Budget boosts families incomes over three years

Families with children earning between $25,000 to $45,000 a year will get an average income boost of around $100 a week by 2007, Finance Minister Michael Cullen's Budget revealed today.

The "Working for Families" package will see substantial rises in Family Support and other assistance payments weighted towards working families with more modest assistance for families on benefits.

Dr Cullen said the package was aimed at getting beneficiaries into work and reducing poverty.

The first boost will come this October with childcare assistance subsidies increased and extended to more families. Those receiving the Accommodation Supplement will also be able to earn more before it is reduced. The first major assistance for working families will come in April 2005 with the Government spending $503 million on increasing family incomes and "making work pay".

This will see a working family with two children earning around $40,000 get an income boost of $40 a week.

By 2007 the same family will see their income assistance rise to $114 a week and they will be eligible for other subsidies.

Between 2005 and 2007 there will be steady increases in income assistance and other subsidies, and in 2006 a new "in-work" payment will replace the Child Tax credit.

The number of families eligible for assistance increases and by 2007 even a household earning $80,000 a year with four children will get $25 a week in financial assistance.

Dr Cullen's plans will eventually cost $1.1 billion a year as it is phased in to assist 300,000 households by April 2007.

After 2007, Dr Cullen has put aside $60 million a year to ensure the payments do not get eroded by inflation.

The package will run alongside a benefit system revamp and an advertising campaign to ensure people get their entitlements.

- NZPA