About 90,000 more New Zealanders will be eligible for legal aid, new Justice Minister Kiritapu Allan announced on Monday.
"Community law centres and the legal aid scheme are the key ways for providing free or low cost legal assistance to people who can not afford it," she said.
"The changes mean an extra 93,000 more people will be eligible for legal aid from January 2023."
The $149 million funding came from Budget 2022. It increases the income eligibility threshold by 15%, removes the $50 legal aid charge and scraps interest charged.
"Concerns have rightly been raised about the low eligibility threshold – for a single applicant this is currently just over half of what a fulltime worker on the minimum wage receives – the $50 user charge, debt repayment and interest on legal aid grants.
"This will improve access to legal assistance for low-income New Zealanders and reduce debts incurred as a result for seeking that assistance," Allan said.
"These changes mean real help for the people who need it most."
The debt repayment threshold will go up 16.5% and lawyers will get a 12% increase in their hourly rate from July 1.