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National Party re-states its policy on the age of eligibility for NZ Super, only ACT agrees among other parties

Public Policy / news
National Party re-states its policy on the age of eligibility for NZ Super, only ACT agrees among other parties
NW
Nicola Willis by Ross Payne.

The National Party has reiterated its view that the superannuation age should not rise before the year 2044. 

This is seven years later then the 2037 date announced when the Bill English-led National sought re-election in 2017.  

But party sources make clear this is not a real change of policy, since the time scale would be the same.  

English’s planned changes were intended to start happening after 20 years, to give people time to adjust their financial planning.  

If National wins the coming election, the implementation date would begin after the same time delay:  20 years. 

The age of eligibility would then rise gradually from 65 to 67. 

The 2044 date was first unveiled by the party’s finance spokesperson Nicola Willis in May. 

Accusing Labour of irresponsibly ignoring future fiscal risks, she said National was committed to ensuring that universal access to superannuation is protected and is financially sustainable.  

The National Party is not saying how much money its policy would save, because there are too many variabilities. A large-scale project by Treasury, He Tirohanga Mokopuna, makes a similar point. It says immigration, economic growth, interest rates, birth and death rates and other factors can change the financial impact of any change in the age of eligibility of superannuation. 

But in a qualified comment, it said raising the age of eligibility from 65 to 67 by 2030 would save an expected 0.7% of GDP.  As of June, New Zealand’s GDP was $385 billion, so the saving would be $2.7 billion annually to state budgets, at today’s prices. 

According to Willis, New Zealanders are “healthier and are living longer than ever.”

But she has little support from other parties.  Only ACT is equally committed to raising the age of eligibility to 67, and much earlier than National would consider.  After reaching 67, eligibility would be indexed to life expectancy. 

The Green Party insists on superannuation being available at 65 to everyone, with some people possibly able to get it sooner if they have special issues such as a medical condition or lower life expectancy such as Maori.

The Labour Party has ruled out raising the age, as has New Zealand First. Te Pati Maori has also vowed to fight any overall rise in the age of eligibility and has argued for lower levels for groups like Maori who live shorter lives. 

The Opportunities Party (TOP) has pledged no changes in superannuation, though its impact will be diluted by a Universal Basic Income paid to everyone, at a level not far below NZ Super. 

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

79 Comments

Got to make sure it doesn't affect the boomers.

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30

As someone that is fairly old, the Boomer generation really pisses me off. What a sweet run they have had and now with a few years of good term deposit rates to see them out.

Edit: From comments, sorry, Gen X too. I just don’t understand how we think we are going to motivate and keep younger generations in NZ when we keep loading them with private and public debt. Super needs to go.

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Boomers are very quick to criticize the young for their perceived frivolousness, yet crow about having 3 mortgages at 20+% interest rates.  The generation with the biggest economic tail wind, yet still arrive at retirement needing non-means tested superannuation all funded by the next generation.  

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Do you think the rest of the world would invest or trade with NZ if we had massive government debt? I reckon our currency would be worth a lot less. 

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Government debt is purely a measure of our monetary base which is stored up in treasury bonds to help manage interest rates. The vast majority of our broad money supply is created by the banks as private sector debt and this is about $600 billion and this is the money which we mostly use to purchase our imports. Do we stop trading with other countries when their governments also carry debt and generally much higher than our own? Since QE much of the governments debt is now held by the RBNZ and which shows that it is not so much to worry about. 

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So if the NZ government put tax rates down to 0% and used debt to pay for all crown expenses, that's all good? May as well introduce a $1,000,000 P/A UBI too. And why not buy the United States and China...

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All government spending creates new money and that is why we have taxation as taxation deletes this money again after its spending. What isn't taxed back becomes a surplus which households can add to their savings and some will also go to finance our current account deficits as sectoral balances describes.https://en.wikipedia.org/wiki/Sectoral_balances 

Borrowing and debt don't finance spending as the government is borrowing back its own currency and so it must be spent first. Borrowing drains reserves from the banking system which the governments spending created and this helps the central bank to maintain its interest rate target as Standard and Poor's explain here. https://www.hks.harvard.edu/sites/default/files/centers/mrcbg/programs/…

 

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WHERE!!!!

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I think I would be more worried as a younger person as life expectancy over the next 20 years begins to drop. It will never go from 65 to 67, its more likely to go from 65 back to 60.

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this proposal protects Gen X  not the boomers

The boomer generation is 1945-1959 - all at retirement age except for those born in 1959 who will reach 65 next year.

Gen X is 1960 - 1979 and those born in 1979 (last year) will be 65 in 2044.

The Millenials 1980 - 1996  will be the first generation to have to wait until 67 to get their Super.

Meanwhile in Aussie - everybody retiring as of this year (2023)  needs to wait until they are 67 - so we will be 20 years behind Aussie on this change

 

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I am at the end of Gen X, but I wouldn't be surprised if I will pay more in tax to keep the younger Gen-X retiring early than I get from me retiring early. 

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I always thought millenials were 2000 onwards?

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No. "Coming of age" in the 2000's, not born in the 2000's.

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Ah by that point we Milennials expect that it'll be so means-tested that we won't get anything anyway. 

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7 houses Luxon is Gen X. Surely he wouldn't introduce policies that are particulary advantageous to his own personal financial circumstances?

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Millenials start with those born in 1981, not 1980

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Boomers made this Country

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"to give people time to adjust their financial planning" - rubbish, raise it by one month a year starting now. That gives people 12 years before they have to adjust their financial planning by one year, but we start making the savings now. 

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Raising by one month per year, as you are proposing, would seem quite fair to me, and it would allow enough time for people to adjust their financial planning. While National's proposal is too timid, ACT's proposal of raising by two months per year is too aggressive and it seems quite unfair to me. 

In any case, this should be equally applicable to everybody, regardless of sex, race etc. - we should, once and for all, say a clear NO to any kind of racist BS that would privilege some groups at the expense of the rest of the community for the sake of some woke ideology pushed by a small minority. 

The whole idea of differentiating by average life expectation is pretty dumb and unrealistic anyway; it would really open a world of complexity and a veritable can of worms: how about people with some physical conditions or disability that might impact life expectations, how about males versus females, etc. etc. 

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Being left-handed shortens average lifespan by 10 years (or at least it did 20 years ago).

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Maybe if you smoke (and promise not to quit) you should get your super earlier too. 

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But peoples Kiwisaver is also locked into that age. So even if they wanted to retire at 65 and cover their own costs, they possibly can't if they can't access Kiwisaver. IMO they really need to decouple the Kiwisaver eligibility age, to stop governments changing Kiwisaver, as this is essentially a Kiwisaver eligibility age change.. But it is something that few  seems to have picked up.  Having to work 2 extra years, when you may not live an extra 2 more years, means 2 less years in retirement, and 2 less years being able to spend your Kiwisaver savings.  

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Yes I have been saying that too. Give Kiwisaver a purpose by making it available permanently at 65 while also slowly lifting the retirement age. If you want to retire at 65, save for it with Kiwisaver. 

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Although that potentially means less fees for these Kiwisaver providers from those extra  two years. They would likely also  be making their maximum % fees due to the balance likely being at its highest at 65 . So I can see them trying to help  the banks make more money off taxpayers.

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Why keep it at 65? If people have saved enough to retire, why not let them retire earlier. This would allow those who are unable to continue working to stop when their bodies give out rather than at an arbitrary age. Access to Kiwisaver from age 55 and make Super only for those over 70.

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I agree, sort of, just raise it by a year or 2 now, and be done with it maybe anyone who is retired remains so. It will be short and sharp, but people will get over it, better than stretching the complaining out over the next 24 years

2044 is utter nonsense no government can guarantee anything past 3 years let alone 21 years, its a do nothing policy.

Do it, or don't! Don't waste 20 more years having bureaucrats debate the issue.

All parties are too busy handing out bribes and failing to address any real issues.

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"or lower life expectancy such as Maori" - what about males, we have almost 4 years lower life expectancy than females. How did that get overlooked I wonder?

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doesn't fit the idealogical narrative

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Stratify the Asian category and it will look different for the various groups.

Deprived ares have the lowest expectancy.

Expectancy gain is slowing.

So many issues.

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Its slowing and it will reverse based on the modern lifestyle.

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Especially with all the red bull and V consumed for brekkie and a few vapes to suck on

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I think there was a large drop in life expectancy due to Covid knocking out a lot of seniors, now reversed in most of the world which is back in an upwards trend. The US is an outlier with its own problems, mostly opioid overdoses which now kill more than traffic accidents, and mostly affects the young. 

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That is an average figure, not what each individual will actually live for. Many will live just as long if not longer. Race based eligibility for a universal superannuation  policy is not good. I am not aware of any private superannuation schemes that would do that. Yes males also. Live a shorter life on average but can also live just as long. Making these sorts of exemptions is similar to the gst exemptions.  We need to keep it simple. Remember that National said for years under Key that Super age of 65 was completely sustainable. Then they changed their minds which indicates that the situation got worse when  National were in power. That is one reason they got voted out last time as Labour reversed the policy. People quickly forget. 

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Females have won the right to be as dumb as males , so it should equalise over time. 

 

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I agree, but in reality they can be dumber as it is still socially unacceptable to punch a female in the face if she's a dickhead. 

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Fiscal Responsibility (by ensuring our property owning voters don't pay, but all the productive youth are unable to retire)

Day of the Pillow, the sooner we have total boomer death the better.

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Day of the Pillow, the sooner we have total boomer death the better.

How would you ever get your satisfaction then without seeing them suffer the policy changes that would effect them? As much as there are and have been policies voted for by, and that conveniently favoured that generation, i’m going to have to call it and say thats a tad too far. 

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Their voting block, their immense wealth, their hedonism has reflected in their governance. They inherited an extremely well governed, wealthy, high functioning society and are now exiting this world where their children and grandchildren are bankrupt, displaced and burden by the immense burden of the boomer's public and private debt. 

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National definitely trying to keep Winny & his grey power brigade out of Parliament.

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The same twenty years so no change in policy ?!?

What a moronic argument..

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I am safe 😂

But in all seriousness, bloody depressing how both the major parties avoid the really pressing longer-term issues.

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They only need to have policies for the next 3-4 years to get themselves voted in. They are again using migration for a migration led recovery but we don't even know what NZs population growth should be and what infrastructure long term is planned to keep up with the population growth 

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Originally when they announced this last year they were going to recycle the old English policy, right down to the dates, so people would have 7 less years to save which IMO showed that they hadn't put much thought into it or really understood what thy were doing but not also extending the age. So I guess extending it is better. It also affects the age that people can withdraw Kiwisaver. 

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Too late.

Ramp it up by 1-month per month starting Jan-25 so by Jan-28 the age of eligibility is 68.

Disclaimer, I'm 57 and retiring within a year. The change would adversely affect me by postponing my retirement by approx 6-months.

 

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Better check your maths there cheetah 

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That makes no sense, if you turned 65 on  2 Jan 25, you would not be eligible until you where 68, just put it up by X years in one go. If you are already on super you stay on super, finding a job 65 if you are retired might prove hard.

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I'm over this super nonsense, we could have so much more as a country if we weren't putting 21 billion into this scheme every year. Lower it to match the rate of the supported living payment (formerly invalid's benefit), and apply the same clawback rules. There's no reason old people that "can't" work due to age should get more money than young people that can't work for health reasons.

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There's a very good Infometrics article from 2014 called Aging NZ (from memory) which exactly shows the impact of demographics on house prices and savings rates - worth a read, there's a lot to take from this article. It talks about how older people staying in the workforce cancels out some of the costs because workforce participation changes, but also that they are more expensive to the healthcare system in general.  

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What about the fact they have paid tax (maybe) their entire lives?  Surely that must be worth something!

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In almost every other country that is worth nothing. 

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Except Super is a benefit for old people, not a loyalty scheme.  Given the state of the country over the last 20 - 30 years, I'd argue they're not deserving of such a generous scheme.  I've paid taxes my entire adult life too and I'm in my 30's.  

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The single pension is around $25k a year, so someone like me (born just late enough to have to have to wait till 67 if this policy goes through) will have to save an extra $50k in order to make up for this loss. According to sorted.co.nz's savings calculator, taking into account inflation and a reasonable rate of return, I'd need to save an extra $31 a week to compensate- $11 more per week than I would be getting from Nationals tax cuts. Thanks but no thanks. 

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Remember that super is taxed, so you'd only have to save ~43k to compensate for that lost 50k, but your main point still stands

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It is $25,811 after tax (M tax code) for a single living alone. 

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Marry and get less.  When we retire we should be forced to marry and help the suffering taxpayers.

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National's determination to raise the age qualification for NZ Super, and Te Paati Māori's desire to lower it for Māori, are opposite sides of the same coin. TPM is correct, as we know, in saying that Māori (and Pasifika, and many people who spend their lives in poverty) tend to die young. National's raising the qualification age for NZ Super will deprive them even more than now of years of retirement on the pension.

However, TPM's goal of lowering the age on the basis of ethnicity is discriminatory.

The qualification age should be left alone. NZ Superannuation is a social welfare benefit to provide the means of existence to those who need it in their old age. Three things are needed:

1. To help those seen as likely to die young, what is needed is not to reduce the age of NZ Super so that they can get their 20 years of paid retirement before an early death. Rather, the state must address the causes of probable early death — poverty, diet, and habits throughout life — to increase life expectancy. It is shameful that some ethnic groups tend to die 10 years earlier than others. Giving them an early golden handshake does not lessen that shame.

2. Changing lifestyles to extend lives will take generations. Many people are broken long before they reach the age of 65 and qualify for NZ Super. A means-tested and health-tested Invalid Benefit needs to be increased to equal NZ Super, and be widely available to people below 65 who need it to survive.

3. National intends to raise the qualifying age for NZ Super to ensure its continued affordability. But NZ Super, a social welfare benefit universally available to everyone over 65, now goes to many people who are among the richest and most propertied in New Zealand. National and Labour's joint crime in 1998 was to abolish the NZ Super surcharge. What is needed is to restore the surtax by putting everyone who applies to receive NZ Superannuation on a separate tax scale that would tax all other income at 50%, including the imputed income of rent saved by living in a home one owns. This would keep NZ Superannuation universally available, yet deter those who have no need of it from applying for it, assuring its continued viability for all who do.

 

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Isn't the best fix a UBI? $300 a week for everyone and don't come crying to nanny for any more. 

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A UBI has its place, but it is not enough to live on. If anything, NZ Super needs to be doubled for those who really need it: its present top rate of just under $500 a week after tax is unlikely even to cover rent for someone living in Auckland, let alone electricity, food, and clothing. A low-rate UBI encourages someone who is 20 or 40 to get out there and earn, but for someone who is 70 and without assets or other income, NZ Super is all that's left.

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Super recipients are potentially eligible for the accommodation supplement just like any other beneficiaries.

But if you can't live on super, feel sorry for those on the other benefits that are even lower.

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Not just like any other beneficiaries. The asset test is severe:

https://www.nzherald.co.nz/business/clearly-inadequate-retirement-commi…

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But the asset test isn't different for superannuitants? At least not according to that article. Are you claiming that pensioners get treated differently than other beneficiaries when it comes to the accommodation supplement, or just that they are likely to have more money? 

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But inflation would rise equalising any extra income. I’m all for income testing super, asset testing is too hard. Raising the age is good but provision needs to be made for people who can’t physically work as they get older. There should never be differences based on race also. 

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I don't think inflation is relevant: that's a consequence of overall money supply in proportion to available goods, isn't it? not the consequence of paying old folk a bigger pension. (Cafe prices might go up!)

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There is already asset testing for other benefits such as the accommodation supplement, why is it too hard for super?

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The entitlement is very strong with super recipients.  It's what happens when a generation or 2 start out with generous initiatives and then ride an economic tailwind into prosperity.  The hand becomes firmly placed in the outward position.  Many are well aware of this, which is why they try obfuscate by claiming boot straps and all that.  

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Should have been done from like 2025. Saying you’ll do something in 20 years is the same as never doing it.

If it did happen, it raises massive equity issues. Why let the big population bubble of boomers through and then make life tougher on everyone following? Except this is what’s been done for everything else.

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It’s pretty straight forward what should have happened.

National should have raised the age after Labour.

They could have:

• Made KiwiSaver compulsory.

• Raised the employer contribution. 

• Let people access part of their KiwiSaver from 65.

• Raised the age to 67 or 68.

• Give people who can’t work easy access to the unemployment benefit to get them through till 68.

If they done this the age would already be on its way to 68, the govt would have more money for health services, and we’d have heaps more money in KiwiSaver.

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If they hadn't sold off big %'s of the electricity companies, we would also have far more money for health services.

I am not sure Kiwisaver and contributions should be compulsory, because many people may end up with far more retirement savings by doing own investing and avoiding the big fees that mabt Kiwisaver providers charge in NZ. It is basically a passive income for them with many Kiwisavers, especially  if they are in cash fund or  investing in bands or passive ETFs and index funds.

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Where has National actually documented that Super age shouldn't increase until 2044? I couldn't find it on the National website, but that isn't a great website and has now search capability .

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Being a boomer does allow some extra time for reflect on life and offer some guidance for the small group of commenters who seem hell bent on hitting down on a certain age group, boomers. Before grouping every single person of a certain age you maybe should consider how everyone walks a different path. Some with good outcomes and some with not so good. So the point being I suspect you know personally of some fortunate boomers and this taints your view, maybe with a huge influence of envy which you could reflect on before further comments are made.

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I am envious, I’m envious of a generation that gets to vote itself tax cuts and a cushy retirement and then votes to yank those benefits for everyone who follows.

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Great idea. I’m still working and paying tax and you would like to remove my voting rights😂

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I do notice that many who are making the decisions will not be affected by these changes. Likewise people that own multiple investment properties are making decisions that could financially benefit themselves and potentially increase property prices. Yet one can't own shares in a company if you are a politician and are making decision that could affect the share price, so not sure why property is an exemption. Maybe we will look back in 10 years and see that yes that was crazy and we should have fixed that years ago. 

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Thanks for speaking up. The comments, a stream of bitterness and sweeping generalisation, scare me, I'm 64, had a horrible upbringing where I was told I was useless, given no life skills. Recently through counselling I learnt I have dyscalculia (explains the hopelessness with maths)and complex ptsd. No wonder I struggled with employment, fitting in, understanding how things worked; dealing with moving countries, finding niche work, losing a house in an earthquake, a child to depression.

I did manage to get things together and have assets as I enter old age. And yet, as I learn new ways of coping, I am told by younger generations that I am lucky, greedy, privileged; and that I am worthless to them.

OK, I am just collateral; loosen up voluntary euthanasia laws, then; help me at least have a quick, painless death. Given my clumsiness and inability to follow directions, I'd need professional help, and can pay for this. There'll still be enough left for the assets to go to young people, don't worry.

 

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Of course you are right that individuals have different experiences. But when people make claims about different generations or groups, they aren't making claims about every single member of that group. It can still be true that men die earlier than women, even if you can find me an example of an individual woman who died at an earlier age than an individual man. And it can still be true that a series of political decisions have been made that have largely benefitted one generational cohort at the expense of another, even if there are individual boomers who have not done well and individual millennials that have. And pointing out that these political decisions almost always seem to favour one cohort rather than another isn't 'envy'. Dismissing it as just 'envy' is really just a cheap way to shut down important discussions about policies, which should also be concerned with fairness - and we can't have informed discussions about fairness unless we are able to have discussions about who benefits and who doesn't without such concerns being dismissed as mere envy. 

 

 

 

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If we look at wealthy countries the super age is rising. In Scandic countries it's linked to life expectancy so it's rising. As our biggest cost and pay as you go it's not just about funding it's about how we spend the pie available. As the country ages health and Care will need more - where from? Theres no short easy fix but I believe the age needs to rise, it needs to be means tested, we need to increase kiwisaver contributions( and stop raiding it for rent bonds as proposed, house deposits- that's admiting defeat on the housing issue). Kiwisaver is about compounding and to make that work you need time. It's not easy but giving it time means in the future we have the wealth we want. It also means kiwisaver funds can invest long term here and we also earn income from overseas investments ie share divys and values. Effectively it could become our biggest export earner by just leaving it along. This isn't rocket science but thinking beyond this afternoon long term. Warren Buffet, Einstein et el understand so learn from people who have a proven track record and understand maths. Woops sorry talking to NZers silly me 

And as a boomer I'm quite happy to be means tested and get nothing.

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Superannuation has to change, one way or another. Everyone can see that. Except our aspiring MPs who are trying to secure the next three years of employment. 

Oh, and doesn't anyone who serves three terms in parliament get given a nice pension for life?

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National are pathetic and nearly as bad as Labour.

NZ Super at about 20% of the average wage is low by western standards and has already been under attack for many years.

The method of calculating any annual increases has also been attacked on many occasions.

All this when there have been many confirmations that National Super, as low as it is, is affordable.

Sure there may well be more pensioners in the future but normal growth should balance any increases out.

The gold card hero of keeping this minimum standard for New Zealanders is of course NZ First.

All you people who aspire to retire one day, I can assure you there will never be enough money,

Protect the status quo by party voting NZ First

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