26 March 2026
Rt. Hon. Christopher Luxon
Prime Minister
Hon. Nicola Willis
Minister of Finance
While we welcome the Government’s announcement to provide support to low-and-middle-income families who received the In Work Tax Credit (IWTC) under Working for Families, we do not believe this support extends far enough.
We call for the Government to expand the Fuel Relief Package to other households who will likely experience increased hardship as a result of rises in fuel costs.
This includes households receiving income support and people providing care for others.
Households receiving income support:
Fuel costs are expected to further increase the overall cost of living, causing those on Income Support to face greater hardship and risks to their health and wellbeing.
Goods and services that involve the use of fuel and transportation in their production or delivery will become more expensive to provide, and at least some of that additional cost is likely to be passed on to consumers. It is therefore expected that prices for many goods and services – including everyday things like food and grocery items – will increase, and that this will happen soon (1).
People on Income Support were already unable to cover their basic living costs prior to this oil crisis (2). Further hikes in the cost of essential goods and services will have very serious impacts for them, with implications for their ability to stay housed, buy food for themselves and their families, and meet other basic human needs.
We acknowledge the increases that people on Income Support will be receiving on 1st April, but would point out that these increases won’t address the substantial deficits most people on Income Support faced prior to this fuel crisis, let alone allow people to absorb the further hikes to the cost of living coming down the line. It is therefore urgent for people on Income Support to also receive financial relief as part of the Government’s response to this crisis.
Fuel increases likely to provide a barrier to children in households receiving income support attending school
Transport is an important factor for people receiving Income Support, including those who are caring for children and carrying out their obligations to seek work. Evidence suggests childhood poverty can have broad ranging impacts including on school achievement and adult employment. Attendance services have raised concerns regarding the impact of increases in fuel costs on school attendance (3), while research suggests that around 60% of children aged 5-14 years use fuel-based transport as means of getting to and from school (4). Given the Coalition Government’s strong focus on improving school attendance, it is important that we ensure children and young people can continue to access school, and that the cost of transport does not become a barrier to attendance.
People receiving income support without children are also reliant on fuel to meet obligations
The proposed relief package does not sufficiently support those receiving benefit payments who do not have children. Recent modelling from Kore Hiakai suggests that for households receiving Jobseeker Support, including single adult families, income is insufficient to cover all basic costs (5). The rise in fuel costs risks individuals on these supports falling further into hardship. The Coalition Government has prioritised reducing ‘benefit reliance’, however, the rise in fuel costs may present a barrier for individuals on the Work Ready Jobseeker benefit from accessing work.
The current package does not reflect the needs of people receiving income support with a health condition or disability
People with a health condition or disability make up over half of people on adult benefit. Benefit inadequacy is particularly significant for the 96,039 people currently receiving JobSeeker Health Condition or Disability Support for whom access to transport to attend health services is essential. Difficulty accessing public transport, particularly for those living rurally where these options may be more limited, places increased importance on the affordability of other means of transport.
We are also concerned about the Government’s decision to reduce fare subsidies for the Total Mobility (TM) scheme from July 1. It is likely that TM operators, with many being taxi/small passenger transport firms, will significantly raise fares to cover increased fuel costs.
Increased fuel costs will limit transport options for Disabled people on Supported Living Payment
For the 106,890 people receiving the Supported Living Payment public transport is often inaccessible, increasing reliance on private transport options. While the disability allowance covers additional costs including transport needs, this support is capped. The rise in fuel costs for these individuals presents a barrier to travel and may hinder access to support services and medical appointments.
Those providing care for others
The contribution of unpaid carers of adult persons is not recognized within the existing package
Unpaid caring is an essential part of the health and disability system. The unpaid work of New Zealand’s 1m+ unpaid family, whanau and aiga carers has an annual economic value of at least $17.6b. This includes care for an aging parent, spouse, grown child, and other family members. Unpaid carers without children under the age of 18 living at home are excluded from the IWTC fuel subsidy yet face increased fuel costs associated with driving those they care for to health and related appointments, social services, and engaging in household tasks. Public transport is often inaccessible, inappropriate, or non-existent.
Increases in fuel costs is placing greater financial pressure on paid carers and home support workers who must pay for travel between clients
Paid carers and home support workers without children are excluded from the IWTC Fuel Relief, yet face the added pressure of needing to pay for fuel to travel between clients for work. The rising cost of travel is not adequately covered by existing employment agreements. Public transport is either non-existent or inadequate. The cancelling of pay equity claims for carers and home support workers means many earn less than the living wage and are not paid sufficient income to absorb this fuel price shock.
We call for the Fuel Relief Package to be extended to include a temporary $50 per week increase in the Winter Energy Payment for these households on a main benefit or Superannuation in alignment with the increase in the In Work Tax Credit.
We acknowledge the positive steps the Government has taken to ensuring increases in fuel costs do not negatively impact low-and-middle-income working families.
We urge the Government to extend the Fuel Relief Package towards these additional households to mitigate the impacts of financial hardship experienced by communities across Aotearoa and uphold commitments to reducing child poverty.
Ngā mihi nui,
References
(4) https://ehinz.ac.nz/assets/Surveillance-reports/Released_2026/Active-transp_2024-25-data_final.pdf
