Benefits and Superannuation payments will increase from tomorrow, says Social Development Minister Paula Bennett.

The increase of 1.96% means benefits and pension rates keep pace with increases to the cost of living.

“National is the first Government to enshrine in law, an automatic increase in benefits in line with CPI adjustments. This ensures fairness and certainty for those reliant on Government support,” says Ms Bennett.

On top of the flat adjustment for cost of living increases, Superannuation rates will be further adjusted to bring them up to 66% of the net average wage.

Therefore, New Zealand Superannuation and Veteran’s Pension rates will increase by a total 2.31% ensuring older New Zealanders benefit from increasing wage levels.

“National promised to maintain super and veteran payments at 66 per cent of the net average weekly wage and we’re delivering on that promise,” says Ms Bennett.

Welfare benefits, foster care allowance, student allowances and loans will also increase from tomorrow and income thresholds for the Community Services Card will rise as well.

The increase in the rates of benefits and allowances reflects the 1.96% change in the Consumers Price Index for the year to 31 December 2009.

“These changes will increase New Zealand’s spending on benefit and pensions by more than $240 million per year,” says Ms Bennett.

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