Living Wage vs Minimum Wage vs Benefits in New Zealand: What’s the Real Picture in 2025?

From 1 April 2025, the adult minimum wage is $23.50 an hour, which works out to $940 gross for a 40-hour week. By contrast, the Living Wage, set independently by the Family Centre Social Policy Research Unit, rises to $28.95 in September, or $1,158 gross for the same hours.

On the benefit side, a single adult on Jobseeker receives $262 a week before tax. A sole parent with one child, once supplements like accommodation support and tax credits are included, might receive closer to $946. A couple with two children could access around $1,064.

When these figures are converted into take-home pay after tax and ACC, the differences become starker:

Scenario	Net weekly income
Minimum wage (40 hrs)	$778
Living wage (40 hrs)	$927
Jobseeker – single adult	$230
Sole parent, 1 child (with supplements)	$782
Couple, 2 kids (with supplements)	$863

 

The numbers reveal some stark truths.

Single adults are far better off working, with a minimum wage job paying more than three times as much net as Jobseeker. Sole parents with children, however, see little difference between benefits and minimum wage work. Both deliver around $780 net a week, leaving families no better off by making the leap into full-time employment. The real lift only comes with the Living Wage, which raises net income to around $927.

For couples with children, benefit support is roughly equivalent to one adult working full-time on the minimum wage, but nowhere near the combined earnings of two working parents.

This raises important policy and employer questions. For some groups, especially sole parents, the financial incentive to move from benefit to minimum wage work is marginal. Only at the Living Wage level is the difference clear.

Even as incomes shift, household spending continues to climb. Inflation, captured by the Consumers Price Index, was 2.7% in the year to June 2025. That percentage may look modest, but in practice it erodes spending power. A median New Zealand salary of $69,836 in 2025 has the purchasing power of just $68,000 once inflation is accounted for, a real drop of nearly $1,900.

The Household Living-costs Price Index (HLPI), which looks at actual household spending patterns, puts the picture into sharper focus. Average weekly household expenditure sits at $1,598. With living costs rising by 3%, that equates to an extra $48 a week, or about $2,500 a year, just to stand still. For beneficiary households, whose costs rose by 3.3%, the squeeze is tighter still, with rent making up nearly a third of all spending.

Housing affordability adds another layer of pressure. In 2024 the median house price was $753,500, and with a median household disposable income of $38,087 after housing costs, it would take 20 years for the average household to save a 20% deposit. At the same time, 38.2% of households say their income is either “not enough” or “only just enough” to cover everyday needs.

The financial pressure households are under is increasingly reflected in how people feel about their jobs and future prospects. The Ipsos Cost of Living Report 2025 highlights that nearly half of New Zealanders (47%) are worried about job security, with women (54%) significantly more anxious than men (39%). At the same time, two in three people (65%) believe unemployment will rise over the next year.

This sense of insecurity is already shaping behaviour. Of those who are worried about their jobs, 83% say they are cutting back on spending. That reduction in household consumption feeds directly into weaker consumer confidence and, ultimately, slower economic growth. The concern is compounded by the fact that most New Zealanders expect household costs to continue climbing, particularly for essentials like food and utilities, where 80% anticipate higher bills in the coming year.

The combination of job insecurity, higher costs, and constrained spending creates a feedback loop that is difficult to break. Households tighten their belts, businesses feel the squeeze in demand, and in turn, confidence in the labour market falters further. For employers, this underscores the importance of offering not just jobs, but jobs that feel secure and sustainable.

For businesses paying minimum wage, the financial incentive for some groups, particularly parents, to enter or remain in the workforce is limited. If benefits with supplements deliver a similar income to working full-time, the decision to seek or accept employment becomes less about money and more about stability, security, and long-term opportunity.

This is significant when set against the broader backdrop of household strain. Stats NZ reports that 38.2% of households feel their income is either “not enough” or “only just enough” to meet daily needs. For these families, the difference between benefit income and minimum wage work is not transformative; it is survival either way.

That is where the Living Wage comes in. At $927 net per week for a full-time role, it provides a meaningful step up from benefits or minimum wage work. It is the level at which families can not just get by, but begin to move forward. Employers who pay at or above this level are offering more than wages, they are offering a tangible buffer against insecurity.

What these figures show is that pay, benefits, and living costs are inseparably linked. Minimum wage still pulls people out of benefit dependency, particularly single adults, but it does not always create enough margin to incentivise families to move into full-time work. Living Wage levels bridge that gap.

From our perspective at Indus Recruitment, the desperation we see among applicants to secure stable full-time employment is real. Workers who land jobs are relieved to be out of the job market and into steady work, even if those jobs are at the minimum wage. For many, it is about dignity and certainty as much as dollars.

The challenge is that while households are willing to work, the economy needs to offer more opportunities. More jobs, and better pay in those jobs, do not just improve household budgets. They build confidence, encourage spending, and provide the stability that underpins New Zealand’s economic future.