Beneficiaries to get additional $18 per week from April 1

New abatement thresholds to support 82,900 people

Social Development & Employment Minister Carmel Sepuloni (RNZ Picture by Dom Thomas)

New Zealanders receiving a benefit will be able to earn more from April 1, 2021, Social Development and Employment Minister Carmel Sepuloni has announced.

The move covers a total investment of $393.98 million over five years.

There are however some conditions and restrictions and we urge readers to understand the threshold conditions or seek more information from Work and Income website: www.workandincome.govt.nz

The Five-Point Plan

Ms Sepuloni said that about 82,900 low-income people and families will receive, on an average, an additional $18 a week. Of these about 29,500 individuals and families currently receiving a working-age benefit would get an additional $29 a week.

“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,” she said.

Ms Sepuloni said that the increase in income abatement thresholds is in line with the commitment made by the Labour Party as a part of its 2020 Election Campaign, which is also 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.

Improving financial benefits

“Increasing the income abatement thresholds will make it more worthwhile for people to work and improve the financial incentives to work part-time. 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,” she said.

According to Ms Sepuloni, 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,” she said.

Some Abatement thresholds details

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 is abated at half the above rates; and NZ Super is not counted as combined income.

• 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.

Source: Ministry of Social Development and Employment
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