Beneficiaries are set to receive an increase in benefits more in line with the rise of the minimum wage.
Main benefits will increase by over three per cent, instead of 1.66 per cent, on 1 April with the government’s decision to annually adjust benefit rates to increases in the average wage.
Around 310,000 families will be better off following this change says Social Development Minister Carmel Sepuloni.
The move to index main benefits to increases in the average wage is fairer for those needing help, she says.
“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 April 1, 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.”
Main benefits include, the emergency benefit, grandparented rates of domestic purpose benefit for solo parents and the widow’s benefit, jobseeker support (including student hardship rates), sole parent support, supported living payment and the youth payment or young parent payment.