Pensioners, students, children and parents, and those on main benefits will all see a boost to their income from next month, Prime Minister, Chris Hipkins said today.
“The package of bread and butter support we are announcing today will help people who are really feeling the bite from the rise in the cost of living,” Mr Hipkins said.
“In our first term of Government we indexed main benefits to the increases in the average wage as this has traditionally risen faster than inflation. It was a practical solution to ensure those being supported by the Government didn’t fall behind.”
However with global cost of living pressures, Cabinet has this year agreed to provide additional support to this group by increasing main benefits by 7.22% in line with inflation, he said.
Superannuation will rise by the same percentage on 1 April. This will see a couple who are both aged over 65 receive $102.84 more in total a fortnight and a single person living alone receive an extra $66.86 each payment.
“Alongside this, working families will see increases to Working for Families, including an extra $4 for Best Start Payments taking it to $69 per week and an increase of $9 for the eldest child rate of Family Tax Credit lifting it to $136 per week,” the Prime Minister confirmed.
More people will also be eligible for Childcare Assistance due to the increases to the income thresholds, he said.
“It follows our decisions to increase the minimum wage by $1.50 to $22.70 an hour from 1 April 2023, cutting the cost of petrol, and making public transport half price until the end of June – and permanently for Community Services Card holders and tertiary students.”
Tertiary students receiving student allowance or student loan living cost payments will also see around $20 extra each payment from 1 April.
The annual general adjustment to benefits will mean approximately 1.4 million New Zealanders will not go backwards, said Mr Hipkins.
This includes 880,000 people receiving New Zealand Superannuation and Veteran’s Pension, 354,000 working-age beneficiaries, 52,000 students receiving Student Allowance and 74,000 people receiving supplementary assistance.
“I know every little bits counts when making ends meet. In a cost of living crisis we can’t leave those on the lowest incomes and Government support behind,” said Social Development and Employment Minister, Carmel Sepuloni.
The CPI rose by 7.22% in the year to December 2022 while the net average wage, against which main benefits are indexed, rose by 6.24%. The extra boost to main benefits covers the 0.98 percentage point gap.
“For the working-age people receiving a main benefit, they will see an increase of between $19.81 and $46.20, depending on the type of benefit and whether they are single or a couple,” Minister Sepuloni said.
“Working families will also be helped with around 10,000 more children being covered by childcare assistance through the Childcare Subsidy (7,400) and the OSCAR subsidy (2,900).
“The annual adjustment process and the extra one-off boost to main benefits further demonstrate the Government’s focus on the things that matter right now, like helping New Zealanders deal with the cost of living,” Ms Sepuloni said.
All up the additional support above the Annual General Adjustment equates to an extra $311 million, this is on top of the $189m announced for the changes to Childcare Subsidy.