Ardern announced the increases during her address to the Labour Party annual conference today, saying it would help those on lower incomes who are wrestling with the higher costs of living because of Covid-19.
"Covid-19 has been tough on families and has contributed to the increase in the cost of living. Increasing support for low and middle income families to help cover the basics is the fair thing to do."
Expected to cost $272 million over four years, the changes will kick in from April 2022.
The changes will lift the Family Tax Credit paid to both beneficiary and working families by almost $15 a week for an eldest child, and $13 per week for subsequent children.
The Best Start payment will also lift from $60 a week to $65 a week. That payment goes to all new-born babies for the first year, kicking in after paid parental leave ends, and continues for those on low incomes for a further two years.
The increases are a combination of scheduled inflation increases of 8.75 per cent for the Family Tax Credit with an additional top-up of $5 per week.
Ardern said the changes followed on from the increases in benefit levels earlier this year, which were expected to lift between 19,000 and 33,000 children out of poverty.
The changes were targeted toward the lowest income families – those on less than $40,000 will benefit the most getting an average increase of $26 a week.
"But we know all families are doing it tough, so everyone receiving a Family Tax Credit or Best Start payment will be better off compared to what they receive now."
Some of the costs would be offset by an increase in the abatement rate for the Family Tax Credit 25 per cent to 27 per cent, although the abatement threshold of $42,700 would remain the same.
Social Development Minister Carmel Sepuloni said that would mean those on the lowest incomes got the most while nobody would be worse off compared to now.
The benefit increases package was the centrepiece of the Budget this year – it increases weekly benefit rates by between $32 and $55, with an extra $15 a week for families with children.
Sepuloni said the changes were a further step to ensuring people could have a decent standard of living. A full review of Working for Families was underway and details due to be released later this year.
About 346,000 families are eligible for Working for Families, more than half of all families. Of those, 281,000 are eligible for the Family Tax Credit, which goes to both beneficiary and working families.
That currently pays $113 a week for an eldest child and a further $91 a week for younger children.
'No intention of stepping down' - PM
Earlier today, Ardern told Newshub Nation ahead of the speech that she had no intention of stepping down any time soon and considered her job to be the "greatest privilege of my life."
The conference, being held online, is the party's first since Labour's historic election win last year, and is set to vote on a range of changes to its constitution and rules.
The most significant will be a move to allow Labour's caucus of MPs to elect a leader without going to a vote by the wider party membership. That would happen if one contender secured the support of two thirds of caucus within one week of the position coming up.
Party president Claire Szabo said the change was predominantly to ensure there could be a swift handover if a leader stepped down while the party was in Government, as happened in National when former National Party leader John Key stepped down.
When asked about the possibility of that on Newshub Nation this morning, Ardern said she had no intention of stepping aside any time soon. "I'm not stopping. I need to carry us through, it's my job.
"You can't anticipate what you'll come up against in this job, but I still consider this to be the greatest privilege of my life. Yes, we are in the biggest health crisis going back to 1918, and a significant economic crisis as well. Yet to be the person who is able to steward New Zealand through that time, despite the difficulties that it presents I still consider it an honour."
The party conference will wrap up later today – a day shorter than usual.
It comes after a testing week for the Government in its handling of the Covid response and ahead of a busy week of Apec meetings for the Prime Minister, which New Zealand is hosting but is being held virtually.
Ardern said on the Nation this morning that allowing Aucklanders to get out of the city for summer was now "a bottom line" for the Government – and it was trying to find a way to ensure that could be done safely. Options on the table included allowing only the vaccinated to leave the city, but Ardern no decision on that had yet been made and the Government was still getting legal advice on it.
Earlier this week, Ardern was heckled by those protesting against vaccine mandates and opposing lockdowns on visits to Northland and Whanganui.
The two regions are amongst the least vaccinated – Ardern was trying to boost those rates to ensure all DHB regions hit a 90 per cent double-dosed threshold at which the new traffic lights system can begin – and the boundaries around Auckland eased.
