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Impacts of the Families Package

Accommodation supplement changes did not lead to a notable increase in rents

A study we commissioned Motu Economic and Public Policy Research to undertake found that the Families Package increases to maximum possible Accommodation Supplement rates did not lead to a notable increase in the rents people pay. After two years, around 90 percent of the extra increase in assistance in areas with higher increases in maximum rates was captured by Accommodation Supplement recipients, not landlords, as an increase in after-rent income.

Long-term trends show no evidence of rents for Accommodation Supplement recipients increasing faster than overall rents for new tenancies following the Families Package changes.

Changes to financial incentives and income for model families

We used model families to look at how incomes and financial incentives to work changed after the Families Package was implemented. Model families with children had the largest income gains. Model single people without children also had gains in income, but consistent with the policy design these were smaller.

Income gains in the first year of the package

We looked at how incomes changed in the first year following implementation of the package. We estimated that over half of all families with children received Families Package payments in its first year, with an average increase in payments for recipient families of $55 per week.

This study could not be undertaken until well after implementation, so that we could count the extra income that families could receive as a lumpsum after the end of the first tax year. It does not capture the full income gains from the Families Package because Best Start and the paid parental leave extension were not fully implemented in the first year, and the Winter Energy Payment was paid for a shortened period.

Impacts of the changes to early years entitlements

This study focussed on the effects of the changes to early-years entitlements that introduced a Best Start tax credit (replacing the Parental Tax Credit) and increased paid parental leave in the first six months. Mothers and first parents in same-sex couples in the first cohort to qualify gained an additional $55 p/w as a result. This is equivalent to an extra 10% increase in their income, on top of income gains from other parts of the Families Package. In time, the lift in income will provide a unique opportunity to understand the difference that more income support makes.

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