New Zealand is often cited as having one of the most generous pension systems in the world. Almost everyone who has lived in this country for a long time can qualify for NZ Super once they reach the qualifying age.
However, as the cost of paying retirement pensions increases as the population ages, the question of what age that should be is becoming more and more vexing with each passing year. NZ Super costs are projected to increase from $18.931 billion in 2022/2023 to just over $53 billion in 2042/2043.
Let’s compare the policies of each political party below.
Labor had proposed raising the age to 67 for several years, but later backtracked.
The Labor Party insists that if it returns to power in the election, it will maintain the status quo.
The eligibility age will remain at 65, contributions to the NZ Super Fund will continue, and the Winter Energy Benefit, which gives single pensioners just over $20 a week to compensate for soaring winter electricity prices, will be maintained. Become. For a couple, he’s just over $30.
Labor will also keep pensions linked to wage growth. It is set at 66% of the regular average wage after tax.
National will raise the age of eligibility, but not for a while.
The government wants to raise the eligibility age to 67, but adjustments will not start until 2044.
Treasury spokeswoman Nicola Willis said the changes would not affect people born before 1979.
“This sensible change reflects the reality that New Zealanders are healthier and living longer than ever before. This is a fiscally responsible step.”
This is similar to an idea introduced by former National Party leader Bill English when he was Prime Minister.
The plan was to gradually change the age from 2037 and raise the age to 67 in 2040.
National will increase benefits based on CPI inflation rather than wages, while continuing to convert superannuation to 66% of average wages.
Winter energy payments and contributions to the NZ Super Fund will be maintained.
The ACT plans to raise NZ’s super age to 67 by three months a year from the 2024/2025 financial year.
Life expectancy is then indexed so that if future generations live longer, life expectancy will increase.
Leader David Seymour said New Zealand was becoming an outlier in not raising the age.
“People are living more than a decade longer than two generations ago, and fewer children are paying taxes for their pensions. That means our current approach is neither fair nor sustainable. means.
“People who are currently retired will not see any difference to this policy. People who are currently 64 years old will be able to qualify for superannuation two months later than their current plan. A person who is currently 61 years old will be eligible for retirement benefits at 65 years and 8 months instead of 65 years old. A person who is currently 51 years old will be eligible for retirement benefits after 16 years instead of 14 years old. During that time, life expectancy would increase by about 1.2 years.”
An ACT spokesperson said if linking superannuation to CPI inflation rather than wages meant pensioners would be worse off, they would either keep it as is or link it to wages. He said it would be.
He said people could withdraw their KiwiSaver funds when they turned 65, regardless of their pension eligibility age.
Winter energy payments are only available to those with a community service card.
The Greens would maintain the universal pension for all New Zealanders over 65 and increase their after-tax payments by $16 a week through a tax reset.
The company will continue to pay winter energy payments in addition to its proposed clean power payments.
Te Pati Maori
Te Pati Māori argues that age of eligibility should be linked to life expectancy. A Māori baby born today is expected to die seven-and-a-half years earlier than a non-Māori baby, so the party is proposing that Māori pensions should start to pay earlier by this margin. .
As the gap in life expectancy narrows, so too will the gap in pension age.
new zealand first
NZ First intends to keep the pension eligibility age unchanged at 66% of net average wage.
Interest relief funding will also be provided to allow Super Gold card holders to claim a 50% council interest rebate on their hoe, up to a maximum of $1600 per year.
Correction: ACT does not have a policy of suspending winter energy payments as first reported, and also warns against support for indexing CPI to inflation.