April 1 changes to help families get ahead   31 Mar 2015

Rt Hon John Key

Prime Minister
31 March 2015 Media Statement
April 1 changes to help families get ahead

Prime Minister John Key says Paid Parental Leave, the parental tax credit, the minimum wage and Superannuation will increase, while average ACC levies will fall, and more people will be helped in to home ownership from tomorrow.

“The National-led Government has focused on ensuring gains from our growing economy flow through to families and these measures demonstrate that.”

A range of Government policies come into force from April 1 including:

• The Government’s new HomeStart scheme to help around 90,000 Kiwis into their first home over the next five years.

• Paid Parental Leave to increase by two weeks to 16 weeks – and by another two weeks from 1 April next year.

• The parental tax credit to rise from $150 a week to $220 a week, and the entitlement increases from eight weeks to 10 weeks.

• Average ACC levies paid by employers and self-employed people will fall to 90 cents per $100 of liable earnings, down from 95 cents.

• New Zealand Superannuation to increase by another 2.07 per cent – meaning it has increased by 31 per cent since April 2008. This is double inflation in that time.

• The adult minimum wage to rise from 14.25 an hour to $14.75 an hour – a 3.5 per cent increase.

“These measures build on the policies we’ve implemented over the past seven years to help New Zealanders get ahead,” Mr Key says.

“Looking ahead, there are more policies designed to help families which take effect from 1 July. These include children under 13 having access to free GP visits and free prescriptions, and the average ACC levy for a private motor vehicle falling by around $135 a year.”

“The Government’s careful economic management is also helping New Zealand families in other ways. In 2014 we saw 80,000 new jobs created, and the average wage grew at 2.5 per cent compared with inflation of 0.8 per cent. The average wage is expected to increase by $6,500 to over $62,000 by the second half of 2018.”

“The Government’s responsible economic management is helping New Zealand families to get ahead.”

Background notes on policies

$218 million HomeStart package for first home buyers

On April 1, the Government is doubling support for first home buyers with the new HomeStart package coming into effect.

The package consists of the KiwiSaver HomeStart Grant, which doubles the support when buying a new home, and increases the house price limits available. It also enables larger KiwiSaver First Home Withdrawals by including the member’s tax credit.

This will help around 90,000 lower and middle income first home buyers into their home over the next five years.

http://www.beehive.govt.nz/release/218-million-homestart-package-first-home-buyers

Parental leave increases

On April 1, paid parental leave will increase from 14 weeks to 16 weeks. This will increase again on 1 April 2016, to 18 weeks. The parental tax credit for lower-income families will rise from $150 a week to $220 a week on April 1. The entitlement for this credit will increase from eight weeks to 10 weeks.

Increases to minimum and starting out wages

The adult minimum wage will increase from $14.25 to $14.75 on April 1. This is a 3.5 per cent increase, which will directly benefit 115,100 workers and increase wages throughout the economy by $60 million per year.

The starting out and training hourly wage will increase to $11.80 an hour. This is set at 80 per cent of the adult minimum wage.

Since the Government took office in 2008 the minimum wage has increased by $2.75.

Free doctors’ visits, prescriptions for under 13s

Free doctors’ visits and prescriptions for children aged under six will be extended to children aged under 13 from 1 July 2015.

Budget 2014 invested $90 million over three years so primary school-aged children can go to a doctor for free, any time of the day or night, and get their prescriptions free as well.

More than 400,000 primary school-aged children and their families are expected to benefit from this investment.

The free under 13s programme has now been extended further with ACC providing an additional $27.5 million over the next three years to include ACC injury-related visits.

ACC levies fall

The average ACC work levy, paid by employers and those self-employed, will fall on 1 April to 90 cents per $100 of liable earnings, down from 95 cents.

From 1 July the average ACC motor vehicle levy will fall by around $135 a year.

All up, New Zealanders will be better off by around $480 million through these levy cuts in 2015/16.

This will mean around $1.5 billion in annual ACC levy cuts have been returned to New Zealanders by the Government since 2012.

Minimum family tax credit to rise

On April 1, working families who are eligible for the minimum family tax credit will receive an after-tax income increase from $22,776 to $23,036 per year.

The increase takes increases in inflation into account.

Benefit and superannuation payment increases

Benefit and superannuation payments to over one million New Zealanders will increase on April 1, in line with inflation.

The Annual General Adjustment will see a 0.51 per cent increase to benefit rates, student allowances, student loan living costs, the foster care allowance and to rates of supplementary assistance.

Superannuation and Veteran’s pension payments will see an increase of 2.07 per cent. This is in line with the Government’s commitment to maintain the married couple rate at 66 per cent of the average wage.

Superannuation will have increased by 31 per cent since April 2008, more than double the rate of inflation since that time.

Reduction in airline passenger security charges for domestic passengers

Over the next two years, there will be a staged decrease in the airline passenger security charges for domestic passengers.

Charges are levied on airlines and passed on to passengers in the price of an airline ticket.

From this year, the charge will be reduced by another 11c, to $3.71. A final reduction will be made on 1 April, 2016.

This followed a review of the Aviation Security Service (Avsec). The review ensured that Avsec will continue to have the resources to safeguard the security of passengers.

http://www.beehive.govt.nz/release/passenger-security-charges-reduce

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