The Value of Remittance: How New Zealand Migrants are Supporting Their Families from Afar

New Zealand By Elizabeth Rozas July 6, 2023

Supporting family and friends can be one of the most important and rewarding experiences in life. Whether you are a parent, spouse, child, sibling, or friend, looking after one another is one of the most basic and fundamental of all human traits.

Providing for friends and family can take many forms, from emotional and practical support and advice, to providing financial stability for loved ones. For many migrants who move to New Zealand, being able to support their family by sending money is one of the primary reasons why they choose to relocate; to help provide, and to offer a better life for their loved ones.

Our new report – The Value of Remittance – looks to shed light on the real-world impact of remittance payments and how migrants and global money transfer is helping to make a difference to the lives of families across the world.

What is remittance?

‘Remittance’ originates from the word ‘remit’, which means ‘to send back’. A remittance is essentially a transfer of funds between two parties. While it can encompass various types of monetary transfers, it typically describes sending money to another country. This usually involves sending funds to family members living overseas, whether as a gift, or a contribution towards household bills.

Remittance payments are a vital lifeline to many

Our research found that for many families of migrants living in New Zealand, remittance payments are a crucial helping hand that can have a major impact on their quality of life. Our study found that over a quarter (26%) of migrants living in New Zealand believe their friends or family would be in poverty if it wasn’t for them sending regular payments back home and that 41% state that members of their family would not be able to afford medical treatment.

Our study, which surveyed migrants living in New Zealand, demonstrates the positive affect that remittance payments have on families around the world. The report found that 56% of migrants believe that their friends or family have more opportunities in life due to the money that they send and 55% believe that their education has improved vastly as a result of their remittance payments.

How much do migrants send home?

On average, migrants were found to send 11% of their annual income home as remittance.

What are remittances used for by families of migrants living New Zealand?

The primary reasons stated were being able to being to contribute towards their family’s food bill (54%), healthcare costs (51%) and education fees (33%). 87% of migrants were found to have sent money to family back home in the past 12 months and 41% of migrants state that being able to send money to family back home was a key factor in their decision to move to New Zealand.

The most common uses of remittance amongst families of migrants:

  1. Groceries (54%)
  2. Healthcare (51%)
  3. Education (33%)
  4. Accommodation (25%)
  5. Paying off family debt (22%)
  6. Transport costs (15%)
  7. Paying towards family childcare (15%)
  8. Supporting a family members business (14%)
  9. Paying towards family wedding costs (10%)

How is remittance being used by friends of migrants living in New Zealand?

Many migrants were also found to send remittance to their friends too, with the primary reasons being to support with the cost of healthcare (54%), groceries (45%) and accommodation (36%). 28% of migrants stated that their friends rely on the money that they send.

The most common uses of remittance amongst friends of migrants:

  1. Healthcare (54%)
  2. Groceries (45%)
  3. Accommodation (36%)
  4. Education (30%)
  5. Supporting a friend’s business (27%)
  6. Paying off a friend’s debt (25%)
  7. Paying towards wedding costs (25%)
  8. Paying towards childcare (20%)
  9. Transport costs (18%)

The pressure of providing back home

Our study found that amidst rising inflation, many migrants are struggling with the pressure of providing for their families and friends back home. A third (33%) of migrant’s state that they have had to work extra hours or have started another job to continue sending remittance payments and 56% say that they have had to reduce the amount of remittance that they send due to rising living costs. A third (33%) reported that they were concerned about the possibility of losing their job in the next 12 months and the impact this will have on their families back home.

Top 10 countries migrants living in New Zealand are sending money to:

  1. China
  2. India
  3. Philippines
  4. United Kingdom
  5. France
  6. Germany
  7. Fiji
  8. Australia
  9. Korea, Rep.
  10. Samoa

(Source: KNOMAD/World Bank Bilateral Remittance Matrix)

Our study found that this pressure is having a profound strain on the mental wellbeing of migrants living in New Zealand. 39% state that the responsibility of having to support their family or friends can sometimes be too much to bear and 43% of migrants say that they regularly make sacrifices in their own life to ensure that they are able to continue sending money to their friends or family. 38% also reported that they often feel lonely, suggesting many are prioritising work over building their own personal relationships.

Many (48%) migrants surveyed reported that without moving to New Zealand they may not have been able to support their friends or family financially, with 41% stating that it was a key factor in their decision to move to the country.

Trusting the right provider with your transfer

Choosing the right money transfer service is crucial when sending remittance, as it can make all the difference in ensuring that hard-earned money reaches family and friends quickly and securely. The thought of their loved ones being left without the support they need is devastating for many migrants, which is why selecting a trustworthy provider carries immense weight for many.

We asked which factors are most important when it comes to transferring money, and the responses showed the following order of priorities:

  1. Security of transfer
  2. Speed of transfer
  3. Convenience of sending money
  4. Cost
  5. Being able to do it online
  6. Convenience of receiving the money
  7. Ease of using the service
  8. Being able to do it in person

For more information on international money transfer, please visit our advice page or find a location near you.