The Beehive building

Wellbeing Budget 2021

20 May 2021.

Budget 2021 builds on investments to make the welfare system better for people in need, tackle poverty and support more people into work.

Demand for MSD support and services has increased because of COVID-19, with more people receiving a benefit. Budget 2021 enables MSD to support more people through the impacts of COVID-19.

Budget 2021 puts more money into the pockets of people on benefits so they can better meet their essential living costs and their children’s needs. It sustains our deliberate focus on employment, enabling MSD to support more out-of-work New Zealanders into jobs. Increasing benefits and funding employment services were recommended by the Welfare Expert Advisory Group.

Key initiatives with new funding for the next four years are outlined below.

Increasing main benefits

  • On 1 July 2021
    • Main benefits will increase by $20 per adult per week - $1.701 billion over 4 years.
  • On 1 April 2022:
    • All main benefits will further increase to meet a key recommendation from the Welfare Expert Advisory Group - Budget 2022 pre-commitment - $1.593 billion over the same 4 years.
    • Families with children get an additional top-up of $15 per adult a week.
    • Student Allowance and Student Loan for living costs increase by $25 a week.

Getting people into work and supporting more New Zealanders impacted by COVID-19

  • MSD employment products and services will meet increased demand to support more out-of-work New Zealanders back into jobs - $99.548 million over 2 years.
  • Sustaining additional frontline staff will enable MSD to keep supporting increased numbers of New Zealanders needing income and employment services because of the impacts of COVID-19 - $86.086 million over 2 years.
  • Training Incentive Allowance will be available for degree-level study and below for sole parents on a benefit as well as carers and disabled people on the Supported Living Payment, from 1 July 2021 to 1 January 2025 - $127.04 million operating over 4 years and $36.711 million capital over 5 years.
  • Sustaining additional housing staff brought on since COVID-19 full lockdown will enable MSD to keep supporting increased numbers of people in need of emergency housing - $9.390 million over 3 years.
  • The medical certificate process will be improved for MSD clients whose ability to work is affected by a health condition, injury or a disability - $85 million over 4 years.

Making a difference for children, families and caregivers

  • Orphan’s Benefit and Unsupported Child’s Benefit will increase from 1 April 2022 by $34.84 per week for children aged 0-4 years and by $10 for children aged 5 years and over - $57.153 million over 4 years (Vote Social Development and Vote Oranga Tamariki).
  • From 1 April 2022, Childcare Assistance income thresholds will be adjusted annually in line with wage growth, so low and middle-income families continue to qualify for Childcare Assistance as the average wage rises - $13.298 million over 4 years.
  • 3,300 additional places for low-income families will be funded with Out of School Care and Recreation Service (OSCAR) providers - $9 million over 4 years.
  • Continued funding for KickStart breakfasts will support up to 36,000 school children with five nutritious breakfasts each week - $5.064 million over 4 years.
  • Work in partnership with KidsCan will help support families in need to improve the wellbeing of 17,500 school-aged children - $1.400 million over 4 years.
  • Continuing Kāinga Whānau Ora will support existing whānau and 60 to 75 additional whānau - $2.250 million for 1 year.

Disability and accessibility

  • Funding will improve equal and accessible access to government information for disabled people and others with access needs, strengthen advocacy and disability advice within Government and support New Zealand’s disability advocacy role at the United Nations – $5.764 million over 4 years.


  • Continuing to implement the Better Later Life Strategy to enable older people to better engage online, access homes that meet their needs and get better employment outcomes – $1.964 million over 4 years.

Family violence and sexual violence

  • Extending funding for early wrap-around services in five existing locations to help people stop using violence - $12.219 million over 4 years.

MSD critical cost pressures

  • Addressing critical MSD cost pressures will enable MSD to continue delivering services and ensuring pay equity. This includes remuneration, site safety and security, reducing risk in critical IT and service delivery systems – $397.359 million operating over 4 years and $47.336 million capital.
  • MSD will pay clients who paid too much for their care in the past, based on a revised financial means assessment for Residential Care Subsidy in line with a 2019 Court of Appeal decision - $20 million over 2 years.

Crown entity initiatives

  • Support for the Children’s Commissioner will ensure the Oranga Tamariki system continues to be monitored while the new Independent Children Monitor is set up - $1.2 million for 1 year.
  • Remedial building work will allow the New Zealand Artificial Limb Service in Auckland and Christchurch to continue providing critical service to amputees - $5 million capital for 1 year.
The Beehive building
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