NZ Government reveal $50 a week relief payment in fuel crisis response

Prime Minister Christopher Luxon and Finance Minister Nicola Willis have announced around 143,000 New Zealand families are set to receive an extra $50 per week as the Government moves to offset rising living costs driven by high fuel prices.

The boost comes via an increase to the in-work tax credit, with payments scheduled to begin from April 7 for weekly recipients, and April 14 for those paid fortnightly.

The temporary measure will remain in place for up to one year, or until the price of 91-octane petrol falls below $3 per litre for four consecutive weeks.

Households already receiving the in-work tax credit will have the additional $50 applied automatically.

Prime Minister Christopher Luxon said the Government had targeted working families because broader measures to reduce fuel prices across the board weren’t feasible.

According to information released alongside the announcement, the in-work tax credit is part of the Working for Families scheme. It’s available to households with dependent children that meet certain income thresholds, provided at least one parent is in paid employment and the family doesn’t rely on a benefit as its primary source of income.

The payment, which is currently $97.50 a week, goes to households with one child that earn less than $89,000, with two children that earn less than $112,000 and with three children that earn less than $135,000. Households with four or more children get an extra $15 a week for each child after the third.

The approximately 143,000 households receiving the tax credit will see that increase automatically. 

Nicola Willis said this policy will costs a maximum of $374 million.

“Funding the policy this way will not add to forecast debt or inflationary pressures. It is consistent with the Government’s fiscal strategy which seeks to balance the books and bend the debt curve down," Willis said.

“The Government is conscious that a careless response to this crisis could have long-lasting and painful consequences. We saw this in the aftermath of Covid, where excessive spending more than doubled debt and sent inflation soaring and mortgage rates skyrocketing. Kiwis are still grappling with the effects of that today."