Iran war: Government considered $350 payment to everyone making under $100k before opting for narrower boost
Thursday, 23 April 2026
Newly released documents show the Government was warned its fuel income boost would not help many needy people - including a solo parent working up to 25 hours a week but still getting some assistance from a benefit.
Treasury warned that making the payment so narrow would add pressure to widen it to more businesses and people.
The Government ended up going with a $50 a week boost to families with children using Working For Families - set to run for a year or until the price of petrol drops below $3 a litre for four weeks.
The advice shows the Government considered making the payment far wider - with a $5 a week boost for lower-earning people without kids or a $350 payment to every adult making between $10,000 and $100,000.
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The $5 boost would be administered via the existing Independent Earners Tax Credit, a payment for people on modest incomes not receiving any benefits, including Working For Families payments.
But officials warned that option would be far more difficult to get going as payroll providers would need up to three months to get it to people. It would cost a further $230 million a year on top of the Working For Families boost.
The Government also explored a $350 payment to a wider group of people spread across three payments from August to October.
This would go to all individuals making between $10,000 and $100,000 a year - a wider group of Kiwis than the Working For Families boost - around 430,000 individuals.
It would cost $814m and be complicated to deliver, meaning it could not be ready by the start of April, as the Working For Families boost was.
Inland Revenue officials warned it would be a “large deliverable” that would be difficult as the data they held on individual incomes “may be incorrect or out of date for some people”.
But officials were not entirely happy with the option the Government went with.
It was noted that individuals in “similar financial circumstances” would not receive the payment the Government went with - including households with working parents but someone getting a main benefit, with an example given of “a sole parent working 25 hours and receiving wages and a part payment of Sole Parent Support”.
Finance Minister Nicola Willis noted this in her Cabinet paper but said ultimately the payment was designed to be very targeted.
“This population group is seen as an appropriate target group because it includes many people who work shifts or travel for work and who might otherwise be prevented from working, and people who would be disproportionately impacted by increased costs of living associated with fuel (such as food costs).”
Treasury wary of year-long payment
Treasury was wary of the fact that the payment the Government went with would last for a year - noting it committed the Government to a large fiscal response when it wasn’t clear how long the crisis would run.
“Agreeing to a one year $50 per week increase from 1 April 2026 commits the government to a large fiscal cost at a time when there is considerable uncertainty about the magnitude and length of the Middle East conflict, and its impacts on New Zealanders,” Treasury officials wrote.
Officials were also concerned that the targeted nature of the payment might put pressure on the Government to “widen the support to a larger group of stakeholders (both individuals and businesses), which would add to the fiscal cost.”
It appears this advice was given before the Government inserted a trigger to stop the payment if the cost of petrol went below $3/litre for four weeks in a row.
Willis said she took Treasury’s advice into consideration when taking the final package to Cabinet - and including the extra exit mechanism.
Announcing the payment, she was explicit about wanting to make it as targeted and temporary as possible.
“The policy is carefully targeted to families in the squeezed middle.”