Struggling families will get a massive cash boost when inflation-busting increases to financial assistance and daycare benefits are introduced this year.

The increases include a rent allowance rise of almost 25 per cent — from $1,450 a month to $1,800 a month for people on financial assistance — while nursing and rest home rates will also go up.

The number of people eligible for child daycare support from the Government is expected to expand under a new, tiered qualification structure and payments will also increase.

Presenting the changes in the House of Assembly yesterday, Jason Hayward, the Minister of Economy and Labour, said that the increases were long overdue.

Referring to financial assistance amendments, he said: “The purpose of these amendments is to increase the benefits for recipients, to ensure that the rates better reflect the cost of living in Bermuda.

“The Table of Allowable Expenses was last amended in April 2014 and no longer provides adequate support to those who are most vulnerable in our community.

“Cost-of-living expenses have increased tremendously since the last amendment and as a result an extensive review was carried out to determine the level of assistance required to lessen the burden for recipients on the financial assistance programme.”

Mr Hayward hoped the changes would have “a significant positive impact” on the more than 2,000 people claiming financial assistance.

The amendments include:

• A 24 per cent rent allowance increase for a one-bedroom property from $1,450 to $1,800

• A 15 per cent disability allowance increase from $650 to $750 per month

• Funeral expenses will increase by 33 per cent from $3,000 to $4,000

• Nursing home rates will increase by 20 per cent from $5,000 to $6,000 per month

• Rest home allowance will increase by 25 per cent from $4,000 to $5,000 per month

Mr Hayward said other changes had been made to benefits for electricity, food allowances, eye-care exams, podiatry fees, telephone fees and water fees.

In a separate statement on child daycare benefit increases, Mr Hayward said reforms would help households to cope with the rising costs of daycare and to minimise the risk of families having to decide between child daycare services and work.

He added: “This additional support is paramount to sustaining households and ensuring children are on a developmental continuum from the earliest years.“

Under the revised system:

• Those with an annual gross household income up to and including $65,000 may be eligible for a maximum monthly allowance of $900 per month per child

• Those with an annual gross household income between $65,001 and $97,000 may be eligible for a maximum monthly allowance of $700 per child

• Those with an annual gross household income between $97,001 and $130,000 may be eligible for a maximum monthly allowance of $500 per child

The changes for both financial assistance and childcare will come into effect on October 1.

Mr Hayward said: “This increased benefit complements the duty-free concessions the Government has recently extended to daycare facilities.

“The two initiatives demonstrate the Government’s commitment to improving quality and access to daycare for Bermuda’s families. Protecting early childhood education is vital for individuals’ lifelong wellbeing and for the sustainability of our economy.

“The Government will continue to be dutiful and deliberate when providing support intended to ensure that members of our community can meet their basic needs.”