By Anna Harcourt

Here’s some of the key things impacting young people in the government’s 2025 budget.  

18 and 19 year olds won’t be able to get the benefit if their parents can support them 

 From July 2027, single unemployed 18 and 19 year olds will need to do a “parental assistance test” to qualify for the Jobseeker or Emergency benefit.  

“With this announcement, we’re clearly saying that 18- and 19-year-olds who don’t study or work and can’t support themselves financially, should be supported by their parents or guardians, not by the taxpayer,” Social Development and Employment Minister Louise Upston said. 

 “Young people can’t expect to go automatically onto a benefit, and parents must be ready to help. This change strengthens financial incentives to enter employment, education or training. 

“Young people who do require support from the Ministry of Social Development will still be able to access it. For instance, in some cases 18- or 19-year-olds may not be able to rely on parental support. If they meet all other relevant eligibility criteria, they will be able to access some supports.” 

KiwiSaver: Extending government contribution and employer matching to 16 and 17-year-olds 

“To encourage first-time employees to adopt the savings habit, we’re extending the government contribution, and employer matching, to 16 and 17-year-olds in the workforce,” Finance Minister Nicola Willis said. 

The change will take place from July 1 2025. 

Government contribution is where the Government gives a lump sum payment each year to a person’s KiwiSaver, as long as that person has contributed a certain amount themselves. 

Previously the Government would contribute up to $521.43 each year into a person’s KiwiSaver, as long as that person had contributed at least $1042.86 themselves.  

 The Government contribution has now been halved to $260.72 a year.  

Prior to this announcement, anyone over the age of 18 was eligible for the government contribution, no matter how much they earned.  

 That now will be extended so that 16 and 17 year olds can get it, and people earning $180,000 and over will no longer be eligible.  

Employer matching is where a person’s employer has to contribute money to their KiwiSaver up to a certain percentage.  

Previously employers did not need to do it for workers under 18. 

Other changes to KiwiSaver include the default contribution rate for both employers and employees rising from 3% to 4% from April 1 2028. People will be able to temporarily choose to stay at 3%.  

Funding for “priority subjects” in tertiary education, and a maximum fee rise of 6% 

There will be a 3% increase in subsidies for tuition and training costs for universities, polytechnics and other tertiary education providers.  

STEM subjects (science, technology, engineering and maths), initial teacher education and priority health workforce education will get an additional 1.75% increase in tuition cost subsidies. 

 “When considering subsidies, we focused on workforce demand areas where study adds the greatest value – both for students planning their futures, and for the wider economy that relies on their skills.  

“These subjects often lead to rewarding careers and contribute to productivity and growth in sectors like health, energy, infrastructure and digital technology,” Minister for Vocational Education Penny Simmonds said. 

The Government is also proposing tertiary providers will be able to increase fees up to a maximum of 6% in 2026. 

“The proposed maximum rate reflects that fees have lagged behind inflation in recent years, making it harder for providers to maintain course quality. I will consult on the proposed fee increase later in 2025 through a notice published in the New Zealand Gazette,” Minister for Universities Shane Reti said. 

Funding boost for youth offender facilities, including military academies  

Minister for Children Karen Chhour said the Government was “building on the successes that have already led to a 13 per cent reduction in young people with serious and persistent offending behaviour”. 

“We continue to want better for, and from, these young people. This is not just an investment in facilities, it is an investment in them,” she said. 

Over four years the funding includes: 

  • $33 million for “military-style academies and transitional support” for young offenders 
  • $33 million for improving the safety and quality of facilities at youth justice residences, and $22 million for repairs and upgrades at Oranga Tamariki residences 

And here’s some other key points from today’s Budget: 

  • $12.8b saved from pay equity changes 
  • "Investment Boost" tax deduction for businesses, for the cost of buying "productive assets" – like machinery, tools, equipment, vehicles and technology 
  • 12-month prescriptions from next year. Currently prescriptions for most medicines are for three months 
  • 111 calls for mental health will get a response from a mental health team, not Police 

For all full breakdown of other changes in Budget 2025, head to 1News.