$2.4b boost for benefits and pensioners

Low-income families and pensioners will receive a major boost in weekly payments as the Government tries to soften the blow of coronavirus, and keep people spending.

Finance Minister Grant Robertson yesterday announced main benefits will rise by $25 a week, the Winter Energy Payment will double, and in-work tax credits will be expanded to cover families who lose work as Covid19 crushes the economy.

The cash infusion will cost the Government $2.8 billion; a portion of the massive $12.1b economic stimulus package hoped to combat the economic impact of Covid-19.

The sum total of the package means some families who lose work could expect $100 a week from the Government. The payments will increase automatically for those already receiving them. Robertson said the winter energy payment was an already established route to the back pocket of those most vulnerable to the crisis, seniors and lowincome families.

``The Winter Energy Payment supports our elderly, and I make no apologies for making sure that it will be easier for our elderly to heat their homes this winter. It also reaches other low-income New Zealanders,’’ he said.

The Winter Energy Payment, already provided to pensioners and people receiving welfare payments, will double to $40.91 a week for a single person and $63.64 a week for couples and families. The payments are issued between May and October, and will cost the Government $480 million for 2020. This was only a temporary measure.

The expanding of the in-work tax credit means all working families, who aren’t receiving a main benefit payment and fall below an income threshold, can expect to receive the credit regardless of how many hours they work.

The tax credit of $72.50 per week, or $3770 a year, has previously been received by sole parents working 20 hours or more a week, or couples working 30 hours a week. The threshold is set at families with one child earning up to $65,000 a year, and families with two children earning up to $84,000 a year. Robertson said this change would ensure that working families don’t lose the tax credit if their hours reduce as employers cut back. It will come at a cost of $32m a year. The $25 per week boost to main benefit levels will come on April 1, and will cost the Government $2.4b over the next four years. The rise will be permanent.

National Party leader Simon Bridges said the Government was putting ``money into the hands of beneficiaries faster than businesses who are doing it tough’’.

``National would have devoted more of the $12 billion package to urgent support for businesses in the next two to three months, to save jobs,’’ he said.

‘‘I make no apologies for making sure that it will be easier for our elderly to heat their homes this winter.’’

Grant Robertson Finance Minister