Budget 2025 initiatives
Through Budget 2025, the Government is investing in initiatives that support families and whānau with children in poverty. The measures outlined below will have an impact on the incomes of eligible households and can be modelled for their effect on child poverty measures.
- Working for Families will be better targeted to low- and middle-income families with children. The family income threshold for Working for Families will be raised to $44,900 a year and the abatement rate will increase slightly to 27.5 per cent. Almost all families who receive Working for Families, and have incomes above the old threshold of $42,700, will receive more financial support each fortnight from the family tax credit and/or the in-work tax credit. The cost of these changes will be met by income testing the first year of Best Start in the same way the second and third years are currently tested, with payments reducing for families with annual income over $79,000.
- Outdated Accommodation Supplement boundaries will be adjusted in fast-growing parts of the country, to give around 4,000 people increased payments that better reflect their housing costs. At the same time, the minimum amount homeowners (excluding those receiving New Zealand Superannuation, a Veteran’s Pension or a Supported Living Payment) must pay towards their weekly housing costs, before receiving Accommodation Supplement, is being increased, to acknowledge the different circumstances of those who own their homes and those who rent.
Other Budget 2025 initiatives that could impact on child poverty or wellbeing, but are unable to be modelled, include:
- reducing family medical costs and ensuring better access to long-term medications, by increasing the prescribing duration limit from three months to twelve months
- improving early intervention support and resources for children with additional learning needs
- extending funding for community providers to source and distribute food through food hubs and foodbanks, and extending funding for KidsCan and KickStart Breakfast
- establishing the Social Investment Fund to purchase better outcomes for vulnerable New Zealanders, using strong data and evidence
- funding initiatives that will support parents to meet their children’s learning and development needs in their first 2,000 days, and
- reprioritising funding to deliver additional social housing places and affordable rentals, including additional affordable homes for whānau Māori, over the next four years.