Budget 2026

Budget 2026 sets out the Government’s spending priorities and savings initiatives at a time of global uncertainty and fiscal constraint.

MSD has received funding in key spending areas that support the Government’s programme of getting people into work and helping people move towards independence while making savings through invest-to-save initiatives and more targeting of support to those who need it.

The Government’s funding for MSD in Budget 2026:

• provides targeted support to help get sole parents into work
• helps ease the impact of the cost of living, including supporting community food infrastructure
• makes investments in services to help people that will also lead to future savings
• will help make housing support fairer, better targeted, and more focused on encouraging independence

Employment supports for sole parents – Invest to save

Investing in support for sole parents to gain sustainable employment and improve long-term wellbeing outcomes – expenditure of $93.3 million, to achieve net savings of $97.2 million over 4 years.

Emergency housing support services – Invest to save

Continuing to invest in emergency housing support services at a lower level to prevent people from needing emergency housing, support people while in emergency housing, and support people to exit emergency housing – expenditure of $22.4 million, to achieve net savings of $14.3 million over 3 years, with the second year of funding and relevant savings being held in contingency.

Continuing funding for Food Secure Communities and KickStart

Continuing to fund New Zealand’s food distribution infrastructure through Food Secure Communities and the KickStart Breakfast programme in schools – expenditure of $38.0 million over 4 years –reprioritised funding from 2025/26 of $7.0 million is also being used to continue funding for community food support and food security initiatives for 1 year.

Income charging – Savings from further policy decisions

Realising savings by moving all clients from annual assessments to weekly income charging and extending information sharing and income charging rules to some ACC payments – net saving of $52.4 million over 3 years.

Automated Decision-Making – Additional savings

Additional savings from the Budget 2025 initiative ‘Automated Decision-Making remediation’ due to an update to the expected reduction in receipt of Temporary Additional Support – saving of $54.5 million over 4 years.

Poutasi response – Strengthening safety nets to protect children

Supporting the delivery and implementation of recommendations made in the Dame Karen Poutasi review to improve the system of safety nets for preventing harm in the children’s system – expenditure of $90.3 million over 4 years (Votes Oranga Tamariki, Education and Health). A detailed announcement will be made after Budget 2026.

SuperGold Card – Official form of identification

Introducing a version of the SuperGold Card that can be used as official identification – expenditure of $36.4 million over 4 years. 

Pre-Budget initiative

On 21 May, the Minister for Housing and the Minister for Social Development and Employment, announced the Government’s plan for reforming the social housing system .

Central to the announcement was the Review of Social Housing, which sets out to:

• Refocus social housing onto those who face severe and persistent barriers to accessing private housing – this will mean redesigning the social housing needs assessment
• Improve sustainable flows through and out of social housing to independence, and
• Improve fairness and the financial incentives toward independence by reducing the gap between the cost of private and social housing

The review includes changes to the provision of social housing and changes to Income-Related Rent (IRR), Accommodation Supplement (AS) and Temporary Additional Support (TAS):

• IRR – increasing the minimum Income-related Rent contribution for social housing tenants and the client contribution for households in transitional and emergency housing from 25 to 30 percent of income. Net savings of $387.5 million over 4 years.

• AS – increasing the maximum weekly payment amounts for households by between $10 and $30 a week across all Accommodation Supplement Areas. This increase will be funded by reinvesting the savings from the changes to IRR. Expenditure of $374.3 million over 4 years.

• TAS – reducing the maximum rate of TAS from 30 percent to 25 percent of main benefit rates. This does not include clients on NZ Super or Veterans Pension. The TAS changes also include removing formula-assessed child support liability as an allowable cost. Savings of $195.6 million over 4 years.

The above changes will be effective from April 2027.