$320 handout due today for 307,000 Vector customers

Hundreds of thousands of Auckland households are receiving a mainly tax-free financial boost of $320 each this weekend, as shareholders in an electricity dividend totalling $98 million.

The Auckland Energy Consumer Trust is making payments to about 307,000 households, businesses and other customers of power lines company Vector throughout Auckland and Manukau cities and the northern part of Papakura.

They will receive the payments regardless of which power retail company supplies them.

Trust chairman Warren Kyd said last night that 45 per cent of payouts would be directly credited into customers' bank accounts today.

Cheques should start arriving at the same time in the letterboxes of 43 per cent of beneficiaries who had not opted for other arrangements.

The remaining 12 per cent of customers had asked for their shares to be paid as deductions against future power bills.

As 75.1 per cent-owner of Vector, the trust was the main beneficiary of a 3.8 per cent increase in the company's dividend this year.

But Mr Kyd said the net payout of $320 remained the same as last year because it was being distributed to 2000 more electricity customers and the trust faced higher tax liabilities.

Despite a tax increase of more than $7 which the trust had to pay on behalf of each customer, he praised Vector's financial performance in difficult economic times, enabling his organisation to make a healthy contribution to stretched household budgets.

He said that although there would be a large number of cheques in circulation today, the trust had persuaded banks to tighten up measures to ensure that only the rightful recipients would be able to cash them.

Security had improved considerably since more than $46,000 of cheques were stolen from letterboxes in 2006.

"It's much tighter than it was - people who might be tempted to pick up somebody else's cheque from a letterbox might get an awful shock this year," Mr Kyd said.

The trust was required to pay $14 to the Inland Revenue Department this year on behalf each customer.

That is because changes in company tax rates mean Vector now pays the department only 30 per cent of its income, but a net 33 per cent must still be deducted before customers receive their shares.

The trust is responsible for deducting the difference, although customers earning below the income threshold for 33 per cent taxation will be eligible for a small tax refund, while those on a higher rate will have to pay a bit more.