Latest news with #NZSuperannuation
Newsroom
2 days ago
- Business
- Newsroom
NZ's means-testing creep
Whatever age we're at, means testing for benefits is creeping into our lives. From the Best Start allowance for parents of newborns, to the parents of teens applying for Jobseeker, and those in KiwiSaver earning over $180,000. But when it comes to the old age pension, means testing is too touchy politically, says NZ Herald political editor Thomas Coughlan. He tells The Detail why the pension is off limits, for now. 'There are things we get universally. Universal free education, a lot of health services are free. But cash payments, those are mostly means-tested with one big exception.' Every New Zealander who hits 65 is entitled to NZ Superannuation. 'You could be a billionaire or you could have absolutely nothing and you will get it. 'Culturally, politically we tell ourselves that we earn superannuation, we work hard we pay taxes our whole lives and when you retire you deserve to get the benefit from the government that you have paid for for your entire working life. That is the political bargain, I guess, at the heart of superannuation.' Means testing superannuation is also not as straightforward as other benefits where Inland Revenue knows exactly how much beneficiaries or their parents earn. But most superannuitants don't work, making a means test on income difficult to manage. That leaves asset or wealth testing, 'which is just uranium wrapped in barbed wire'. Coughlan says raising the retirement age is seen as the better of 'two horrible options' and National has already signalled plans to gradually raise it to 67. But that is also fraught. The Retirement Commissioner Jane Wrightson doesn't like either option but is 'more keen on the consideration of means testing than I am of raising the age'. 'But if that became a thing (raising the retirement age) then I would be arguing that it's a really comprehensive and well-thought-through policy change that considers a retirement system as a whole, not just about NZ Super, not just about KiwiSaver but the impact overall on future citizen New Zealand pensioners,' Wrightson says. She calls the debate around superannuation a gender issue. 'The commentators are mainly men. The issues around NZ Super, and who gets it and when, need to be looked at with a really strong gender lens because women are the ones who get disproportionately affected.' The Detail also talks to pensioner Doug Beever in Australia where the pension kicks in at 67 and is means-tested. Beever says he's happy with the arrangement because all of his working life he has been paying into a private retirement fund, a compulsory version of a KiwiSaver scheme that has been in place for decades. Wrightson says that is the difference between the two countries and why we can't copy Australia's pension model. The historic superannuation plan is a reason why the country is quite well-off, 'because those funds are in the billions and billions now. And secondly, people have got a decent pot themselves, so when you get that you can absolutely then talk about means testing, you can talk about raising the age … you've got more levers to your bow when your citizens have been protected by a decent regulatory environment. 'This is not what's happened here.' Check out how to listen to and follow The Detail here. You can also stay up-to-date by liking us on Facebook or following us on Twitter.
NZ Herald
22-05-2025
- Business
- NZ Herald
Budget 2025: Rates rebates, business tax changes will add up, Whangārei Mayor says
'The big thing is that they haven't cut anything. The hospital is still on the cards and investment into the roads is not being cut.' Cocurullo said improvements to the rates rebate scheme will make a big difference in Northland. The threshold change means every SuperGold cardholder with NZ Superannuation as their only income and rates higher than $2000 will be eligible for the full rebate. The maximum rebate will also increase from $790 to $805 a year. Whangārei has very high numbers of people applying for the rates rebate each year, including people living in retirement villages who own their own units, Cocurullo said. 'We have a huge amount of rates rebates – it's nice to have a little bit more for some of those who need it.' The Investment Boost tax package will be relevant to lots of small businesses around Northland, Cocurullo said. The $1.7b-a-year package will allow businesses to deduct 20% of the cost of new asset – such as machinery, vehicles and technology – on top of depreciation, meaning a lower tax bill in the year of purchase. This will encourage business investment and help productivity in Northland – where businesses tend to run on the smell of an oily rag, he said. However, NorthChamber chief executive Leah McKerrow was more muted about the Investment Boost, saying it was unlikely to make much difference in the short term. 'It assumes that people will be able to afford to purchase new assets in the first place. It will be great if companies can afford to invest but do they have the capital?' Another concern was the changes to KiwiSaver, she said. The Government is halving its yearly contribution from $521 to $260.72. However, the default rate of employee and matching employer contributions will rise from 3% to 4% of salary and wages, phased in over three years. McKerrow was concerned about how businesses will pay for this increase, as they have no extra funds, and could look to pay for it by employing people on a lower wage. Overall, she thought the Budget was restrained and unlikely to lead to much growth in the short term. However, that meant the Budget would not add to inflation, helping to keep interest rates down, which would be good for business, she said. Advertisement Advertise with NZME. Liz Cassidy-Canning, chief executive of charity Whare Āwhina, was more forthright in her opinion of the Budget, calling it disappointing. 'Our most vulnerable are invisible in it,' she said. Cassidy-Canning was pleased $15 million was included in the Budget to fund community-based food banks, like Whakaora Kai Food Rescue Northland, for another year. But she said the need in Northland is high and families in need are still missing out. Changes to Working for Families – in which eligible families will get an extra $14 a fortnight – will not even cover the rising cost of living, she said. Changes to pay equity claims – which were revealed to save the Government $12.8b – will have an impact on low-paid women workers, Cassidy-Canning said. 'Pay equity does make a huge difference nationwide. We can see it was a cost-cutting exercise, there's no other way to see it.' Cassidy-Canning said she would have liked to see more funding for community organisations, which are able to prove the positive impact they have for the community's most vulnerable people. 'Community organisations are working really hard, we need the Government to recognise that. Come and measure our impact.' She was also disappointed more funding has been set aside for boot camps for young serious offenders, despite a trial where two of the 10 young people absconded. Cassidy-Canning said everyone will have to wait and see to understand the impact of a new Social Investment Fund, which is allocated funding of $190m. Another area where Northlanders will have to wait and see is over more funding for the 2023 weather events. A further $219m funding was announced to repair local roads, with a focus on councils in the eastern North Island. However, Cocurullo said it is still possible Northland councils could be eligible for more funding too. Whangārei alone has some $20m of recovery work still to be done, he said. Do you have questions about the Budget? Ask our experts – business editor at large Liam Dann, senior political correspondent Audrey Young and Wellington business editor Jenee Tibshraeny – in a Herald Premium online Q&A here at at 9.30am, Friday, May 23.
NZ Herald
22-05-2025
- Business
- NZ Herald
Budget 2025: Every budget item in one interactive
This year's Budget details $187,993,985,000 of government spending. That's nearly $200 billion dollars. The interactive below shows this spending is shared around. See how the Budget's major spending categories have changed since last year's Budget. Click on a category title to see how spending has changed since 2014. Or click on a category to drill down into the 1316 low-level categories used to group government spending. Many of the spending announcements for the budget cover multiple years of spending. The spending in this interactive is just for a single year. Budget spending is grouped by categories the Treasury calls 'votes'. The groupings in the interactive above are based on votes with the following modifications: Spending on NZ Superannuation has been separated from the rest of 'Social Development' spending. The new Defence and Defence Force spending has been combined. Spending on Corrections, Court, Justice and Police has been combined. All votes where total spending is less than $1b have been combined into 'Other spending'. Individual spending allocations in the Budget are called 'appropriations'. If you click on any of the categories above you can see the individual appropriations. Due to a large non-cash change in the accounting related to veterans' entitlements the appropriations Service Cost - Veterans' Entitlements has been excluded from the interactive. at 9.30am, Friday, May 23.
NZ Herald
14-05-2025
- Business
- NZ Herald
Listen to The Country online: Christopher Luxon on why he hasn't been to China yet
Today on The Country radio show, host Jamie Mackay catches up with Prime Minister Christopher Luxon to ask him why he hasn't visited China yet. On with the show: Christopher Luxon: The Prime Minister responds to criticism that he has yet to visit China, and ponders Trump's latest tariff move. We also discuss why we should stay in the Paris Agreement and whether we're flogging the family silverware to pay for NZ Superannuation.
Scoop
22-04-2025
- Business
- Scoop
Little Known Law Offers Savvy Kiwis The Opportunity To Supercharge Their Retirement Savings
Press Release – XtraPension Not many people are aware that on November 9, 2020, New Zealand law changed such that any part of a UK State Pension gained from making voluntary contributions is no longer deducted from NZ Superannuation. A little-known legal amendment is being leveraged by savvy New Zealanders and expat Brits to supercharge their retirement savings. Not many people are aware that on November 9, 2020, New Zealand law changed such that any part of a UK State Pension gained from making voluntary contributions is no longer deducted from NZ Superannuation. 'That means that New Zealanders can effectively claim two retirement incomes (plus any KiwiSaver or other private income they may have),' says John Ring, Operations Director of XtraPension – an Irish based company that helps people around the world to maximise their UK State Pension. To qualify for the UK State Pension, you must have worked in the UK for at least three years. The opportunity is available to men born after April 5, 1951 (i.e. aged up to 74), and women born after April 5, 1953 (i.e. aged up to 72). To get any pension, you need a minimum of 10 years of National Insurance contributions, and to receive the full pension, you need 35 years of NI contributions. But the kicker is that you can buy up to six past years of any missing contributions, plus future years of contributions to get as close to your desired maximum years. National Insurance is a system of contributions paid by UK workers and employers, as well as self-employed people, to fund various social security benefits, including the pension. How much does it cost to bolster your UK State Pension? The cost of buying a year varies depending on whether or not you've been working since 2019 outside the UK. Most New Zealanders and expat Brits can buy six past years at NZ$400 per year = $2,400 once-off cost. It is also possible to buy years annually into the future, all the way up to the age of 67 to maximise your pension. Each year purchased from the UK Government at $400 equates to $700 per year in pension, so for example, 10 years of NI contributions would provide $7,000 per annum in pension payments payable from the UK Government. 'For someone who needed to buy 10 missing years, it would cost them only $4,000 which would pay them $7,000 annually from the age of 67 for the rest of their life,' says Ring. 'Over a typical 20-year retirement (to age 87), this investment strategy would be worth $140,000. Not bad for a $4,000 investment.' Most people who qualify will get a guaranteed $40 back for every $1 they pay to the UK government over a 20-year retirement. 'Interestingly, the rules are different for people outside the UK, and it is much cheaper to buy voluntary NI contributions outside the country, though the pension is not indexed and is frozen from the date it is first claimed,' says Ring. 'This 'frozen pension' issue impacts 600,000 people around the world and there is a big campaign underway to change it. Regardless, financial experts say it is still a very worthwhile financial decision for people in New Zealand and an excellent return on investment.' Information required to claim a UK State Pension Firstly, check your eligibility here: Your old UK National Insurance Number – see 5 ways to get it here The name, address, and work dates of your last UK work (even if the company is defunct) When you left the UK What you've been doing since 2019 (or later if you left the UK later) including employer details and dates Ring says the process is very nuanced and it is easy to fall through the cracks. 'Up to 500,000 New Zealanders and expat Brits in New Zealand are eligible to claim this potentially life-changing pension, but it requires some finesse to ensure you get the best possible outcome,' he said. 'That's why we set up XtraPension as we want to help as many people as possible to maximise their UK State Pension so they can enjoy a much more comfortable life in retirement.' o find out more about how to maximise your UK State Pension, visit XtraPension, WhatsApp +353 83 123 4000 and watch this video:
