Finance Minister Nicola Willis announced in a statement today that superannuitants, working families, students, and beneficiaries will see increased support starting Wednesday, April 1. This comes as the ongoing Middle East conflict continues to strain New Zealanders financially.Â
Willis commented, “The global surge in fuel prices is severely impacting New Zealanders, causing significant cost-of-living challenges. While we cannot alleviate all difficulties, we are committed to implementing sensible, measured adjustments to provide some relief.”
The conflict began on February 28 when the United States and Israel launched airstrikes, resulting in the death of Iran’s supreme leader and other senior officials.Â
Iran’s retaliatory actions against US and Israeli targets, as well as civilian sites in Gulf Arab nations and shipping routes, have disrupted global trade in energy and other commodities, leading to fears of rising prices and economic recession, as reported by Reuters.
Currently, the price of 91 petrol and diesel in many parts of New Zealand exceeds $3 per litre, with some stations experiencing shortages, particularly on discount days.
The planned changes include:
• Increasing payments for approximately 960,000 recipients of NZ Superannuation and Veteran’s Pension. A married couple eligible for NZ Superannuation will see payments rise by more than $50 to $1708 per fortnight, marking an increase of over $180 since the 2023 election.
• An increase in the family tax credit for about 280,000 low-to-middle-income families. Eligible families will receive an additional $400 annually for one child, $720 for two children, and $1050 for three.
• A previously announced enhancement to the in-work tax credit will provide 143,000 working families with an extra $50 per week for up to a year, part of the government’s temporary support to mitigate fuel costs. An additional 14,000 families will also receive up to $50 weekly.
• Budget 2025 adjustments to the Working for Families abatement threshold, effective April 1, will give around 142,000 families an average boost of $14 per fortnight.
• Additional assistance for about 52,000 students. A single person over 24 receiving the Student Allowance will gain an extra $22 each fortnight.
• Enhanced support for more than 435,000 working-age beneficiaries. A single person over 25 on Jobseeker Support will receive an extra $22 fortnightly, while a couple with children will receive an additional $40 fortnightly, in addition to the family tax credit increase.
Willis noted these changes build upon existing cost-of-living support measures.Â
“Over 86,000 families have benefited from the FamilyBoost childcare tax credit, which will continue to assist eligible low-to-middle-income families with up to $120 per week for childcare costs. Furthermore, tax relief provided in July 2024 will continue to benefit approximately 1.9 million households by an average of $60 per week.”
Willis expressed concern about the impact of the Middle East conflict on fuel prices and its broader economic consequences for New Zealand, stating, “We acknowledge that these global events are likely to push New Zealand’s inflation higher and reduce growth more than previously anticipated.
“We recognize that large, untargeted government spending could exacerbate inflation and debt pressures. Our current focus is on making careful decisions to safeguard New Zealand’s economic future.”
KiwiSaver AdjustmentsÂ
April 1 also marks the implementation of changes to KiwiSaver, aimed at increasing savings for first home purchases and retirement.
“The default contribution rates for employees and employers will rise from 3 percent to 3.5 percent. This adjustment allows Kiwis opting to contribute more to have their contributions matched by employers, enhancing their savings potential,” Willis explained.
“We understand that not all Kiwis will be in a position to take advantage of this change immediately. Hence, we have maintained the option for KiwiSavers to revert to the current 3 percent contribution rate if they prefer.
“These KiwiSaver changes are designed to boost savings and provide greater financial security for Kiwis in the future.”
– Allied MediaÂ
