Benefit settings rise in line with wages as of 1 AprilSocial Development
Main benefits will increase by over 3 percent, instead of 1.66 percent, on 1 April with the Government’s decision to annually adjust benefit rates to increases in the average wage.
The Minister for Social Development, Carmel Sepuloni, said that 310,000 families will be better off from this change and that the move to index main benefits to increases in the average wage was fairer for those needing help.
“This is the largest increase outside of one-off adjustments in nine years.
“We take a similar approach to adjusting Superannuation, so it’s fairer, more consistent, and will help reduce poverty amongst our most vulnerable.
“Adjusting rates to increases in the average wage ensures we share the benefits of a strengthening economy, and means those on benefits don’t fall further behind.
“Sole parents rate of benefit will increase by $10.48 per week because of the change. Under the previous system, they would only receive an increase of $5.64 per week.
“This is also the first of four years that income abatement thresholds will be increased in line with movement in the minimum wage, removing a disincentive to work.
“Simply put, if we are expecting people to become independent and find sustainable employment, discouraging them from taking additional work on offer simply doesn’t make sense. We’ve fixed that.
“So as of 1 April, these changes mean a sole parent will be able to earn $115 of other income per week before their benefit begins to reduce, instead of $100.
“These changes are an important step forward in helping New Zealanders out of the poverty trap. At Budget time I said that it is time for change. This Government is delivering.”
Over 1.2 million individuals are to receive increased financial assistance as a result of the Annual General Adjustment. This includes approximately:
- 800,000 people receiving New Zealand Superannuation and Veteran’s Pension will see their rate increase by just over 3 percent so that they remain at 66 per cent of the net average wage.
- 310,000 people on a main benefit will see their rate rise by 3.09%, in line with movement in the net average wage
Main benefits include:
- Emergency Benefit
- Grandparented rates of Domestic Purpose Benefit for solo parents and Widow’s Benefit (paid overseas under a Reciprocal Agreement)
- Jobseeker Support (including student hardship rates)
- Sole Parent Support
- Supported Living Payment
- Youth Payment/Young Parent Payment
Rates and thresholds of other assistance will increase by 1.66 percent, in line with movement in the Consumers Price Index (less the cigarettes and tobacco subgroup).
- 60,000 students receiving Student Allowance will see increases indexed to the Consumers Price Index.
- 70,000 people receiving supplementary assistance only will see increases indexed to the Consumers Price Index.
From the 1st of April, the increase in main benefits will be 3.09 per cent, which is nearly double with the CPI rate would have been at 1.66 per cent.
Using current calculations a sole parent could get an extra $10.48 a week, a single disabled person $8.44 extra a week, a Jobseeker beneficiary aged 25 or over $6.78 extra a week or, for a 20-24 year old Jobseeker beneficiary, an extra $5.63 a week.