The government has announced new tax thresholds that will save $10.77 a week for anyone earning more than $22,000 per annum.

From April 1, 2018, the lowest tax bracket will be shifted from $14,000 per annum to $22,000 per annum, with a tax rate of 10.5 per cent.

The second lowest tax bracket has also shifted up to $52,000 per annum, with a tax rate of 17.5 per cent. These are the earners who will take home almost $11 extra per week.

Those earning more than $52,000 per annum will take home an extra $20.39 per week, according to government calculations.

The highest tax rate remains at 33 per cent, for those earning more than $70,000 per annum.

Family Tax Credit rates for young children have been increased to the level of those for children aged 16 to 18, while increasing the abatement rate and decreasing the abatement threshold.

Accommodation Supplement maximum amounts have been increased, with updates to the Accommodation Supplement areas to reflect 2016 rents.

Weekly payments of the Accommodation Benefit for eligible Student Allowance recipients will also increase by up to $20.

The Independent Earner Tax Credit has also been discontinued. However, people who lose the Independent Earner Tax Credit will be compensated in full by the lifting of the lowest income tax threshold from $14,000 to $22,000, says Finance Minister Steven Joyce.

He says that as wages have risen over the last seven years, people on lower and middle incomes have been faced with higher marginal tax rates.

'The Budget 2017 Family Incomes Package will provide better rewards for hard work by adjusting the bottom two tax thresholds and lowering the marginal tax rates for low and middle income earners,” he says.

'At the same time it will start simplifying the tax and transfer system by removing the separate Independent Earner Tax Credit which is claimed during the year by less than one third of those eligible.

'These changes mean, for example, a couple with two children under 13 and one partner working earning $55,000 will gain $41 per week plus any increase to their Accommodation Supplement.”

The combined cost of the tax system changes – framed as the ‘Family Incomes Package' – will be $2 billion.

The Family Incomes Package Calculator is available here.