Government announces new increases for family tax credit and newborn payments

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The government announced an increase in several family payments, in a speech by Jacinda Ardern at the Labor Party online conference.

In a series of policies that the government estimates will lift 6,000 children out of poverty, the Family Tax Credit, the Best Start Payment and the Orphan’s Allowance, the Unattended Child Allowance and the foster family allowance will all benefit from an increase.

The family tax credit, which is part of the Working for Families social assistance system, will be increased by $ 15 per week for the oldest child and $ 13 per week for subsequent children. This means that for low-income families, the full amount per child would be $ 127 per oldest child per week and $ 104 for each additional child.

The $ 42,700 abatement threshold – where the payment begins to be reduced as income increases – will remain, but the rate will be raised slightly from 25% to 27%.

Prime Minister Jacinda Ardern in Northland to support Covid-19 vaccination efforts earlier in the week.

Ricky Wilson / Stuff

Prime Minister Jacinda Ardern in Northland to support Covid-19 vaccination efforts earlier in the week.

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This payment was already expected to have a rise in inflation on April 1, 2022. This boost – which is expected to cost $ 272 million over the next four years, will be added to that.

“The family tax credit was supposed to increase inflation on April 1 of next year, but we’ve supplemented it so struggling families get the extra help they need. Best Start will also experience an increase in inflation on April 1, ”Jacinda Ardern said in a statement accompanying the announcement.

The Best Start payment, which is also part of the Working for Families system, is a payment made to parents of new babies and will be increased from $ 5 to $ 65 per week until the child is one year old. It was introduced during the first term of the Labor-led government and is open to all newborns, regardless of family income, up to the age of one. It can continue at some level up to age three for families earning less than $ 93,858 per year.

In addition, the Orphan Allowance, Unattended Child Allowance and Foster Family Allowance will all be increased by $ 5 per week.

Overall, the government expects the changes to help 346,000 families.

“The Covid-19 has been hard on families and has contributed to the increase in the cost of living. Increasing support for low and middle income families to help meet basic needs is the right thing to do, ”said Ardern.

“We want New Zealand to be the best place in the world to be a child. Ensuring that families are not left behind is essential to our response to Covid-19, ”she said.

Minister of Social Development Carmel Sepuloni.

ROBERT KITCHIN / Tips

Minister of Social Development Carmel Sepuloni.

The new changes come after benefits increased during the May budget from $ 32 to $ 55 per week, per adult, plus an additional $ 15 per week for families. This followed a $ 25 per week increase in the primary benefit in March 2020 as part of a Covid emergency support program just before New Zealand’s first lockdown.

The government says that “109,000 families and whānau with children will earn an average of $ 175 per week as a result of government changes to income support since 2017.”

“The government is committed to transforming the social protection system,” said Social Development Minister Carmel Sepuloni.

“Every change we make brings us closer to our goal of a system that ensures people have adequate incomes and living standards, are treated and can live with dignity, and are able to meaningfully participate in their communities.

Children's Commissioner Judge Frances Eivers.

ROBERT KITCHIN / Tips

Children’s Commissioner Judge Frances Eivers.

Judge Frances Eivers, Commissioner for Children, said while the increases were welcome, they were not enough.

“For families making an effort, even $ 20 a week is good news, especially given the hardship for mokopuna and their whānau due to the effect of Covid-19.”

“However, this level of increase in family income is not enough. It will take a lot more if we really want to make a real difference for mokopuna. “

She urged the government to dramatically increase family tax credit payments for every child in every low-income family.


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