260,000 Kiwi families better off from Friday

29 March 2005
For Immediate Release

Hon Steve Maharey
Minister for Social Development and Employment
Minister of Youth Affairs

Thousands of families with children will be entitled to extra assistance when the next phase of Working for Families kicks in on 1 April, Social Development and Employment Minister Steve Maharey said today.
From this Friday, 260,000 families – more than half of all New Zealand families – will be entitled to extra money for living costs, housing and childcare.
The changes will see an average increase of $100 a week in support available to families with children in the $25-45,000 income band by 2007.
Steve Maharey says the 1 April changes are the biggest boost yet to Working for Families and will improve the lives of ordinary New Zealand families with children.
"More than 88,000 New Zealanders have already benefited from Working for Families. The 1 April changes will ensure all New Zealand families with children have a decent standard of living by targeting assistance to families that need it the most."

Key changes from 1 April are:

• Family Support will increase by $25 a week for the first child and $15 a week for each additional child
• The maximum Accommodation Supplement payment rates will increase for areas with higher housing costs
• Foster Care Allowance, Unsupported Childs Benefit and Orphans Benefit will all increase by $15 per child.

"Working for Families provides targeted increases to the weekly incomes of families with children that could never be achieved through tax cuts.
"For example a two-parent single-income family with four children earning $55,000 will gain an extra $150 per week from Working for Families by 2007. Tax rates would need to reduce to 9-and-a-half cents in the dollar to boost their income by the same level.
"A two-parent family with two children earning $37,440 will gain an extra $160 per week from Working for Families by the time it's fully implemented in 2007, but don't pay enough tax for tax cuts to deliver the equivalent benefit.
"Working for Families builds on the work this government has done since 1999 to improve the lives of New Zealand families, including paid parental leave, lifting the minimum wage and income related rents."
Contact: Dan Lambert, Press Secretary, (04) 471 9154 or (021) 270 9115.

 

How Working for Families will benefit New Zealand families
The following scenarios show how Working for Families will benefit low to middle income families with children.
The amount of extra money available to families will depend on their income level, the number of children they have and associated costs such as childcare and accommodation.
The amounts include increases gained from the 1 October 2004 changes.
Family 1:
Couple with two children, living in Oxford, near Christchurch. Work 60 hours a week between them, earning $37,440 a year before tax. Pay $120 a week in rent and $69 in childcare costs.

 

Family 1:
Couple with two children, living in Oxford, near Christchurch. Work 60 hours a week between them, earning $37,440 a year before tax. Pay $120 a week in rent and $69 in childcare costs.

 

	Better off by:
1 April 2005	$82 a week
1 April 2006	$142 a week
1 April 2007	$162 a week

 

Family 2:
Three children aged 5, 9 and 12 years living in Onehunga, Auckland. Income $52,000 before tax. Mortgage of $385 a week.
Better off by:

 

	Better off by:
1 April 2005	$99 a week
1 April 2006	$139 a week
1 April 2007	$169 a week

 

Family 3:
Sole parent with four-year-old child living in Lynfield, Auckland. Receives Domestic Purposes Benefit and works 30 hours a week for $11 an hour before tax. Pays $225 a week in rent and $115.50 in childcare costs.

 

	Better off by:
1 April 2005	$91 a week
1 April 2006	$130 a week (Financially better off leaving work and taking up the new in-work payment)
1 April 2007	$147 a week