The $50 a week payment that has gone to about 143,000 working families since April is now heading back to the Cabinet table, and its future rests on a set of weekly fuel figures due out on Wednesday.
Finance Minister Nicola Willis told RNZ that the next release of official fuel price monitoring is likely to show the national average price of 91 octane petrol sitting under $3 a litre for the previous week. That is the trigger written into the policy. “We anticipate that will show fuel prices below $3 for the week previous, which will trigger me to take advice to Cabinet on what we do with the scheme going forward,” Willis said.
The payment is not a standalone cheque. It is a temporary lift to the in-work tax credit, part of Working for Families. Willis announced it on 24 March as the Government’s answer to the fuel price shock driven by conflict in the Middle East, and Inland Revenue lifted the credit from $97 a week to $147 a week from 1 April, with the first larger payments landing on 7 April. Roughly 14,000 additional families became eligible for a smaller amount. Treasury costed the package at $373 million if it ran the full twelve months, with nothing carried into future years because the increase was time limited from the start.
“This temporary boost will deliver support to working families who are under significant cost-of-living pressure, without making inflation worse or further driving up Government debt,” Willis said when the package was released in March.
Two exit conditions were built in. The boost ends on 31 March 2027, or earlier if the price of 91 octane drops below $3 a litre for four consecutive weeks, whichever comes first. That second condition is what has put the scheme in play. Petrol slipped under $3 in late June, and by Tuesday morning fuel monitoring website Gaspy had the national average back at exactly $3 after another round of volatility in oil markets.
Prime Minister Christopher Luxon said the coalition was alive to what he described as a potential yo-yo effect from the conflict, and that the Government would be pragmatic about what it decided. Willis made a similar point, noting that given the significant increase in international fuel prices over recent weeks, officials expect pump prices in coming weeks to spike back above $3 again. In other words, the four week clock could stop before it finishes running.
Deputy Prime Minister David Seymour was blunter about what should happen if prices hold. “If it was a blip, we’ll be glad that we didn’t abandon the policy prematurely. If this is hopefully a return to more normal prices, then the only thing to do is to cease this payment and save the taxpayer hundreds of millions of dollars,” Seymour said.
Willis has been more cautious, pointing out that hitting the four week mark triggers advice to Cabinet rather than switching the payment off automatically. Ministers still have to make a call, and they will be making it with an election in front of them.
Labour has signalled it will not be pushing for the payment to go. MP Kieran McAnulty said his party was “not going to ask them to take away the sole standing thing that they have done”, a line aimed squarely at the Government’s cost of living record rather than at the payment itself.
Who gets the money has been contested since day one. The boost goes only to low and middle income working families with children. Income cut-offs sit at roughly $89,000 a year for a family with one child, about $112,000 with two children, and about $135,000 with three. Beneficiaries, superannuitants and working households without children get nothing from it, even though they buy petrol at the same pumps.
Willis defended that design in March, saying “working families face the obligation to get to and from work each day. Beneficiaries do not face that obligation.” She described the target group as “parents who are working hard for a living, are not eligible for main benefits, and yet have modest household incomes”, and said the Government was limited by the debt run up after Covid and could not fund large untargeted spending.
The decision lands alongside other cost of living announcements the Government has been keen to talk about. On 27 July Willis said more than 97,500 families had now received a FamilyBoost payment towards early childhood education fees, out of about 115,000 registered, with 6,566 families receiving the maximum $120 a week after the rebate was lifted from 25 percent to 40 percent of eligible fees.
Ending a payment worth $50 a week to 143,000 households in an election year is not a small decision, and neither is extending one that was sold to voters as temporary. If Cabinet keeps it going, ACT will be able to point at the cost. If Cabinet ends it and petrol climbs back over $3 within a fortnight, the Government will be explaining why it pulled support just as prices turned again. Voters who want to see where the parties actually sit on tax, spending and household support can compare them using our voting tool.
The weekly fuel data is due on Wednesday. Willis will take advice to Cabinet from there, and until ministers decide, the higher in-work tax credit keeps being paid.
What do you think should happen to the $50 a week payment, and does the way it was targeted seem fair to you? Leave a comment below and tell us how it has played out in your household.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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