Raising a family is expensive, and we know that it’s tough right now with the rising cost of living. Labour’s number one priority is to support New Zealand families through these difficult global economic times.
That’s why Chris Hipkins and the team are focussed on practical ways to support Kiwi families with the cost of living without making inflation worse.
Labour has just announced the next steps in our plan to make everyday life more affordable for families – with further changes to Working For Families, including the largest ever boost to the In-Work Tax Credit which will support around 160,000 low and medium-income families.
Here are the details:
Increasing the In-Work Tax Credit by $25 from $72.50 to $97.50 per week from 1 April 2024 will deliver targeted meaningful cost of living support to around 160,000 low and medium-income families. These payments go to families who are working – helping them with the cost of raising kids and making sure that families are better off working than if they weren’t working.
Labour will also lift the Working for Families abatement threshold to $50,000 meaning 175,000 families will gain on average an extra $47 a week, before the end of our next term. This will ensure families can keep more of this support when their pay increases or they pick up extra hours at work.
The work that Labour has done since 2017 to increase the wages of New Zealanders has brought more families’ incomes closer or over the income thresholds at which some Working For Families tax credits begin to abate. So, this change will put a bit extra in parents’ pockets to help with costs like transport and childcare.
Together, these changes will see an estimated 175,000 households better off by around $50 a week on average over the next three years. These increases are in addition to the steps we’ve taken to make our welfare system fairer.
The previous Labour Government introduced Working for Families Tax Credits, which saw payment go out to families with dependent children aged 18 or under, to help meet the costs of raising a family.
Since taking office in 2017, we’ve consistently increased Working for Families to make everyday life more affordable for Kiwi families.
- As part of our Families Package in 2018, we increased the Family Tax Credit and introduced the Best Start Payment, dedicated to supporting parents with extra costs in a child’s first three years.
- We have expanded access to the in-work tax credit to ensure more families could receive this support.
- In 2022, we increased the Best Start payment in line with inflation and went further for the Family Tax Credit, with increases of almost $15 per week for eldest child and $13 per week for subsequent children. These changes meant 346,000 families are better off by an average of $20 per week, and an estimated 6,000 children were lifted out of poverty.
- This year, we again adjusted Working For Families tax credits in line with inflation, increasing the Family Tax Credit by $9 a week for the eldest child, and by $7 a week for subsequent children. Best Start lifted by $4 a week to $69 a week.
Working for Families provides crucial support to around 58% of New Zealand families with children, including more than 600,000 kids across the country. But we know that things are still tough right now for many whānau.
That’s why Chris Hipkins and Labour have a plan to take practical steps to reduce cost of living pressures and help families get ahead. Our Cost of Living Plan includes free doctor’s prescriptions, 20 hours free ECE for two year olds, free or half price public transport for children and young people and now GST off fruit and vegetables – and there’s more to come. You can find out more about our plan, here.
New Zealanders have a clear choice this election. Christopher Luxon and National will push reckless policies that will cut taxes for the wealthiest New Zealanders and cut support for everyone else. National will increase the cost of medicine, ECE and childcare, public transport and fruit and vege. Now is not the time to put Labour’s support for families at risk.
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