Families Package introduced with minimal change

The Government's Families Package is aimed at lower income families and beneficiaries. Photo: Lynn Grieveson

The Government's flagship families package will be introduced essentially as planned, with a few tweaks.

Announced by former Labour leader Andrew Little before the election, the range of measures is largely targeted at families and beneficaries.

It will replace the planned tax cuts introduced by the previous Government, which were broader and expected to lower taxes across the board.

The package includes a range of changes including boosting Working For Families, introducing a payment for families with new babies and a universal winter energy payment for beneficiaries and superannuitants.

Changes to Working For Families will be introduced as planned with the eldest-child rate rising to $5878 from $5303 and the abatement threshold increased to $42,700. The abatement rate will rise to 25 percent as planned under the previous Government.

New payment increases of $20.31 a week will also be introduced for the Orphan's Benefit, the Unsupported Child's Benefit and the Foster Care Allowance.

A Winter Energy Payment of $450 a year for single people and $700 for couples and singles with dependent children will come into affect on 1 July 2018. It will be available for those receiving a main benefit, New Zealand Superannuation or a Veteran's Pension.

The Government has introduced rules removing the payment for those who spend more than four weeks during winter overseas and will allow those who don't need the payment to opt out. There will be no means testing for the payment for superannuitants, however.

A Best Start payment of $60 a week will also become available from 1 July for families with new babies.

Babies born after the introduction date, or those born before but with a due date after 1 July, will be eligible for the cash in the first year. Lower income families will continue to receive the payment in the second and third year.

The Independent Earners tax credit of $10 a week that was scrapped by the previous Government will be reintroduced, giving up to $520 a year back to those earning between $24,000 and $28,000.

The previously announced extension to paid parental leave is also part of the package, while changes to the accommodation supplement and the accommodation benefit will be retained.

In the next five years the total cost of the Families Package is estimated at $5.53 billion. Scrapping the planned tax cuts is expected to save $8.36b over the same period.