Over 1.5 Million Kiwis to Receive Financial Boost Amid Rising Living Costs

Indexing the main benefits of inflation has been a consistent practice, utilized responsibly in 32 of the past 36 years by governments across the political spectrum.

Beginning April 1, 2025, over 1.5 million New Zealanders, including more than 900,000 superannuitants and nearly 5,000 veterans, will receive increased financial support to help mitigate ongoing cost-of-living challenges. Social Development and Employment Minister Louise Upston announced that these adjustments, part of the Annual General Adjustment (AGA), aim to provide relief to various groups, including pensioners, beneficiaries, students, and low-income families.

Scope of the Increases

The AGA will result in payment increases ranging from just over 2% to approximately 3%, benefiting the following groups:

• Superannuitants and Veterans: Approximately 933,200 individuals receive New Zealand Superannuation, and 4,900 veterans will see a boost in their payments.

• Main Beneficiaries: Around 409,300 people on main benefits will experience higher payments.

• Students: An estimated 47,400 students will receive increased allowances.

• Non-Beneficiaries with Supplementary Assistance: Approximately 70,000 non-beneficiaries receiving supplementary assistance are expected to be better off.

Alignment with Economic Indicators

Since 2024, benefit rates have been indexed to the Consumer Price Index (CPI) to ensure they keep pace with inflation. For the year ending December 2024, the CPI was 2.22%. Pensioners will receive an additional boost this year, with total increases of around 3%, due to the relationship between superannuation rates and the net average wage, which forms part of the rate calculation.

Minister Upston acknowledged the cost-of-living crisis inherited from the previous government and emphasized that the upcoming adjustments are part of broader initiatives to support New Zealanders over the past 16 months. As of March 19, over 51,000 households have been assisted with early childhood education costs through the FamilyBoost program, injecting $31.8 million into the pockets of low and middle-income families.

Historical Context and Future Outlook

Indexing the main benefits of inflation has been a consistent practice, utilized responsibly in 32 of the past 36 years by governments across the political spectrum. This approach ensures that income support systems remain responsive to economic conditions, providing a safety net for those in need.

The government remains committed to addressing the cost-of-living pressures faced by New Zealanders. Finance Minister Nicola Willis highlighted that average household living cost inflation has continued a downward trend, indicating that governmental measures are having a positive impact. Data released by Stats NZ shows that yearly household living costs increased by 3% in the year to December 2024, down from a 3.8% increase in the year to September 2024, and a 7.4% increase in the year to September 2023. 

These adjustments reflect the government's ongoing efforts to support vulnerable populations and ensure that benefits and pensions remain aligned with living costs, thereby maintaining the purchasing power and quality of life for many New Zealanders.