Iran War: What Government’s support payments could look like and who will get them
Friday, 20 March 2026
ANALYSIS: Finance Minister Nicola Willis gave some pretty clear guard-rails when she described the financial support package she is working on for families hit hard by rising fuel prices.
The programme would be “targeted, temporary and timely”, it would use the “tax and transfer” system, it was being developed by Inland Revenue and Treasury, and it would use an already-existing policy tool - rather than something brand new.
She made clear that it would not be a blunt tool like the a fuel tax cut. And in many interviews this week Willis has mentioned “workers” or “working families” ‒ something The Post understands is a good guide to her thinking here.
There are a few things we can immediately read out of that.
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The fact that Inland Revenue (IRD) is developing the support rather than the Ministry of Social Development (MSD) can tell us a lot.
In broad strokes, MSD administers benefits to people who don’t work, such as jobseekers and superannuitants, while IRD administers benefits to people who do ‒ through tools like Working For Families. (There is some nuance here, as you can get part of Working For Families without working.)
IRD is generally seen within Wellington as a far more capable agency to do this kind of quick work. The tax department had a $2.6 billion upgrade to itst IT system in recent years that seems to have made it somewhat more agile, and the vast amounts of data it already collects through the tax system means it can design policy with a huge range of information on what people are actually earning.
It is also already the agency that administers the complicated Working For Families scheme, which gives families with children on modest and low incomes extra cash in the form of tax credits.
Willis was asked yesterday if the support would be available to people based on whether they had children, and declined to answer.
If she indeed decides to focus the support only towards people who have children, Working For Families would be the natural lever.
A small and temporary boost to the In-Work Tax Credit, which is $72.50 a week for families with one child and goes up for more children, could give some immediate relief to those who are both in work and on low incomes with kids.
Working For Families benefits start to “abate” (get smaller) at just $42,700 of household income, sharply reducing for every dollar earned over that threshold. That rate is already set to rise to $44,900 on April 1 ‒ meaning people get to keep more of their money ‒ so a temporary lift of that threshold could also put more money in people’s pockets if they earned over that amount.
It would also be cheaper than raising the main part of Working For Families, the Family Tax Credit, which is available to people who have kids regardless of whether they get another main benefit or not.
But economist and spokesperson for Child Poverty Action Group Susan St John told The Post that Willis would be making a mistake raising the In-Work Tax Credit without trying to help families who didn’t qualify for it, but would still need help to deal with rising costs.
“It [Working For Families] is designed to help with the costs of children, and those costs of children don't disappear when somebody loses their job, but if they lose their job, then they're losing access to that In-Work Tax Credit. So I think it would be send a really bad signal if she put up the In-Work Tax Credit,” she said.
“In a recession, when people lose their work through no fault of their own, they're supposed to have a reduction in their Working for Families payment to act as an incentive for them to get a job. This is really insulting.”
St John noted that in 2008 then Prime Minister John Key gave people who had lost their jobs in the recession temporary access to the full Working For Families credits.
What if Government wants to help people without kids?
There is another tax tool IRD has that could be of use if the Government decides it wants to help people without children - the Independent earner tax credit (IETC).
This is a tax credit designed for people not getting benefits through Working For Families or MSD designed to help top up low incomes, and is available for individuals making between $24,000 and $70,000.
It is currently worth up to $10 a week for people on incomes up to $66,000, and abates from there. IRD’s new systems mean that salary earners should be able to get their IETC every single pay in the form of lower taxes ‒ so a temporary boost to it could be administered immediately.