Parents earning more than $65,000 must support their 18-19-year-old children, with the government tightening eligibility for Jobseeker benefits.
From November 2026, there will be a parental assistance test for jobseekers and equivalent emergency benefits, with the government saying parents who can support their children should do so, instead of the state.
First announced at the Budget, the government had not decided where to draw the line at the time.
The policy was supposed to start from July 2027, but the government is bringing forward implementation.
Social Development and Employment Minister Louise Upston said the new Parental Assistance Test would comprise:
- a parental income test, demonstrating whether their parents earned income at or below the income limit, and/or
- a parental support gap test, demonstrating they could not reasonably be expected to rely on their parents for support
- the income limit would be set at an income cut-out point for a couple with children receiving the Supported Living Payment and would be adjusted annually
- currently this limit is $65,529 and is expected to rise to reflect the annual general adjustment of benefit payments
The government expected about 4300 young people would become ineligible for support and 4700 remained eligible in the 2027/28 financial year.
As at June 2025, Upston said 15,045 18-19-year-olds were on Jobseeker support.
"Going on welfare when you're young is a trap, with recent modelling suggesting that people under the age of 25 on Jobseeker support will spend an average of 18 or more years on a benefit over their lifetimes," she said.
When originally announced, the policy was expected to save $163 million over four years.
In contrast, the student allowance income threshold is $69,935.32 before tax, with the rate going down, if parents earn more than that.
If the joint earnings are $127,701.81 (if the student lives with their parents) or $137,187.86 (if they do not), the student does not receive an allowance at all.
Upston also announced that 18-24-year-olds participating in the Ministry of Social Development's community job coaching service could apply for a $1000 bonus payment, if they found a job and stayed off the benefit for 12 months.
The policy will start in October 2026, with the first payments able to be accessed a year later.
Currently, 4000 places exist in the job coaching scheme.
