The $3.3 billion boost to benefits and student support was the centrepiece of this year's Budget, but there is already a question mark over whether it will be enough to keep pace with the rising cost of living.
File image. Photo: RNZ / Samuel Rillstone
Beneficiaries will get up to $55 more in their pockets each week, once the increases are fully implemented next April.
The first $20 increase will come into effect on 1 July and the rest will come next April.
It is estimated up to 33,000 could be lifted out of poverty - on the after housing-costs measure - because of the changes.
For Tony and his whānau in the Napier suburb of Maraenui, the more money the better, because it was not easy trying to survive on the benefit.
"Food, power and all that - you're left with nothing. If the benefit increases, at least you've got something leftover," he said.
Julz also lived in Maraenui and she hoped the increases alleviated some of the hardship she saw every day.
"There's pretty heavy poverty around, you can just see it around in these areas, food is going up, rents are going way up, people just can't afford the basic necessities of life."
For solo mum Kimmy, a dollar's a dollar, but as she struggled to find a new place to rent in Auckland, she did not think it would go that far.
"Twenty dollars, it is only bread and milk, basically everything is increasing anyway and it just does not really make a difference as much."
Nicki Dutton from the Salvation Army in Porirua did not think the government had gone far enough.
"I certainly don't believe it's enough when you consider the prices of rent at the moment and the high likelihood that that is going to increase the cost of living," Dutton said.
"$20 now and a few more dollars in another year is not going to make the difference that it needs to make."
Auckland City Missioner Helen Robinson said increasing benefits in line with - and for beneficiaries with children above - the recommendations made in the 2019 Welfare Expert Advisory Group report was a good start.
Auckland City Missioner Helen Robinson. Photo: RNZ Insight / Sarah Robson
But she said the government had more work to do.
"The Welfare Expert Advisory Group levels were set before Covid and one of the significant impacts that we've seen is the increase in rents over that time."
Until there was enough affordable housing, Robinson said the people the city mission worked with would still be finding it tough.
"The reality of $5, $10, $15 a week in a family's budget can make a really, really significant difference, so I'm hoping that people will see that certainly from July 1, $20 will make a difference."
But Robinson said she expected those people would still need more.
Wellington City Missioner Murray Edridge said demand for food was still higher than what it was pre-Covid-19.
"My anxiety is about the number of families that are just surviving."
The boost to benefits would give families a bit more of a buffer, Edridge said.
"It's going to make a difference, without question. Is it enough? No, I think in terms of dignity, we still need to keep pushing."
But rising rents were putting a lot pressure on families, Edridge said.
"When you have the costs of housing being as excessive as they are, then there isn't enough money left to pay for food, so we're seeing the impact of other effects manifest themselves in food demand."
Social Development Minister Carmel Sepuloni stood by the actions taken by the government so far.
Social Development Minister Carmel Sepuloni. Photo: RNZ / Samuel Rillstone
"There are calls from all corners to go further than what we have done, but I will say, I am relieved actually that we have been able to meet the Welfare Expert Advisory Group's recommendations."
But she acknowledged there would be more work to do to lift more families out of poverty.
"We have the political will to continue to do everything we can to address child poverty in New Zealand, I'm not going to pre-empt what will be in future Budgets, but we will continue to do the work," Sepuloni said.
Meanwhile, Prime Minister Jacinda Ardern said the government had found nothing to suggest benefit increases will lead to rent increases.
"We went back through the evidence through recent times we have had changes to the amount of assistance people receive and we have not seen a correlation that rents go up as a result," she said.
What does $25 more a week get students?
An extra $25 extra a week was promised to students from April 2022.
Living in Auckland was pricey for students, so any top up to their bank accounts was being welcomed.
John, a mature student who moved to Auckland from Dunedin to pursue a career in medicine, said an extra $25 in his pocket would make a huge difference.
At Auckland CBD's Countdown supermarket he showed Checkpoint reporter Louise Ternouth how he would spend it.
"Weet-bix - excellent, special - $6.50," he said.
Two boxes cost him $13, leaving some money for milk.
Two three-litre bottles of value brand milk cost him $10.64, making it $23.64 with the cereal.
"I'm very happy with that. That will feed me for a bit longer," he said.
John's weekly living costs were kept purely for necessities, so the extra boost would go a long way.
"There's my rent, phone bill - phone and data really important these days. I'd like to cut my hair but I think I'll leave that for a while.
"Razors, things like that, they're really expensive. This will really help me because it assists with the food, gives that little extra, and any little extra is well-received."
With the final money from the pledged $25 extra for students, John would buy Whittaker's chocolate bar, bringing his shopping to $24.94.
How would a beneficiary spend an extra $20 per week?
The government announced an initial $20 dollar boost to benefits from 1 July.
Karen from Hastings, who was on the sickness benefit, said she had to save every cent to make sure she was feeding her husband and four children.
"I really feel for other families out there who are struggling," she told RNZ Hawke's Bay report Tom Kitchin.
She got her vegetables at home, or for a koha at a place near home.
On the shopping list at Pak 'N Save for the extra $20: Milk, coffee, noodles, sugar, two loaves of white bread, a pack of 20 eggs, table spread and a small treat with the last few cents - a lollipop.
