Government delivers on promise to working low-income families

 Government delivers on promise to working low-income families
From 1 April 2021, people getting a benefit will be able to earn more through work before their benefit payments are affected, Social Development and Employment Minister Carmel Sepuloni has announced. “Overall, around 82,900 low-income people and families will be better off by $18 a week on average,” says Carmel Sepuloni. “Of that figure, 29,500 individuals and families currently receiving a working-age benefit would be on average $29 a week better off. “Currently, a person on Jobseeker Support can earn up to $90 a week before their benefit starts to reduce with sole parents and people on Supported Living Payment being able to earn up to $115 a week. The changes mean people can earn up to $160 a week before their benefit starts to be affected. Of the 82,900 people and families affected, approximately 50,200 are families with children. “The 1 April increase in income abatement thresholds delivers on Labour’s election commitment to back families to get ahead, and is a key part of the Government’s five-point economic plan.  It is the second adjustment under this Government, and is the most substantive in over two decades. “Increasing the income abatement thresholds will make it more worthwhile for people to work, and improve the financial incentives to work part-time,” says Carmel Sepuloni. “It also means people facing reduced work hours, for example because of the impacts of COVID-19, may more readily access financial assistance while staying in their job.” “Part-time work is an important step for people moving from a benefit back into full-time work. It helps build and maintain skills, experience and self-confidence, and keeps them connected with the workplace.” “We want more people to enter the labour market, support our economy and to be better off for working. Growing people’s incomes and wages, particularly for low-income people, sits at the core of making the welfare system fairer. “The changes will help people and families get ahead, as we get through COVID-19, and rebuild New Zealand back stronger than ever,” Carmel Sepuloni said. Increasing the abatement thresholds from 1 April 2021 is a total investment of $393.98 million over five years. -ENDS- Contact: Kieran Meredith, 021 817 570 Notes to Editor: Abatement thresholds and rates from 1 April 2021: Sole parents, people on Supported Living Payment and people under 65 getting Veteran’s Pension: Payments will reduce by 30 cents in the dollar once they reach the $160 a week income abatement threshold, and 70 cents in the dollar once they reach a second threshold of $250. People getting Jobseeker Support and some other main benefits, or people who have a non-qualified partner included in their NZ Super or Veteran’s Pension: Payments will reduce by 70 cents in the dollar once they reach the $160 a week income abatement threshold. For couples where one partner gets NZ Super and the other partner gets Jobseeker Support or Supported Living Payment: Abatement applies only to the Jobseeker Support or Supported Living Payment; the benefit isabated at half the above rates; and NZ Super is not counted as combined income. BenefitCurrent1 April 2021Jobseeker Support (except for sole parents)Income over this threshold is abated at 70 cents in the dollar:$90$160Jobseeker Support – sole parentSole Parent SupportSupported Living PaymentVeteran’s Pension (under 65 years old)Income over this threshold is abated at 30 cents in the dollar:$115$160Income over this threshold is abated at 70 cents in the dollar:$215$250NZ Super/Veteran’s Pension with a non-qualifying partner included.Income over this threshold is abated at 70 cents in the dollar:$115$160 ·         Increasing the abatement thresholds to $160 and $250 per week is expected to benefit approximately 82,900 individuals and families by on average of $18 per week. Of these:-        around 29,500 individuals and families currently receiving a working-age benefit are expected to benefit from the change with an average weekly gain of $29;-       around 3,100 individuals and families receiving NZ Super are expected to benefit with an average weekly gain of $21;-       more than half (50,300) are non-beneficiaries receiving Accommodation Supplement, who will gain an average of $12 a week;-       around 50,200 are families with children; these changes are estimated to reduce child poverty by around 6,000 (+/- 3,000) on the AHC50 fixed line measure and 2,000 (+/- 3000) on the BHC50 measure in 2021/22. 

Kieran Meredith Press Secretary

Office of Hon Carmel Sepuloni

DDI: +64 4 817 8294 | Mobile: +64 21 817 570 | Email: Kieran.Meredith@parliament.govt.nz

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