Section MD 9 — Income Tax Act 2007: Fifth requirement: full-time earner

MD 9 Fifth requirement: full-time earner Normally full-time earner (1) The fifth requirement for an entitlement to an in-work tax credit is that either or both the person referred to in section MD 4 and their spouse, civil union partner, or de facto partner, is normally a full-time earner (the earner ). Also, the earner must–– (a) derive income as set out in subsections (2) and (3) as a full-time earner or derive an amount of compensation described in subsection (4); or (b) if they are a full-time earner in relation to a close company, be a major shareholder in the close company, and the company must derive gross income in the income year. Income (2) The income referred to in subsection (1)(a) is— (a) a PAYE income payment that is— (i) not excluded under subsection (3), although it does not matter if the person also derives income of the type described in subsection (3); and (ii) not a benefit or allowance described in section MD 8 ; or (b) income to which section RD 3(2) to (4) (PAYE income payments) applies; or (c) income from a business carried on for profit; or (d) an amount paid or benefit provided— (i) by a person (the claimant ), who receives a personal service rehabilitation payment from which an amount of tax has been withheld at the rate specified in schedule 4, part I (Rates of tax for schedular payments) or under section RD 18 (Schedular payments without notification); and (ii) to another person for providing to the claimant a key aspect of social rehabilitation referred to in paragraph (c) of the definition of personal service rehabilitation payment in section YA 1 (Definitions). Exclusions from income (3) The following PAYE income payments are excluded from income under subsection (2): (a) a payment referred to in paragraphs (a) to (c) of the definition of accident compensation earnings-related payment : (b) a PAYE income payment referred to in section RD 5(6)(a) (Salary or wages), other than a parental leave payment referred to in section CF 1 (Benefits, pensions, compensation, and government grants): (c) a PAYE income payment referred to in section RD 5(6)(bb), (bc), or (bd) : (d) a schedular payment that is a contract payment for a contract activity or service of a non-resident contractor: (e) an amount paid as a result of incapacity, suffered before 1 January 2006, due to personal injury by accident within the meaning of section 26 of the Accident Compensation Act 2001. Compensation payments for personal injury (4) A person meets the fifth requirement if— (a) they receive a child tax credit for an entitlement period ending on 31 March 2006; and (b) on or after 1 January 2006, they or their spouse, civil union partner, or de facto partner suffers an incapacity due to personal injury by accident within the meaning of section 26 of the Accident Compensation Act 2001; and (c) weekly compensation within the meaning of section 6 of the Accident Compensation Act 2001, is or will be paid for the incapacity; and (d) the person or their spouse, civil union partner, or de facto partner would have met the fifth requirement in deriving income as a full-time earner under subsection (1)(a) and been eligible for the tax credit calculated using the formula in section MD 10 at the time of the incapacity had this section come into force before the date of the incapacity. Absence from work due to birth of child (5) Despite subsection (1), a person also meets the fifth requirement if they are normally a full-time earner as described in subsection (1)(a) but, in a 1-week period, they do not work, or work less than, the number of hours required to be a full-time earner because of the birth of a child. However, this subsection applies only if the person is entitled to receive the parental tax credit for the child. Defined in this Act: amount , business , child , child tax credit , civil union partner , close company , contract activity or service , contract payment , de facto partner , entitlement period , full-time earner , income , income from employment , income year , in-work tax credit , major shareholder , non-resident contractor , parental tax credit , pay , PAYE income payment , schedular payment , spouse , tax credit , Compare: 2004 No 35 s KD 2AAA(1)(d), (5)–(8) Section MD 9(1) heading: replaced (with effect on 1 April 2011), on 2 November 2012, by section 126(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section MD 9(1): replaced (with effect on 1 April 2011), on 2 November 2012, by section 126(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section MD 9(1): amended (with effect on 1 April 2008), on 2 November 2012, by section 126(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section MD 9(2): substituted (with effect on 1 April 2008), on 6 October 2009, by section 360(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section MD 9(2)(c): amended (with effect on 1 July 2008), on 6 October 2009, by section 360(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section MD 9(2)(d): added (with effect on 1 July 2008), on 6 October 2009, by section 360(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section MD 9(3): substituted (with effect on 1 April 2008), on 6 October 2009, by section 360(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section MD 9(3)(c): amended (with effect on 5 January 2010), on 29 August 2011, by section 109 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section MD 9(3)(e): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010, No 130). Section MD 9(4)(b): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010, No 130). Section MD 9(4)(c): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010, No 130). Section MD 9 list of defined terms close company : inserted (with effect on 1 April 2011), on 2 November 2012, by section 126(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section MD 9 list of defined terms income year : inserted (with effect on 1 April 2011), on 2 November 2012, by section 126(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section MD 9 list of defined terms in-work payment : repealed, on 1 April 2008, by section 474(2)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section MD 9 list of defined terms in-work tax credit : inserted, on 1 April 2008, by section 474(2)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section MD 9 list of defined terms major shareholder : inserted (with effect on 1 April 2011), on 2 November 2012, by section 126(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).