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The government has introduced a temporary support package to help households cope with rising fuel costs, with around 150,000 families set to receive an extra $50 per week. The measure is designed to provide relief to those most affected by increasing petrol prices, but it is not available to everyone. Instead, it focuses on specific groups considered to be under the greatest financial pressure.
The additional payment will be delivered through a boost to the in-work tax credit, part of the Working for Families scheme. Because of this, only families already eligible for this credit—or those who qualify and apply—will receive the extra support. Payments are scheduled to begin in April, with weekly recipients seeing the increase from 7 April and fortnightly recipients from 14 April, depending on their usual payment cycle.
Eligibility is limited to low- and middle-income working families with dependent children. This means households must be earning income from employment and actively supporting children to qualify. The policy excludes people receiving main benefits, retirees on superannuation, and individuals or couples without children. While this has drawn some criticism, the government has defended the decision as a necessary way to target limited resources effectively.
Officials, including Finance Minister Nicola Willis and Prime Minister Christopher Luxon, argue that working families face unique cost pressures, particularly when it comes to transport. Many rely on cars to commute to work, take children to school, and manage daily responsibilities. Rising fuel prices therefore have a direct and unavoidable impact on their weekly expenses. In contrast, the government notes that beneficiaries are not required to commute daily for work and will also receive their standard annual payment increases from 1 April.
The policy is aimed at what is often referred to as the “squeezed middle.” These are households that earn too much to qualify for most government assistance but still struggle with the rising cost of living. With expenses such as housing, food, childcare, and transport continuing to climb, even moderate increases in fuel prices can place significant strain on their budgets. The extra $50 per week is intended to ease some of that pressure and provide short-term financial breathing room.
Income thresholds determine who can receive the in-work tax credit and, by extension, the additional payment. For the current tax year, a family with one child can earn up to about $89,000 annually and still qualify. For families with two children, the threshold rises to roughly $112,000, and for three children, around $135,000. These figures are approximate and can vary depending on individual circumstances, but they offer a general guide to eligibility.
The government has acknowledged that many households outside these thresholds are also feeling the effects of higher fuel prices. However, Willis has stated that broad, untargeted spending could worsen inflation and increase public debt, particularly following the economic impact of the Covid-19 pandemic. As a result, the support package has been deliberately limited to ensure it remains fiscally responsible while still helping those most in need.
The payment increase is temporary and will last for up to one year. However, it may end earlier if fuel prices fall significantly. Specifically, the support will stop if the price of 91 octane petrol drops below $3 per litre for four consecutive weeks. This condition reflects the policy’s purpose as a short-term response to a specific cost-of-living issue rather than a permanent benefit.
For families already receiving the in-work tax credit, the process is straightforward. Inland Revenue will automatically apply the increase, meaning recipients do not need to take any additional steps. Payments will simply rise in line with the new policy. However, those who believe they may qualify but are not currently receiving the credit are encouraged to contact Inland Revenue to check their eligibility and apply.
Overall, the fuel support package is a targeted attempt to assist working families with children who are struggling with rising living costs. While it does not cover all households, it aims to deliver timely and practical relief to those considered most affected by higher fuel prices.
-TIN Bureau