NZ Super changes

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Forums › Finance and wealth management › NZ Super changes

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olivernz

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#3382020 9-Jun-2025 11:38

The good thing NZ did over the decades is have schemes that are simple to operate. e.g Kiwisaver, Super,... taxation in general. The HUGE advantage of that is that you don't need much of an apparatus to manage it, hence saving a LOT of $$$. Changing these things to be means tested will start adding people that are needed to settle disputes, check things etc. You end up in a vicious cycle, where you continually need more money to finance the staff to sort out the more complex system. I am for keeping things simple. NZ has a huge advantage over other countries in this space we should not give that up.

Nowhere in the world is there a 100% funded future of financing old age. The main reason being declining young population (and conservative governments messing with the system). I think what would lead to much better results not only for super would be to incentivise and facilitate bigger families. Raise income levels across NZ to keep people in the country and entice young people to come to NZ.

KiwiSurfer

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#3382182 9-Jun-2025 20:04

olivernz:

The good thing NZ did over the decades is have schemes that are simple to operate. e.g Kiwisaver, Super,... taxation in general. The HUGE advantage of that is that you don't need much of an apparatus to manage it, hence saving a LOT of $$$. Changing these things to be means tested will start adding people that are needed to settle disputes, check things etc. You end up in a vicious cycle, where you continually need more money to finance the staff to sort out the more complex system. I am for keeping things simple. NZ has a huge advantage over other countries in this space we should not give that up.

My only query for anyone who thinks that, is to query whether they truely believe there is no tipping point where the cost of means testing dwarfs the savings from not paying people who e.g. already have >$1mil in assets and >$100k in annual income.

In reality I suspect there a method of means testing (either directly or indirectly) could be found that is relatively low in admin costs and effective enough in reducing the strain on the public purses. It does not have to be 100% effective (no system is) but as long as compliance is good enough and the savings sufficent then it can work.

If we could do so then we should. Not doing so would be a disservice to taxpaying citizens as not doing so would mean the govt spending a lot of money where it is not neccessary to do so.

Handle9

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#3382186 9-Jun-2025 20:13

Means testing seems to be manageable for every other form of welfare.

The majority of compliance costs would be the responsibility of retirees anyway.

Qazzy03

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#3382210 9-Jun-2025 21:18

Handle9:

Means testing seems to be manageable for every other form of welfare.

Plus, don't forget the apparent ability and capacity to add

parental assistance test will be added to the eligibility criteria for Jobseeker Support and Emergency Benefit for single 18 and 19 year olds. This test will assess whether the young person can reasonably be expected to rely on their parents or caregivers for financial support.

If it is determined that their parents or caregivers can support them, single 18 and 19 year olds will not be eligible for Jobseeker Support Work Ready, Jobseeker Support Health Condition Disability, or Emergency Benefit from July 2027.

The financial assessment of Opex and Capex by the government has already been done.

https://www.msd.govt.nz/about-msd-and-our-work/newsroom/budget/2025/factsheets/jobseeker-support-tightening-eligibility-for-18-and-19-year-olds.html

You don't see the political outcry or blowback because this bloc of people is a much smaller voting bloc, and a lot of them don't vote anyway.

Handle9

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#3382213 9-Jun-2025 22:02

Qazzy03:

Handle9:

Means testing seems to be manageable for every other form of welfare.

Plus, don't forget the apparent ability and capacity to add

parental assistance test will be added to the eligibility criteria for Jobseeker Support and Emergency Benefit for single 18 and 19 year olds. This test will assess whether the young person can reasonably be expected to rely on their parents or caregivers for financial support.

If it is determined that their parents or caregivers can support them, single 18 and 19 year olds will not be eligible for Jobseeker Support Work Ready, Jobseeker Support Health Condition Disability, or Emergency Benefit from July 2027.

The financial assessment of Opex and Capex by the government has already been done.

https://www.msd.govt.nz/about-msd-and-our-work/newsroom/budget/2025/factsheets/jobseeker-support-tightening-eligibility-for-18-and-19-year-olds.html

You don't see the political outcry or blowback because this bloc of people is a much smaller voting bloc, and a lot of them don't vote anyway.

That and they are "bad" beneficiaries instead of "good" beneficiaries.

mudguard

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#3382345 10-Jun-2025 07:25

Handle9:

Means testing seems to be manageable for every other form of welfare.

The majority of compliance costs would be the responsibility of retirees anyway.

I think as per that chart a couple of pages back, all the forms are absolutely dwarfed by the numbers on Super.

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mudguard

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#3382346 10-Jun-2025 07:26

Qazzy03:

Handle9:

Means testing seems to be manageable for every other form of welfare.

Plus, don't forget the apparent ability and capacity to add

parental assistance test will be added to the eligibility criteria for Jobseeker Support and Emergency Benefit for single 18 and 19 year olds. This test will assess whether the young person can reasonably be expected to rely on their parents or caregivers for financial support.

If it is determined that their parents or caregivers can support them, single 18 and 19 year olds will not be eligible for Jobseeker Support Work Ready, Jobseeker Support Health Condition Disability, or Emergency Benefit from July 2027.

The financial assessment of Opex and Capex by the government has already been done.

https://www.msd.govt.nz/about-msd-and-our-work/newsroom/budget/2025/factsheets/jobseeker-support-tightening-eligibility-for-18-and-19-year-olds.html

You don't see the political outcry or blowback because this bloc of people is a much smaller voting bloc, and a lot of them don't vote anyway.

Imagine if this was done to those who were 65 and 66 years old. Sorry, your kids earn too much at present. Try again when you're 67!

cddt

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#3382358 10-Jun-2025 08:16

olivernz:

The good thing NZ did over the decades is have schemes that are simple to operate. e.g Kiwisaver, Super,... taxation in general. The HUGE advantage of that is that you don't need much of an apparatus to manage it, hence saving a LOT of $$$. Changing these things to be means tested will start adding people that are needed to settle disputes, check things etc. You end up in a vicious cycle, where you continually need more money to finance the staff to sort out the more complex system. I am for keeping things simple. NZ has a huge advantage over other countries in this space we should not give that up.

Per the paper by Susan St John I posted earlier in this thread, there is a very simple way of means testing against current income by simply creating a new tax code for people receiving NZ Super (yes assets are more complex). Highly recommend you read it, any additional overhead would be minimal.

My referral links: BigPipe | Mercury

cddt

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#3382359 10-Jun-2025 08:18

Handle9:

Means testing seems to be manageable for every other form of welfare.

Indeed, we even means test some forms of benefit against the income of people who are not the recipient of the benefit!

My referral links: BigPipe | Mercury

Earbanean

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#3382384 10-Jun-2025 09:32

Means testing assets would be the really big challenge. There are already significant numbers of people using trusts to get around other means testing (e.g. rest home subsidies), taxation, matrimonial property etc. By retirement age, organised people will have had many years to stay below annual gifting thresholds and move most or all of their assets into a trust. I think this would probably be the biggest issue.

tripper1000

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#3383259 12-Jun-2025 16:00

Means testing would have other economic consequences that need to be considered.

At the moment you need to reside in NZ to collect super. So the national super money, your Kiwi Saver, your savings, the resident withholding tax on your Kiwi-Save and savings and the (assumed) income from your assets, goes back into the NZ economy.

If I don't receive nation super, what incentive is there to retire to cold, wet and expensive NZ? I think I would rather move to somewhere warmer and cheaper. My Kiwi saver still pays out where ever I live.

In fact my crappy but $1,000,000 house in west Auckland would probably be what made me "too rich" so I'd have to move out anyway to rent it and actualise the assumed income from my opulent asset - may as well move somewhere nice eh? I think I'll also transfer my savings to my sunny destination since it probably doesn't tax my interest.

Come to think of it, why would I invest in NZ at all? I think I will invest in my future sunny retirement destination!

You can stop building all these retirement villages, we don't need them anymore!

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Handle9

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#3383269 12-Jun-2025 17:12

You don’t need to reside in New Zealand to collect super. You need to reside in New Zealand when you apply, and otherwise meet the criteria, but you can continue to collect super if you move to a number of other countries.

in addition New Zealand has social security treaties with many other countries which give a variety of reciprocal rights.

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