rebate; Paid to nominated caregiver
	Canada Child Tax Benefit: National Child Benefit Supplement	Assistance to households with dependent children; No work test; Abates against joint income; Refundable tax rebate; Paid to nominated caregiver
	BC Family Bonus	Assistance to households with dependent children; No work test; Abates against joint income; Refundable tax rebate; Paid to nominated caregiver
	BC Earned Income Benefit	Assistance to households with dependent children; Work tested; Abates against joint income; Refundable tax rebate; Paid to nominated caregiver
New Zealand	Family Support Tax Credit	Assistance to households with dependent children; Payments vary between eldest and additional children; No work test; Abates against joint income; Refundable tax rebate; Paid to primary caregiver
	Child Tax Credit	Assistance to working households with dependent children; Abates against joint income; Refundable tax rebate; Paid to primary caregiver
	Family Tax Credit	Ensures a minimum net income for working households with dependent children; Abates against joint income; Refundable tax rebate; Paid to primary caregiver
	Parental Tax Credit	Assistance to working households with a newly born dependent child; Abates against joint income; Refundable tax rebate; Paid to primary caregiver
United Kingdom	Working Tax Credit	Eligibility threshold 16 hours of work by one worker; Full-time premium paid for 30+ joint hours of work; Paid to person working 16 hours or more per week (couples with two eligible workers may elect who receives the payment)
	Child Tax Credit	Assistance to households with dependent children; No work test; Abates against joint income; Refundable tax rebate; Paid to primary caregiver
	Child Benefit	Universal transfer to all households with dependent children; Paid to primary caregiver
United States	Earned Income Tax Credit	Assistance to low income working households; Abates against joint income; Refundable tax rebate; Paid to primary caregiver (if appropriate); Where caregiving responsibilities shared equally in separated families paid to taxpayer with highest adjusted gross income (tie-breaker rule)
	Child Tax Credit	Assistance to households with dependent children and income over a threshold; Partly refundable; Paid to primary caregiver; Where caregiving responsibilities shared equally in separated families paid to taxpayer with highest adjusted gross income (tie-breaker rule)
	Wisconsin Earned Income Credit	Assistance to low income working households; Abates against joint income; Refundable tax rebate; Paid to primary caregiver; Where caregiving responsibilities shared equally in separated families paid to taxpayer with highest adjusted gross income (tie-breaker rule)
Source: Nolan 2005.

Figure 1. Earned and child tax credits for a lone parent earning US$10.00 per hour with two children (2004–05)

Figure 2. Earned and child tax credits for a secondary earner earning US$12.50 per hour with two children (2004–05)

Nolan , P. 2005 . “ Targeting families' assistance: evaluating family and employment tax credits in New Zealand's tax-benefit system ” . New Zealand : Victoria University of Wellington . Doctoral dissertation

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