A poverty advocacy group says today's benefit increases are simply an inflation catch-up and don't meet the skyrocketing cost of living.
From April 1, benefit rates increase by between $20 and $42 per adult per week compared to July last year, while the minimum wage rises from $20 per hour to $21.20, and Working for Families tax credits are bumped up too.
Then in May, the Winter Energy Payment returns until October - $20.46 a week for eligible single people with no dependents and $31.82 a week for couples and people with dependent children.
The benefit boost comes from the Government's Budget in 2021 - a $3.3 billion package. The Government already increased the benefit by $25 a week in 2020.
The increases come against the backdrop of three-decade high 6 percent inflation, sparked by a mix of COVID-19 supply-chain constraints, Government stimulus-spurred consumer spending and Russia's invasion of Ukraine.
But the Child Poverty Action Group says the changes don't go far enough.
"It is actually an inflation catch-up and reflects that Working for Families hasn't been adjusted since 2018 so it's a bit of a Cinderella in terms of the welfare system," economic spokesperson Susan St John told AM on Friday.
St John said while benefits and superannuation are increased annually to wages, Working for Families is only increased when inflation has accumulated to certain levels, which means low-income families are no better off with these increases than they were in 2018.
"It only reflects, in this case, an inflation adjustment up to September last year so it doesn't reflect the spike in living costs we've seen in the last 6 months.
"They are certainly much better off with this increase than without it but all it is going to do is put them back to where they were in 2018 and it doesn't deal with the fundamental problems that are wrong with Working for Families."
St John said a review of Working for Families is desperately needed because parents who are working only part-time are punished - even if that's the most work they can do.
She said a solo parent working part-time won't get the full benefits of the package.
"Part of Working for Families is carved off and only given to the 'deserving poor' - the ones that are actually not in a benefit of any kind. So if [a parent] is working part-time on a part benefit they won't qualify for what in inflation-adjusted terms would be $82 a week.
"Now we know that overall these changes announced today will mean on average for a family $20 extra per week but $82 would make a significant difference if [the parent] were entitled to that."
St John said all low-income families should be eligible for the full package.
"The irony is that it doesn't work as a work incentive at all because there they are with a part-time job, working all the hours they can so in what sense does that operate as a work incentive."
Prime Minister Jacinda Ardern acknowledged there is no silver bullet to solve the cost of living crisis, but said the Government is working hard to reduce costs on families.
"There's no silver bullet that will fix the current situation, which is why this Government is being responsive by implementing a range of changes to reduce costs on families who need it most," said Prime Minister Jacinda Ardern.
"Just as the Government supported New Zealand families through COVID-19 we will support them again through the economic response. So in addition to increasing financial support for families, we are also committed to getting to the source of the problem, including the lack of competition in our supermarkets."
The Ministry of Social Development estimates that, compared to 2017, 364,000 beneficiaries will be better off with the increase by on average $109 per week, increasing to $133 per week during the 2022 winter period.
It's also estimated that 109,000 beneficiaries with children will be better off by an average of $175 per week, increasing to $207 per week during the 2022 winter period.
The Government also announced earlier this month that $0.25 per litre of fuel will be slashed from petrol taxes and public transport costs will be halved for an initial three months to help ease the financial pressure at the pump.
Here's how much incomes are up
- Jobseeker support for sole parents is up 8 percent - $440.96 a week compared to $406.78
- Jobseeker support for singles 25 and over is up 13 percent - $315.00 a week compared to $278.50
- Jobseeker support for couple with partner on benefit, with children is up 18 percent - $566.00 a week compared to $481.30
- Youth payment for 16-17 year olds is up 14 percent - $274.37 a week compared to $239.70
- Young sole parent for 16-17 year olds is up 8 percent - $440.96 a week compared to $406.78
- Orphan's benefit / Unsupported child benefit is up 26 percent for under 5s - $254.95 a week compared to $203.03
- Family Tax Credit for eldest child is up 13 percent - $127.73 a week compared to $113.04
- Family Tax Credit for subsequent child is up 14 percent - $104.08 compared to $91.25
- Best Start Tax Credit for newborns is up 9 percent - $65.15 a week compared to $60.00
- Superannuation payment for singles increases fortnightly from $1013.28 to $1076.48.
