$790m lift for struggling families

A $790 million package aimed at reducing hardship among children in New Zealand's lowest-income households is at the heart of the Government's Budget.

The package includes a $25 per week increase in benefit rates for families with children, more childcare support for low-income families, increased work obligations for sole parents on a benefit, and an increase in Working for Families payments to low-income families not on a benefit.


Bay of Plenty MP Todd Muller supports the $790million child poverty funding. Photo: File

Benefit rates for families with children will increase by $25 a week after tax, from April 1 next year. This is the first increase outside inflation adjustments since 1972.

A move Bay of Plenty MP Todd Muller endorses.

'I am proud to see such a strong focus on vulnerable groups in society in this budget”, says Todd.

'The 2014 election revealed how much some issues, such as child poverty, matter to Kiwis and this is a clear signal the Government is in touch and listening.”

Lower-income working families that are not on a benefit also get an increase in their Working for Families payments and there is more childcare support to help low-income parents in work.

The Government says the package strikes a balance that offers more support to low-income families with children, while ensuring there remains a strong incentive for parents to move from welfare to work.

Low-income working families earning $36,350 a year or less, before tax, will get $12.50 extra a week from Working for Families, and some very low-income families will get $24.50 extra.

Working families earning more than $36,350 will get extra from Working for Families but it will be less than $12.50 a week, with the exact amount dependent on their family income.

Some higher-income families earning more than $88,000 a year will get slightly less from Working for Families, with the average reduction being around $3 a week.

Social Development Minister Anne Tolley says the tax credit changes will benefit around 200,000 working families with 380,000 children.

Around 50,000 of those families earn $36,350 or less a year and will therefore get the full $12.50 a week increase.

Recognising that lower-income working parents need affordable childcare, the package also increases childcare subsidies for pre-schoolers and the OSCAR subsidy for out-of-school and school holiday programmes.

'From April next year, the Childcare Assistance rate for low-income families will increase from $4 an hour to $5 an hour for up to 50 hours of childcare a week per child. This will lower the cost of childcare for around 40,000 low-income working families, and reduce barriers for those parents moving off welfare and into work,” says Anne.

The child hardship package will cost $240 million a year once fully implemented and $790 million over the next four years.

Another $25 million will go to funding regional research institutes to show how best to develop our regions, similar to the recently released Toi Moana Bay of Plenty Regional Growth Study which showed a positive outlook for the Bay's sustained long-term growth.

'The Budget puts money where it is most needed while giving taxpayers value for money and responsibly manages the Government's books. New Zealand is doing well, and Budget 2015 will help it do even better,” says Todd.

Child Hardship Package, from April 1, 2016:

• Most sole parents, and partners of beneficiaries, will have to be available for part-time work once their youngest child turns three, rather than five as now.

• All beneficiaries with part-time work obligations will be expected to find work for 20 hours a week, rather than 15 hours a week as now.

• Benefit rates for families with children will rise by $25 a week after tax - the first time since 1972 that core benefit rates have been increased by more than inflation.

• Beneficiaries receiving Sole Parent Support will have to re-apply for their benefit every year – as people receiving Jobseeker Support already do.

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