Main benefits to increase in line with wages

 Main benefits to increase in line with wages
Social Development and Employment Minister Carmel Sepuloni announced today that main benefits will increase by 3.1 percent on 1 April, in line with the rise in the average wage. The Government announced changes to the annual adjustment of main benefits in Budget 2019, indexing main benefit increases to the average wage, rather than the Consumer Price Index (CPI). “This is the Government’s second annual adjustment based on increases in the average wage, making it fairer on low income families and helping reduce poverty amongst our most vulnerable,” said Carmel Sepuloni. “Around 385,000 families and individuals will be better off getting more than double the annual increase they’d have received using the old Consumer Price Index measure. For example, a couple with children could get $13.24 more Jobseeker Support a week from 1 April in line with the average wage increase. “Under the previous system indexed to the CPI increase of 1.15 percent, they would receive only $4.95. The changes aligned main benefit adjustments more closely with Superannuation which has been linked to average wage increases for decades. The 830,000 New Zealanders receiving Superannuation will also receive the same 3.1 percent increase on 1 April.  “Combined with this Government’s 1 April changes to income abatement thresholds, helping incentivise those who are working to remain in work, underlines our promise to help low income New Zealanders. “This is another step towards lifting wages and making our welfare system fairer so that people and families on benefits don’t fall further and further behind other New Zealanders.” Said Carmel Sepuloni.  ENDS Media Contacts:Mark Sleeman 021 859 524Kieran Meredith 021 817 570 Editor’s notes Over 1.3 million individuals are expected to receive increased financial assistance as a result of the Annual General Adjustment on 1 April 2021.Approximately:·       385,000 people getting a main benefit* will see their payments increase by 3.1%, in line with movement in the net average wage.·       830,000 people receiving New Zealand Superannuation and Veteran’s Pension will see their pension increase by 3.1 percent so that they remain at 66 % of the net average wage.·       60,000 students receiving Student Allowance will see increases of 1.15% indexed to the Consumers Price Index (less the cigarettes and tobacco subgroup).·       70,000 people receiving supplementary assistance only will see increases of 1.15% indexed to the Consumers Price Index (less the cigarettes and tobacco subgroup). Benefit rates adjustmentsThe following table shows the impact of the net average wage adjustment on selected main benefit rates.Increases in benefits may reduce other payments people receive, such as Temporary Additional Support and Childcare Assistance, but generally people will be better off because of these changes. Main benefit (net rates)Before 1 April 2021From 1 April 2021Amount of increaseJobseeker Support – single 25 years and over$250.74$258.50$7.76Jobseeker Support – couple (without children) total$401.20$413.62$12.42Jobseeker – couple with partner on benefit (with children) total$428.06$441.30$13.24Supported Living Payment – single 18 years and over$307.14$316.65$9.51Supported Living Payment – couple (without children) total$495.22$510.54$15.32Sole Parent Support$375.17$386.78$11.61Young Parent Payment – couple with partner not on benefit (with children) total$227.46$234.50$7.04 Changes to income abatement thresholdsThis is the amount a person can earn per week (before tax) before their benefit reduces. From 1 April 2021, the threshold will increase so that people can earn more from work each week before their benefit is affected.  BenefitBefore 1 April 2021From 1 April 2021Jobseeker Support$90$160New Zealand Superannuation with a non-qualifying partner$115$160Sole parents and Supported Living Payment$115$160 The second abatement threshold for Sole parents and Supported Living Payment will also increase – from $215 to $260. Main benefits include:Jobseeker Support (including student hardship rates)Sole Parent SupportSupported Living PaymentYouth Payment/Young Parent Payment Superannuation Benefit (Tax code M)Before 1 April 2021From 1 April 2021Single Living Along$423.83$436.94Couple who both qualify for NZ Super (total)$652.04$672.22 Note: There are a number of scenarios for NZ Super and Main Benefit.  A full list of rates will be published in the Gazette and will be communicated to clients by Work and Income. Increase over the last four years (includes $25 increase to Benefits announced in 2020): Main benefit (net rates)1 April 2017From 1 April 2021Amount of increaseJobseeker Support – single 25 years and over$212.45$258.50$46.0521.68%Jobseeker Support – couple (without children) total$354.06$413.62$59.5616.82%Jobseeker – couple with partner on benefit (with children) total$379.34$441.30$61.9616.33%Supported Living Payment – single 18 years and over$265.54$316.65$51.1119.25%Supported Living Payment – couple (without children) total$442.54$510.54$68.0015.37%Sole Parent Support$329.57$386.78$57.2117.36%Young Parent Payment – couple with partner not on benefit (with children) total$202.31$234.50$32.1915.91% 

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

Minister for Social Development & Employment, Minister for Disability Issues, Minister for ACC, and Minister for Arts, Culture and Heritage

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