Cost of living: Significant increases to Superannuation, benefits, student support

The Government has announced significant increases to Superannuation, main benefits and student supports as part of a "bread and butter support" package coming into effect on April 1.

It's expected to cost an additional $311 million, but the Government said it means about 1.4 million New Zealanders will "not go backwards" as most of the changes are aligned with increases in inflation.

The announcement comes on the same day StatsNZ revealed food prices rose 12 percent in the year to February, the highest annual increase since 1989. 

In 2019, the Government made changes so annual increases to main benefits are tied to increases in the average wage, which has traditionally risen faster than inflation. 

However, with inflation rising so quickly recently - it was 7.22 percent in the December quarter - Cabinet has this year agreed to also increase main benefits by the same. In comparison, the net average wage rose by 6.24 percent.

So how much more money is that? 

For a family on a Jobseeker Support benefit with children, they will see a $40.96 a week increase. A sole parent's Jobseeker Support benefit will jump $31.83.

Superannuation will also rise by the same percentage. This means a couple both aged over 65 will get $102.84 more every fortnight. A single pensioner living alone receives an extra $66.86.

There are also changes to Working for Families, including an extra $4 for Best Start Payments taking it to $69 per week, and an increase of $9 for the eldest child rate of Family Tax Credit, lifting it to $136 per week.

Tertiary students who receive a student allowance or student loan living costs will see a roughly $20 increase in each payment from April 1. 

The overall package is expected to benefit 880,000 people receiving Superannuation or the Veteran's Pension, 354,000 working-age beneficiaries, 52,000 students receiving Student Allowance and 74,000 people receiving supplementary assistance. 

"I know every little bit counts when making ends meet. In a cost of living crisis we can’t leave those on the lowest incomes and Government support behind," Social Development and Employment Minister Carmel Sepuloni said.

"The annual adjustment process and the extra one-off boost to main benefits further demonstrate the Government’s focus on the things that matter right now, like helping New Zealanders deal with the cost of living."

The changes announced on Monday come on top of the Government lifting the minimum wage from April to $22.70 per hour. There will also be increased income thresholds for the Childcare Subsidy as was revealed in November last year.