About 14,000 caregivers looking after 22,000 children in and outside the state care system will receive an extra $25 a week.
In a post-Budget announcement, the Government will give caregivers looking after children unable to be cared for by their parents an extra $210 million over the next four years.
That funding is broken down into:
• Increasing the Unsupported Child's Benefit (UCB), Orphan's Benefit (OB) and Foster Care Allowance (FCA) by $25 a week per child. This is expected to cost $143.1 million over four years.
• Allowing caregivers who may provide care for less than 12 months to access the Orphan's Benefit and Unsupported Child's Benefit, costing $46.6 million.
• Extending Birthday and Christmas Allowances, which are currently only available to caregivers caring for children in state care, to those receiving the UCB and OB, costing $16.8 million
• Increasing paid respite care from two to 20 days per child for caregivers of children in state care, costing $3.2 million.
• Budget 2020: Government's $50b Covid-19 recovery Budget biggest spending package in history
• Budget 2020: How did it measure up? Five views
• Budget 2020: New Zealand's law and order budget by the numbers
• Budget 2020: Budget at a glance - the big Covid 19 package and how hard has it hit
The benefits are set to increase from July 6 while the increase in paid respite days is set will be implemented from June.
Children's Minister Tracey Martin said people looking after someone else's children in and outside the state care system "do a hugely important job that needs to be recognised and supported".
The additional funding is in response to a review of financial assistance for caregivers which was launched in May last year.
Martin said the clear message was "more help was needed" and Covid-19 had made addressing the issue more pressing as caregivers faced the same financial pressures as every other New Zealander.
"This financial commitment will help to ensure that children and young people being cared for by extended family and whānau or non-kin carers can have the same opportunities we want for all kids in New Zealand.
"It's also really important to recognise that not all care is for an extended period and that caregivers sometimes need a break.
"Some caregivers provide homes for children with complex and challenging needs. Their role is 24/7 and while rewarding, both they and the child they care for deserve to be able to have some time off."
Changing the rules around respite care is estimated to benefit more than 2800 caregivers who care for about 4700 children in state care.
Increasing respite care days for caregivers which care for a child for less than 12 months will require a legislative change and a Bill is planned to be introduced this term.
Before the $25 increase, the untaxable benefits for the Foster Care Allowance, Orphan's Benefit and Unsupported Child's Benefit are currently:
0-4 years - $175.71
5-9 years - $200.55
10-13 years - $219.11
14+ years - $237.59