About 140,000 families to receive $50 a week to help with high fuel prices

About 140,000 families with children will receive an extra $50 per week through a boost to the In-Work Tax Credit as the Government seeks to provide some relief amid increasing fuel prices. Prime Minister Christopher Luxon and Finance Minister Nicola Willis, who outlined the support package at Parliament today, admit that people ineligible for the payment will be disappointed but maintain it is a “responsible” decision that avoids hiking inflation. The increase would begin from April 7 and be paid weekly or fortnightly depending on when people were paid. About 143,000 families would receive it, as well as about 14,000 families who received the tax credit at an abated rate. Beneficiaries and superannuitants wouldn’t receive the boost, the Government arguing their payments would be adjusted from April 1 as per normal. The In-Work Tax Credit (IWTC) is a payment to families with dependent children where at least one parent is in paid employment and neither parent receives a main benefit from Work and Income. In the current tax year, 2025/26, the cut-off for receiving the tax credit is around $89,000 of annual family income for a family with one child, $112,000 for a family with two children and $135,000 for a family with three children. The added payment would last for one year or until the price of 91-octane petrol drops below $3 a litre for four consecutive weeks. It was estimated to cost $373 million for the year. Willis has promised the cost would be met within the Government’s operating allowance. The Government will facilitate the weekly payment through an amendment to the Taxation Bill currently before Parliament. Over the weekend, petrol hit $4 a litre in some Auckland suburbs, with an average of $3.30 a litre for unleaded 91 and $3.61 a litre for unleaded 98 across the country. Speaking to reporters, Luxon accepted the Government couldn’t alleviate pressure for everybody but claimed the support packaged targted the most “squeezed middle”. “These are the people that are doing it the toughest.” “The Government has heard you, we are responding,” Willis said. She hoped the additional payment could help people feed their children and commute to and from work and school. Willis acknowledged some people would say it wasn’t enough but she reiterated her focus on controlling inflation. “We are doing what we can do responsibly.” She forcefully dismissed any suggestion of support extending to beneficiaries, saying no advice had been sought on the matter. “Our focus is on working Kiwis.” A potential cost of $373m would be drawn from Willis’ Budget 26 operating allowance of $2.4 billion. She wouldn’t detail what cuts could be made to afford today’s support package, simply stating the Government would prioritise things that should be prioritised. Willis said she was aware public transport would play an “important role” in responding to the fuel price shock and committed to ensuring it remained an option while indicating the Government wasn’t planning on increasing current public transport subsidies. At multiple points in the press conference, Luxon reinforced the need to learn from the government support package administered during the Covid-19 pandemic and how such assistance must be targeted as not to inflate the economy. Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.

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