Policy changes and annual adjustments will increase financial support for more than 1 million Kiwis from mid-week, the government says.
In a statement this afternoon, Finance Minister Nicola Willis said superannuitants, working families, students and beneficiaries would get a boost from Wednesday, April 1, as the as conflict in the Middle East continued to impact Kiwi wallets.
“The global fuel price surge is hitting hard at home, causing a cost-of-living headache for many New Zealanders. While the government can’t afford to ease all the pain, we are determined to keep progressing sensible, measured changes that provide some relief,” she said.
The war began on February 28 this year after the United States and Israel launched airstrikes that killed Iran’s supreme leader and other top officials.
Iran’s response, striking US and Israeli targets in the region as well as civilian targets in Gulf Arab nations and shipping, has disrupted global trade in energy and other commodities, raising fears of rising prices and recession, Reuters has reported.
The price of 91 petrol and diesel fuel in most parts of New Zealand was well past $3 a litre, with some stations running dry especially on discount days.
The changes include:
• Around 960,000 Kiwis receiving NZ Superannuation and Veteran’s Pension will get increased payments. NZ Superannuation for a married couple who both qualify will lift more than $50 to $1708 a fortnight, an increase of over $180 since the 2023 election.
• About 280,000 low-to-middle-income families will receive an increase in the family tax credit. Eligible families with one child will receive an extra $400 a year, rising to $720 for families with two children and $1050 with three.
• As announced last week, an increase to the in-work tax credit will result in 143,000 working families receiving a further $50 boost per week for up to a year, as part of the government’s temporary, targeted support to help with fuel costs. A further 14,000 families will receive up to $50 per week.
• Budget 2025 changes to the Working for Families abatement threshold come into effect from April 1 and will support around 142,000 families with a boost of $14 per fortnight on average.
• About 52,000 students will receive additional assistance. A single person over 24 receiving the Student Allowance will gain an additional $22 a fortnight.
• More than 435,000 working age beneficiaries will get increased support. A single person over 25 years old on Jobseeker Support will receive an additional $22 a fortnight. A couple with children will receive an additional $40 a fortnight (on top of the family tax credit increase).
The changes from Wednesday build on existing cost-of-living support, Ms Willis said.
“Over 86,000 families have received the FamilyBoost childcare tax credit and FamilyBoost will continue to support eligible low-to-middle-income families with up to $120 per week towards their childcare costs. And tax relief delivered in July 2024 will continue to benefit around 1.9 million households by $60 a week on average.”
The minister said the government was “acutely conscious the conflict in the Middle East was causing pain for Kiwis at the pump, and is leading to increased costs for businesses, goods and services across our economy”.
“We have been upfront in acknowledging that the fall-out from these global events is likely to drive New Zealand’s inflation rate higher and our growth rate lower than previously forecast.
“We know that responding with large, untargeted government spending programmes could make things worse for Kiwis by adding even more pressure to inflation and debt. We are making careful choices in order to protect New Zealand’s economic future.”
Changes to KiwiSaver
April 1 also marks the start of changes to KiwiSaver to support people to save more for their first home and retirement.
“Default employee and employer contribution rates will increase from 3 per cent to 3.5 percent. This means Kiwis who choose to contribute more will be matched by their employers and able to grow their savings further, Ms Willis said.
“We recognise that many Kiwis will not feel able to make that choice right now. We have safeguarded their flexibility by ensuring KiwiSavers will be able to opt back down to the current 3 percent contribution rate, if they choose.
“These KiwiSaver changes are all about lifting savings and helping Kiwis become more financially secure in the longer run.”
– Allied Media