NZ Super Changes

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JayADee

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#265521 25-Jan-2020 10:59

Unqualified partner no longer included.

This is a really big change happening under the radar!

https://www.stuff.co.nz/business/118933472/pension-changes-remove-extra-payments-for-nonworking-younger-partners

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#2406506 25-Jan-2020 11:35

Tinkering around the edges is pointless.
The retirement age needs to be raised and means-tested before the whole super system is unsustainable
Delaying those decisions is just going to make the medicine worse.
These PMs saying “super won’t be changed under my watch” are gutless populists.

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MikeB4

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#2406515 25-Jan-2020 12:21

nathan: Tinkering around the edges is pointless.
The retirement age needs to be raised and means-tested before the whole super system is unsustainable
Delaying those decisions is just going to make the medicine worse.
These PMs saying “super won’t be changed under my watch” are gutless populists.

The administration costs of means testing ALL super applications and subsequent reviews would be enormous. The cost of means testing the current means tested income support is huge but tiny compared to testing Super. MSD would triple in size with considerably more branches needed.

nathan

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#2406659 25-Jan-2020 15:25

Bankrupt banana republic it is then.

MikeB4

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#2406730 25-Jan-2020 16:10

nathan: Bankrupt banana republic it is then.

What a load of rubbish or trolling or both

nathan

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#2406776 25-Jan-2020 16:28

The future demographics of New Zealand do not lie. More retirees, less productive workers paying tax, less babies (future tax payers)

Kicking the superannuation decision can down the road, is just going to make the inevitable shock even worse

Name one other country where an immigrant can sponsor their elderly parents and they can collect NZ superannuation, without any means testing after 10 years.

MikeB4

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#2406780 25-Jan-2020 16:34

To be eligible for NZ Super, you need to be aged 65 or over and be a legal resident of New Zealand. You also need to have lived here for 10 years since age 20, with five of those years since you turned 50. Thats it from me on this as I don't want to engage in nonsense.

nathan

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#2406781 25-Jan-2020 16:39

MikeB4:
To be eligible for NZ Super, you need to be aged 65 or over and be a legal resident of New Zealand. You also need to have lived here for 10 years since age 20, with five of those years since you turned 50. Thats it from me on this as I don't want to engage in nonsense.

Exactly. Someone who’s not paid a cent in tax can collect full super after 10 years.

Now I’m fully supportive of immigration, family unification, the fact that grandparents support their children by looking after grandchildren etc, so they can go to work

But at the end of the day, the numbers don’t lie, and NZ Super will become unaffordable. It will also drive even more of a wedge between young and old NZers. Future young people paying tax, to fund super for wealthy retirees, in full knowledge it’s unlikely super will sill be there when they turn 6x

JayADee

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#2406925 26-Jan-2020 07:31

I am more interested in the changes that are in the bill. Letting the Super recipients not have deductions when the spouse has an overseas pension makes sense to me. Removing the non-qualified partner benefit might leave people in some circumstances in strife. Plus it's not like there is a huge uptake of it at around 13000 and some of those would otherwise be Supported living payments. And it seems unfair to me that if one partner is getting Super they get less if they're married. On one hand the gov wants to treat you as an individual but when convenient they want to treat household income as a pool.

tdgeek

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#2406991 26-Jan-2020 12:21

I support income testing, and while that adds to admin costs, the first start, the low hanging fruit is IRD income details, they already exist, so can automatically add or remove or modify the pension. Then we have Trusts........

MikeB4

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#2407069 26-Jan-2020 17:19

tdgeek:
I support income testing, and while that adds to admin costs, the first start, the low hanging fruit is IRD income details, they already exist, so can automatically add or remove or modify the pension. Then we have Trusts........

Income testing is expensive and very time intensive. It requires interviews, sending verification and information requests and assessments. This has to be done for the initial application and the ongoing reviews and renewals. It is costly and time consuming to income test the core income support now if you add to that a increasing hundred thousands of pensioners that task would huge and expensive. The number of staff that would be required throughout New Zealand to ensure fast, accurate processing of applications and reviews would be staggering.

rugrat

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#2407143 26-Jan-2020 19:07

Means testing looks like includes all assets, no point in saving and being responsible if going to get punished in future for going without in younger days.

And if someone has an expensive asset, it doesn't mean they have a big income.

Income testing, probably still an incentive to save, just disincentives from making to much future income from those savings.

The tax people are paying today, some of it should be going to future retirement, not getting retirement from current ones working.

Because it's all done the wrong way around my opinion, it's probably near impossible to get it other way round as the current working people will be paying for their own retirement as well as ones already retired, which isn't right either.

Plus with a growing older population, retired people having more clout to who's likely to win an election.

Argument why needs to change is because not affordable, but if not seen as fair there will be some sort of reaction, such has people giving assets etc to someone else to manage, spending more money then would other wise etc.

tdgeek

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#2407293 27-Jan-2020 07:23

MikeB4:
tdgeek:

I support income testing, and while that adds to admin costs, the first start, the low hanging fruit is IRD income details, they already exist, so can automatically add or remove or modify the pension. Then we have Trusts........

Income testing is expensive and very time intensive. It requires interviews, sending verification and information requests and assessments. This has to be done for the initial application and the ongoing reviews and renewals. It is costly and time consuming to income test the core income support now if you add to that a increasing hundred thousands of pensioners that task would huge and expensive. The number of staff that would be required throughout New Zealand to ensure fast, accurate processing of applications and reviews would be staggering.

But surely the IRD data would suffice? Its already there, why have interviews, evidence, copies of income?

tdgeek

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#2407296 27-Jan-2020 07:33

rugrat:

Means testing looks like includes all assets, no point in saving and being responsible if going to get punished in future for going without in younger days.

And if someone has an expensive asset, it doesn't mean they have a big income.

Income testing, probably still an incentive to save, just disincentives from making to much future income from those savings.

The tax people are paying today, some of it should be going to future retirement, not getting retirement from current ones working.

Because it's all done the wrong way around my opinion, it's probably near impossible to get it other way round as the current working people will be paying for their own retirement as well as ones already retired, which isn't right either.

Plus with a growing older population, retired people having more clout to who's likely to win an election.

Argument why needs to change is because not affordable, but if not seen as fair there will be some sort of reaction, such has people giving assets etc to someone else to manage, spending more money then would other wise etc.

Kiwisaver needs to move from a house deposit scheme, which is what it is to many people, to a retirement scheme, which was the initial intent. If the retirement age is increased that wont kick in for many years, and they can slowly start reducing the pension slowly as more people have more money on Kiwisaver. It also needs to be compulsory. Over time, the "pension is paid for by each employee and their employer. And its income tested. We need to force people to out aside their retirement, then the Govt can just pickup the exceptions, and very old people whose Kiwisaver has run out. It might take 40 years to fully implement (if the law was passed today and the new young employee starts KS today and retires in 40 years), but over time the liability on the Govt will slowly roll back

Introduce a KiwiHouse scheme for deposit saving

MikeB4

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#2407299 27-Jan-2020 07:58

tdgeek:

But surely the IRD data would suffice? Its already there, why have interviews, evidence, copies of income?

Why interviews? MSD staff are not clairvoyant. There is a lot to be determined in an interview. Staff would be required to determine residence qualifications, age and birth details. Marriage status, sources of ALL income. Sight relevant verification documents of birth and residence. Obtain verification of all sources of income. These are but some of what is determined or process started in an interview.

tdgeek

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#2407302 27-Jan-2020 08:24

MikeB4:

tdgeek:

But surely the IRD data would suffice? Its already there, why have interviews, evidence, copies of income?

Why interviews? MSD staff are not clairvoyant. There is a lot to be determined in an interview. Staff would be required to determine residence qualifications, age and birth details. Marriage status, sources of ALL income. Sight relevant verification documents of birth and residence. Obtain verification of all sources of income. These are but some of what is determined or process started in an interview.

If I applied for the pension today, what's that process? As far as I can see that process will continue, but MSD will access IRD to check my income records. I tell them I'm retired, = no income, I get the pension. Or I tell them I am still working, income will be $95k, so they give me nothing or part pension. As with tax, end of year income records will cause an automatic debt or credit. I hear what you say but to me, income records are easily accessible. Its only one extra tickbox from what is required today

Also, I would have thought that MSD, via IRD will already know more about me than I do. If I applied for the pension and I had to get copies of birth certificate, marriage certificate, payslips thats ridiculous. They have decades of history of me, age, where I was born. They have all the records of me that are required I would have thought

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