Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Should the residency requirement increase for NZ Super?

Friday October 28 2016

Should the residency requirement increase for NZ Super?


A new paper investigates the issues around people who move to New Zealand and become eligible to receive NZ Superannuation.

It raises concerns about the length of time people need to be in the country before they can receive Super, as well as questioning the fairness of some of the other policy settings, including deductions of overseas pensions.

At the moment, NZ residents are eligible for Super if they have lived here for 10 years after the age of 20, including five after the age of 50. The average residence requirement to receive minimum benefits in OECD countries is 26 years.

The paper on overseas pensions and criteria for NZ Super was written for the Commission for Financial Capability by the Retirement Policy and Research Centre at Auckland University.

It forms part of the work being produced as part of the Retirement Commissioner’s three-yearly review of retirement income policies. Diane Maxwell will release her recommendations for policy change before the end of the year.

The paper found an increasing number of people who qualify for Super have deductions from their overseas pension. In 2016, 11.9%, or 84,000 people out of the 705,000 receiving NZ Super, had deductions from overseas pensions.

It also concluded that the spousal provision policy was unjust; this is where a person’s overseas pension is not only deducted from their own Super but any excess is deducted from the Super of their partner or spouse.

And it raised the question of whether it is fair and reasonable to include voluntary and employee contributions overseas, similar to schemes like KiwiSaver, in the overseas deduction policy.

It gives four options for reforming the current policy which can be found at the end of the paper.

Background notes and stats for Review:

• The amount deducted from overseas pensions in the year to March 2016 was $342m.

• When the Old Age Pension was first introduced in 1898 the residency test was 25 years and was later reduced to 20 years in 1938 and then 10 years in 1977.

• The number of people aged 65 and over will double in the next 30 years (by 2046).

• NZ’s dependency ratios are declining: for every person aged 65+ there are currently 4.4 people aged 15-64 years, in 2035 that number is expected to drop to 2.8.

• The Commission is considering retirement income policy settings and wants public feedback; we are inviting people to take part in a survey on the future of Super. The survey can be completed on the cffc.org.nz website.


ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


MBIE: NZ space sector set to star in Moon mission
The New Zealand space sector is set to star in NASA’s CAPSTONE moon mission – with Rocket Lab launching a satellite to the Moon from New Zealand in June, and the lift-off of a separate NASA-NZ lunar research project... More>>



Air New Zealand: Relaunching 14 International Routes In 16 Days

Air New Zealand is gearing up for the busiest July in two years with the relaunch of 14 international routes in 16 days... More>>



Inland Revenue: Update On Hidden Economy Real Estate Campaign

The Inland Revenue campaign focussing on the real estate sector has resulted in a drop in the amount of private expenses claims being made... More>>


Entrust District: Dividend Will Be Welcomed After Another Tough Year
We’ve all heard of the saying; “if it sounds too good to be true, it probably is” but for Aucklanders within the Entrust District, getting their share of Entrust’s 2022 annual dividend payment really is as good as it sounds... More>>

BusinessNZ: NZ Economy - Prevailing Headwinds
The latest BusinessNZ Planning Forecast reveals business and consumer confidence is low, with factors at home and abroad hampering our recovery... More>>


Specialist Cheesemakers Assn: Shared Cheese Heritage Should Be Shared Not Stripped

As the EU-New Zealand FTA advances New Zealand cheesemakers are urging both Governments to recognise and celebrate the shared cheesemaking heritage that exists between European countries and New Zealand... More>>