Will the Government's April 1 changes give you more cash?

Numerous changes are coming into force from Friday to try and give some Kiwis extra cash amid what economists are calling an "extraordinary" rise in the cost of living.

The Government said the package would make a difference for families feeling the effects of inflation, Covid-19, supply chain issues and the war in Ukraine. But, it's being criticised by National for not doing enough for middle-income Kiwis and by anti-poverty groups as inadequate.

The minimum wage for adults climbs from $20 to $21.20 per hour. Meanwhile, training or starting-out wages are being upped from $16 to $16.96 per hour.

For adults working 40-hour weeks on minimum wage, that will mean an extra $48 per week or $2496 more per year.

It forms part of Labour's 2020 election promise that it would continue to lift the minimum wage.

Workplace Relations Minister Michael Wood said in February, when the new minimum wage rate was announced, that the changes would benefit about 300,000 workers. The Council of Trade Unions said at the time it welcomed the increase but was disappointed that the Government had not matched the living wage.

National leader Christopher Luxon criticised the rise on Friday. He said the higher minimum wage barely covered the growing cost of living.

The 6% rise in the wage is just slightly above the rate of inflation in the year to the December 2021 quarter, which hit 5.9% - the largest movement in three decades.

The Living Wage Movement also announced on Friday the living wage will rise from $22.75 to $23.65 an hour from September 1. The announcement of the new rate in April gives employers time to make adjustments by September.

According to the Government, a boost to Working For Families will result in about 60% of families getting an extra $20 a week on average.

That's because of Family Tax Credit rises, a change in the abatement rate for the Family Tax Credit from 25% to 27%, an additional $5 to Best Start payments to $65 a week to help families caring for babies, and an increase to the Minimum Family Tax Credit threshold.

Luxon said the Government was offering "no consolation" for middle-income households, which he called the "squeezed middle".

“A family with two kids on an average household income of $110,000 will get absolutely nothing out of this package as they don’t qualify for Working for Families entitlements.

"Under National’s proposal to inflation-adjust income tax brackets, they would qualify for a $1600 income boost [annually]."

In response to questions about the topic from National's finance spokesperson Nicola Willis on Thursday, Finance Minister Grant Robertson said the April 1 changes focused on people with low and middle incomes "who deserve a boost from the Government [and] denied for many years by National Governments".

Robertson said the figure of $110,000 from Stats NZ that Willis used varied "depending on the day or depending on the month that is used".

Willis said, even with Working For Families increasing, it wouldn't be enough to meet the forecast climb in the cost of living. ASB estimated high inflation and rising interest rates will cost households an additional $150 a week on average.

This was echoed by the Child Poverty Action Group, which said the increase was "little more than an overdue inflation catch-up" and "substantial improvements" were needed to lift families out of poverty. It wanted the Government to index payment rates to wages annually and decrease abatement rates.

The second tranche of benefit increases announced in last year's budget has kicked in. It brings the total rise in benefit rates since July 2021 to between $32 to $55 per adult per week.

The full details of the April 1 changes can be found here.

Prime Minister Jacinda Ardern and Minister for Social Development Carmel Sepuloni said during Budget 2021 that the April increases, as well as July's $20 lift in all benefit rates, would help at least 19,000 children out of poverty.

ACT's social development spokesperson Karen Chhour accused the Government of "making it easier to stay on welfare" while not having the policies to grow the economy.

However, the Fairer Future collaboration said benefit boosts will still leave families "locked in poverty". That's after the organisation's research found some families will still face shortfalls of up to $300 a week after main benefits go up.

As announced in last year's Budget, superannuation payments are increasing by $52 a fortnight for a single person and $80 for a couple.

Ardern said the 855,000 superannuitants would benefit from the changes.

According to the Ministry of Social Development, that means a single person living alone would receive $462.94 a week if they used the tax code 'M'. For couples using the same tax code, they would get $712.22 a week.

From Friday until June 30, the Government is giving local councils funds to halve the price of public transport fares for most routes. Robertson had hinted Budget 2022 would also provide more funding for public transport.

The reduction in public transport fares was included in the Government's announcement in March that it would reduce fuel taxes for three months as the price at the pump skyrocketed.