Minimum wage, benefits increase from today

Sat, Apr 1
The minimum wage and many benefits are going up on April 1

Today is April 1, which means a number of changes to things like benefits and the minimum wage that may help some with the rising cost of living.

It comes as mortgage rates climb, the cost of fruit and vegetables increases, and inflation stays stubbornly high.

"In tough times, it's critical we support those who are struggling the most to make ends meet," Prime Minister Chris Hipkins said.

Minister for Social Development Carmel Sepuloni said the changes showed the Government had "prioritised income adequacy and lifting the standard of living for New Zealanders".

National Party deputy leader Nicola Willis said it was good to see "some New Zealanders were getting relief from what's a prolonged cost of living crisis".

"But sadly, some workers will miss out, yet again, and I know lots of people are anxious about the winter that lies ahead."

Minimum wage

The minimum wage will go up from $21.20 an hour to $22.70 — around 7%.

The starting-out and training minimum wage will go up from $16.96 to $18.16 per hour.

ACT's David Seymour said advice from the Ministry for Business, Innovation and Employment suggested the hike could cost 5100 jobs.

"The move to force businesses to pay $352 million more in wages will mean they raise their prices or close, and more people will be out of work and on welfare for longer. As we head for recession, New Zealand can't afford that."


Superannuation will go up in line with inflation, with a couple both aged over 65 getting $102.84 more a fortnight.

A single person living alone could receive an extra $66.86 a payment.

Veteran's pensions are also going up.


Main benefits will also increase by the rate of inflation. A family with children and one person on the jobseeker benefit will get an extra $40.86 a week, and sole parents $31.83 a week.

Susan St John of the Child Poverty Action Group said benefit increases would leave many families in a holding pattern as it will still leave a considerable shortfall between what they get and their basic living costs.

Working for families

Those getting best start payments will receive an extra $4 a week, increasing it to $69 a week, while there's an increase to the eldest child rate of the family tax credit, taking it to $136 a week.

The income thresholds for the childcare subsidy and out of school and recreation subsidy are also increasing.

Student support

Student support rates are going up in line with inflation, with a single student under 24 without children getting an extra $20.21 a week.

Effects on employers and employees

Tracy Mears, a policy director at MBIE, explained to 1News how the minimum wage increase would affect employers and employees.

She said the effects on employers would fall into three broad categories.

"They could increase their product prices, they could see a fall in profits or they may try and reduce their input costs which may include labour costs," she said.

With minimum wage rising 7%, around 5000 people would be affected by a "restraint on employment".

Mears explained this meant employment that otherwise would have happened.

"It may mean that people in existing employment lose their jobs, but it could also mean that future job growth doesn’t occur, so jobs that otherwise would have been created aren’t created.

"In general if there is a higher expected increase in the minimum wage, there’s going to be a higher expected increase in the restraint on employment.

"At 7% the model estimates that the restraint on employment is around 5000 roles but that doesn’t mean it’s going to be a loss of jobs overnight, it could mean just a lower growth in future jobs. In context there’s around 220,000 people we believe will benefit from an increase in the minimum wage," Mears said.