Benefits, KiwiSaver to be means-tested — so why aren't pensions?
A Government decision to means-and-income-test support available to children and younger people, but not alter the eligibility for NZ Super, has prompted questions from some commentators.
As part of Budget 2025, the Government announced it would income-test eligibility for the Best Start payment in the first year of a child's life.
This will affect about 60,000 families who previously would have been able to access the money, before being income tested in the child's second and third year.
Teenagers who are receiving JobSeeker benefits will be assessed against a "parental assistance test" which will determine whether their parents could provide them financial support.
The member tax credit in KiwiSaver will be halved and not available to anyone earning over $180,000.
But anyone earning at that level was still entitled to the full NZ Super payment.
"As one of my team members commented — this Budget was all about taking away from young people and giving to the older generation [through] extra cancer treatment, rates relief for Gold Card members and continuation of NZ Super," said Rupert Carlyon, founder of Koura KiwiSaver.
"For young people, we are now means testing KiwiSaver contributions, Best Start payments and not providing welfare to those under the age of 20."
He said younger people would also be affected by a lower level of investment in infrastructure.
Financial journalist Frances Cook told Breakfast she was 'very concerned' by some of the changes made to KiwiSaver. (Source: Breakfast)
"The Budget is described as a budget forcing people to pay their own way where they can. Though NZ Super remains untouched, despite hundreds of thousands of Kiwis receiving it that do not need it."
He said NZ Super should be means tested in the same way but it was not politically feasible for the government to do so.
"Young people need to be better at voting to drive through change that benefits them."
Shamubeel Eaqub, chief economist at Simplicity, said he too thought it was interesting that the KiwiSaver incentive would not be available to people earning more than $180,000 but no such test applied to the pension, which costs nearly $25 billion a year.
"It's incoherent... incentives for Kiwis to save for their future is means-tested, but New Zealand Super — which is universal welfare for older people — is untouched."
Asked on Nine to Noon her thoughts on means-testing superannuation, Nicola Willis said it was not the Government's policy.
"We remain committed to universal New Zealand superannuation."
She said National had not yet had a caucus discussion on changes to superannuation.
"But I'm on the record at the last election campaign that we campaigned for the age of eligibility for New Zealand superannuation to be lifted. That was to make New Zealand superannuation more affordable, and more sustainable, and to reflect the fact that New Zealanders are working for much, much longer. We campaigned on that because I believe it was the right thing to do… Labour weaponised that against us."
rnz.co.nz
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