Restoring Pay Equity Could Boost 91,000 NZ Families by Nearly $300 a Week, PSA Analysis Says

Around 136,000 New Zealand children across almost 91,000 families could benefit financially if cancelled pay equity claims were restored, according to new analysis released by the Public Service Association.

The PSA estimates affected families with dependent children would collectively receive about $1.39 billion more in gross income each year, equivalent to an average increase of approximately $293 a week per family before tax.

The analysis also estimates around 11,000 children in affected working households are currently experiencing material hardship, although whether all of those children would move out of hardship as a result of higher household income cannot be determined from the modelling alone.

The findings add a new dimension to the continuing political argument over the Government’s 2025 changes to New Zealand’s pay equity system, shifting some of the focus from workers’ wages to the children and households potentially affected by those changes.

What does the new analysis claim?

The PSA’s modelling starts with approximately 180,000 predominantly female workers it says were covered by pay equity claims cancelled in 2025.

Because there is no direct dataset showing exactly how many dependent children live with those workers, the PSA used 2023 Census data to model their likely household circumstances.

Its calculations produce the following estimates: 

Pay equity would improve the lives of 136,000 New Zealand children_PSA analysis.pdf

Estimated impact	PSA analysis
Workers covered by cancelled claims	180,000
Estimated affected households	175,000
Families with dependent children	90,875
Children in those families	136,024
Children estimated to be in material hardship	10,882
Additional annual gross income across affected workers	$2.67 billion
Additional annual income for families with children	$1.39 billion
Average increase per affected worker	$284 a week
Average increase per family with children	$293 a week
Average increase per affected child	$195 a week

All income figures are before tax.

How did the PSA reach 136,000 children?

This number is an estimate rather than a direct count.

The PSA model assumes the workers affected by the cancelled claims broadly resemble other working New Zealand households when it comes to having dependent children.

Census data used in the analysis shows about 52% of families or households with wage and salary earners have children.

Applying that proportion to approximately 175,000 estimated affected households produces about 91,000 families with dependent children.

The Census data gives an average of around 1.5 dependent children per family with children.

That produces the final estimate of approximately 136,000 children.

The PSA says it deliberately used general working-family rates rather than assuming that the predominantly female workforces affected by pay equity claims were more likely to have children.

Where does the $300-a-week figure come from?

According to figures attributed to Treasury in the PSA analysis, pay equity settlements would collectively increase affected workers’ gross incomes by approximately $2.67 billion annually.

That works out to approximately:

$14,833 a year per affected worker, or around $284 a week before tax.

For the estimated 90,875 affected families with children, the PSA calculates an average annual increase of $15,257 per family, equivalent to approximately $293 a week.

Across the estimated 136,024 children, the calculation represents approximately $10,193 a year, or $195 a week per child.

Those figures should not be interpreted as a payment made directly to each child. They represent the additional family income allocated mathematically across the estimated number of children.

Why is pay equity such a major issue in New Zealand?

Pay equity is different from simply requiring men and women performing exactly the same job to receive equal pay.

It is designed to address systemic undervaluation of work performed predominantly by women.

That is particularly relevant in occupations such as care and support work, education support and other female-dominated sectors where the argument is that wages have historically been suppressed partly because of gender-based undervaluation.

The controversy intensified in May 2025, when the Government changed the Equal Pay Act and existing pay equity claims were discontinued under the new framework.

The changes affected claims covering tens of thousands of workers and triggered strong opposition from unions.

The Government has argued that the previous system needed a clearer and more robust process for establishing pay equity claims.

Unions, including the PSA, have argued that the changes effectively removed years of work towards higher wages for predominantly female workforces.

What does this have to do with child poverty?

This is the central argument of the PSA’s latest analysis.

Instead of looking only at how much individual workers could receive, the union attempted to calculate how many children live in households supported by those workers.

Using a material-hardship rate of approximately 8% among children in working households, its modelling estimates that around 10,882 children in affected households could currently be experiencing material hardship.

Rounded, that becomes approximately 11,000 children.

The PSA argues that substantially increasing their parents’ wages could lift many of these children out of hardship.

However, there is an important distinction.

The modelling estimates how many children experiencing material hardship are likely to live in affected households. It does not individually assess those households or demonstrate that every one of those approximately 11,000 children would cross the official hardship threshold following a pay increase.

The broader argument is nevertheless straightforward: higher household income would increase the financial resources available to families affected by the pay equity changes.

PSA compares pay equity with FamilyBoost

The analysis also makes a deliberate comparison with the Government’s FamilyBoost programme.

According to figures cited by the PSA, just over 60,000 families claim FamilyBoost each quarter, receiving an average of approximately $47 a week, while fewer than 2,000 receive the maximum equivalent of $120 a week.

Against that, the PSA estimates restoring the affected pay equity settlements would increase gross household income for affected families with children by an average of approximately $293 a week before tax.

Comparison	PSA figure
Average FamilyBoost support	About $47 per week
Maximum FamilyBoost received by fewer than 2,000 families	$120 per week
Estimated average pay equity income increase	About $293 per week before tax

The two policies are not identical and should not be treated as direct substitutes.

FamilyBoost is a government payment designed to help eligible families with early childhood education costs, while pay equity concerns wages earned through employment.

But the PSA is using the comparison to argue that wage increases flowing from pay equity could have a substantially larger financial effect for the households covered by those claims.

“This is who the Government has really hurt”

PSA National Secretary Fleur Fitzsimons said the figures showed that the consequences extended beyond the workers whose claims were affected.

She argued that restoring pay equity would not only address the historical undervaluation of female-dominated work but could also improve living standards for thousands of children.

“This is who the Government has really hurt, 136,000 children whose families are doing it even tougher in a cost of living crisis because this Government tore up their pay equity claims,” Fitzsimons said.

She also criticised the Government for promoting FamilyBoost while changing the pay equity framework.

The language used by the PSA is strongly political, particularly as New Zealand heads towards an election, and represents the union’s position rather than an independent finding that the Government intentionally sought to reduce household incomes.

PSA also claims a wider economic benefit

The latest child-focused analysis follows earlier PSA work examining the wider economic impact of pay equity.

The union says Treasury modelling indicated the settlements could contribute around $13.5 billion to GDP over four years and support approximately 13,000 additional jobs.

The PSA says that would represent approximately $2.25 in additional economic activity for every dollar spent.

Interestingly, the latest estimate of 136,000 children does not include children living in households that could potentially benefit from those additional jobs.

The PSA says it did not attempt to model that secondary effect.

The modelling has limitations

The PSA itself acknowledges an important limitation.

There is no direct statistical breakdown showing exactly how many children belong to workers whose pay equity claims were cancelled.

Instead, the analysis combines union estimates of the number of affected workers with Census household data and child-poverty statistics.

It assumes affected workers have approximately the same likelihood as other working New Zealanders of:

• having dependent children;
• living in one or two-adult households;
• and experiencing material hardship.

The PSA argues this is a conservative approach because many affected occupations are predominantly female, contain large numbers of workers aged 30 to 54, and include significant part-time work, characteristics that could mean a higher proportion have dependent children.

But without individual household-level data, the 136,000 figure remains a modelled estimate rather than a measured total.

That distinction is important when interpreting the findings.

A wage debate that now reaches well beyond workers

Pay equity has traditionally been presented as a workplace issue: whether female-dominated occupations have been systematically undervalued and, if so, what employers and the Government should do about it.

The PSA’s latest analysis attempts to broaden that debate.

Its argument is that wages do not stop with the worker receiving them.

They affect rent and mortgage payments, groceries, electricity bills, childcare, transport and the financial security of entire households.

If the modelling is broadly accurate, approximately one in eight New Zealand children could live in a household affected by the cancelled pay equity claims.

That makes the argument over pay equity much larger than a dispute between unions and the Government over employment law.

It becomes a debate about household income, child poverty, government spending and what value New Zealand places on work performed predominantly by women.

With an election approaching, those questions are unlikely to disappear.

And for the estimated 91,000 families at the centre of the PSA’s analysis, the difference being debated is not small.

It is close to $300 a week before tax.