A Government programme intended to boost the income of a million households is being met with only cautious optimism, despite the fact it could immediately lift some 30,000 children out of hardship.

Agencies are warning that while the Families Package – set to launch today – is a positive first step, its benefits should not be overestimated and many families will still be struggling to make ends meet.

The $5.5 billion package , is expected to boost the incomes of an estimated 385,000 families by $75 a week by the time it's fully implemented, in 2020-21. About 650,000 families are expected to gain an average of $14 per week by that time.

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CHRIS MCKEEN/STUFF Kathleen Paraha, of south Auckland, says the Government's family package is unlikely to make a "blind bit of difference" to her situation.

That's through a range of measures, including an increase to the Family Tax Credit and raising Working for Families abatement thresholds, a "Winter Energy Payment" and a "Best Start" tax credit of up to $60 a week for a child's early years.

Increases to the Accommodation Supplement, announced in the previous government's 2017 Budget, came into force on April 1, so families receiving that payment will have already seen a bump in their pay packet, varying in size depending on the region in which they live.

But the package comes into force the same day motorists get stung in the back pocket with a regional fuel tax – up to an additional $2.50 a week added to household costs and experts seem to largely agree that will hurt lower-income families the most.

Child poverty and welfare advocates are warning that the package cannot be a one-off, with the fuel tax just one example of how inflation, rising rents and costs of living immediately begin chipping away at the gains.

South Auckland woman Kathleen Paraha said the package would not make a "blind bit of difference" to her, or others who either didn't qualify or qualified for little.

ROBERT KITCHIN/STUFF Finance Minister Grant Robertson delivered a $5.5b families package today, that was more targeted to middle and lower-income families than National's previous iteration, which included tax cuts for higher income earners too.

The Auckland Action against Poverty advocate is on her own, receiving the supported living payment and living in a Housing New Zealand home that takes $60 a week rent from her $269-a-week income.

Health issues prevent her from taking paid full-time work, but she volunteered and worked as an advocate for other low-income clients. Under the changes Paraha would only qualify for the winter energy payment – $450 a year, once fully implemented,

That equated to about $25 a week and with a fireplace her only source of heating, Paraha expected an $80 load of firewood to remain a luxury.

"The only thing I gain for is the heating, but I still can't afford to pay for the power to turn on the heating, so we're getting nowhere fast.

"Lately, I've just been hiding in the blankets." But Paraha said she was helping a number of families who were in far worse positions than she was.

On the other end of the spectrum, Auckland mother Shelby Sassienie Wolf said the boost to her Working for Families would help. With a partner unable to work for health reasons and two of seven children, from a blended family, that were still in high school, Sassienie Wolf worked full-time as a car saleswoman and had a fluctuating income of about $60,000 to $70,000 a year. She also owned her own home in Mangere.

"Any increase for families is going to be an absolute bonus. And when we think about the normal Kiwi families, we all want the best for our kids and a nice warm home to come home to."

"INCREDIBLY POSITIVE FIRST STEP"

Children's Commissioner Andrew Becroft welcomed the package, as an "incredibly positive" first step. But there were two "equal and opposite dangers".

One was underestimating the benefit it would have on families in the short term – it was expected to immediately lift at least 20,000 to 30,000 children out of material hardship.

The other was over-estimating the benefit of the package, breeding complacency and having the gains lost as inflation, accommodation costs, and other costs of living, continued to creep up.

"That won't be good enough frankly, and we'll be advocating strongly for more than a one-off. It's got to be repeated," he said.

"In the long-term, I think two things need to happen. One is that benefits for families with children need to be linked to wages – all this is doing is beginning to restore the situation to the mid 1980s, so let's not kid ourselves we're making giant progress forward. We're actually playing catchup because successive governments in the past have dropped the ball."

Salvation Army territorial social services secretary Major Pam Waugh agreed.

"The Government's onto a good start - we want that to be known. In the short term we want to work with the number of families we do, in helping to clear this overhanging debt that cripples them each week.

"Unfortunately for some of our families, this extra package each week is really just going to clear the deficit each week. We've got some families who are really struggling, so the extra $40-$60 each week may only help them break even."

Waugh said until the Government got housing right, families would continue struggling to get ahead.

Salvation Army financial mentor Damien Hazlewood said that in the short term, it would make a valued difference for many.

"Generally food is one of the first things that gets neglected. I often hear when I ask 'how much do you budget for food each week', the common answer is 'whatever's left'.

"The bills, the power, the rent is getting paid first, and the food is what's left. So this will be great for those living on a tight budget - not just beneficiaries, but low income workers as well.

THE FAMILIES PACKAGE:

A "Best Start" tax credit of up to $3120 a year, will give all parents of a newborn an extra $60 a week for the baby's first year. Families earning less than $90,000 will continue to receive some payments for up to three years.

For anyone on a main benefit, including superannuitants, a Winter Energy Payment will be available in winter, to pay power bills. Single people will get a flat payment of $450 per year, and couples $700 per year. About 1m people were expected to be eligible for it, given it was not means tested.

Paid parental leave is extended from 18 weeks to 22 weeks. That rises to 26 weeks in 2020.

Increased rate of the Orphan's Benefit, Unsupported Child's Benefit, and Foster Care Allowance by $20.31 a week.

These measures join boosts to the Accommodation Supplement which came into force in April. An estimated 135,000 households will benefit by an average $35 a per week, with some gaining as much as $70 per week for a single person, or $120 a week for a three-person household.

THE SCENARIOS:

Couple with a six-year-old and 10-year-old: Single income of $90,000

This family will get $49 more a week through working for families and winter energy payments. If they live in high cost housing area Central Auckland, they could get an additional $31 a week in the Accommodation Supplement.

Sole parent with a two-year-old: Single income of $45,000

This family would receive a $107 weekly income boost. Living in Wellington, they could get up to $30 a week more in the Accommodation Supplement depending on their rent.

A retired couple receiving superannuation: $36,452

This couple gets $32 more a week, during winter months from the winter energy payment.

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