More than half of NZ families with kids better off

Child Poverty Reduction Social Development and Employment

Five years on from the Government’s Families Package, MSD research released today shows it has made a real difference to increasing incomes for New Zealanders which will help them through the global cost of living pressures.

“When we came into Government we made reducing child poverty a priority,” Minister for Child Poverty Reduction Jacinda Ardern said.

“We moved quickly to introduce a package of support to immediately lift incomes and support new parents.

“In the first year, around 330,000 families – more than half of all families with children in New Zealand – were on average $55 per week better off as a result of the Families Package.

“By 2021, regular Best Start payments were reaching 78,000 parents and caregivers with children under three years old. On top of this 1.2 million New Zealand adults are helped with their heating through winter, by the Winter Energy Payment.

“And weekly incomes after housing costs are now, on average, 43% higher in real terms than in 2018 for people supported by a main benefit – rising even faster than inflation.[i]

“This Government’s Families package;

  • Increased the Family Tax Credit, and Working for Families Abatement Threshold
  • Introduced the Best Start Payment to help in a child’s early years
  • Introduced the Winter Energy Payment
  • Increased Orphans Benefit, Unsupported Child Benefit and Foster Care Allowance
  • Increased Paid Parental Leave to 26 weeks
  • Reinstated the Independent Earner Tax Credit
  • Increased Accommodation Supplement and updated the regional breakdown

“We have not stopped there, since the announcement of the Families Package we have worked hard over our five years in Government to continuously increase incomes.  This includes;

  • Increasing Benefits to historic levels
  • Increasing the Minimum Wage to $21.20 per hour
  • Bought in our lunches in schools programme
  • Extended free doctors’ visits
  • Built more social housing than any Government since the 1970s
  • Removed sanctions which impact children the most
  • Raised Benefit Abatement thresholds
  • Extended ACC cover to birthing parents
  • Extended Childcare Subsidy to 54% of families with children based on their income

“We are committed to helping New Zealanders and their families through the global cost of living crisis and this research shows what we have delivered,” Jacinda Ardern said.

“Through the changes, started in the Families Package, child poverty statistics have trended down in all of the nine measures we monitor. That includes 21,900 fewer children experiencing material hardship and 66,500 fewer children living in poverty (on the after housing costs primary measure).[ii]

“Our changes have prepared us well for challenging economic times, and it is clear the value of our changes over time are more targeted and are having a greater impact than the proposed tax cuts by the opposition would have,” Jacinda Ardern said.

Social Development and Employment Minister Carmel Sepuloni said the research released by the Ministry of Social Development today tells a story of progress that the Government is building on to improve people’s lives. 

“Couples with children on a benefit are on average $243 better off per week than they were in 2017. This rose to $274 over the winter. And main benefit rates have increased by $65 to $87 per week, per adult since 2020.

“Many New Zealanders had not seen this kind of shift in income for decades, but as the research shows, there is more to do and we have not shied away from this.  

“We have also had a relentless focus on work with our Government supporting more people off Benefit and into work than any time since records began.  This will continue to be a focus for us as we move into 2023.

“I’m incredibly proud of what we have achieved, and I’m looking forward to continuing this work,” Carmel Sepuloni said.

[i] Since 2018, total benefit incomes have increased at a faster rate than inflation. From 2018, increases to main benefit payments compensated for rises in inflation and housing costs over time. Since 2018, inflation (excluding housing) increased by 12 percent, while total incomes across all family types grew by 59 percent on average (after housing costs). Overall, peoples’ total incomes after housing costs are, on average, 43 percent higher in real terms now than in 2018:

[ii] As reported by the Government Statistician in the most recently available data for the year ended June 2021, released in February 2022: Child poverty statistics: Year ended June 2021 | Stats NZ.