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It's official: Retirement Commissioner calls for change

The Commission for Financial Capability has called on the Government to make sweeping changes to the eligibility criteria for NZ Super in the second phase of its 2016 Review of Retirement Income Policies.

Thursday, December 15th 2016, 8:07AM 4 Comments

by Owen Poland

Diane Maxwell

Retirement Commissioner Diane Maxwell says change is needed because the number of people aged 65 and over will double in the next 30 years to reach 1.4 million, and the net actual cost of NZ Super is expected to triple from $11 billion to $36 billion over the next 20 years.

Having spent the past year talking to New Zealanders up and down the country, Maxwell says the Commission has heard people's concerns and received support from many for what is being proposed.

The key CFFC recommendations for NZ Super are:

 

  • Increasing the age of eligibility to 67 years, with a gradual rise over eight years starting in 2027, to reach 67 in 2034.
  • Increasing the length of residence criteria from 10 to 25 years.
  • Removing the non-qualifying partner option, so that people who are younger than 65 or who don’t meet the residence requirement can no longer receive NZ Super through their 65+ partner.
  • Reforming the direct deductions policy for overseas state pensions so that partners are not affected and voluntary contributions to overseas state pensions are not deducted from NZ Super.
  • Reviewing and adjusting supplementary allowances.

“We know these are difficult conversations" says Maxwell, "but we also know that people are living longer and receiving NZ Super for a longer time. If we do nothing soon then we are putting off more painful decisions that will have to be made in the future."

Other recommendations include resuming Crown contributions to the NZ Super Fund now and suspending tax contributions until a resumption occurs; additional assistance for people over the age of 50 who are seeking work; and retraining and career transition support for those over 50.

Maxwell says that if changes are agreed now then there is time to introduce them in a way that allows people to plan and prepare.

“Any changes need to be part of a broader approach, reflecting the fact that people reach their 50s and 60s with varying degrees of physical and financial fitness. We heard from 65-year-olds who planned to retire between 68-72 and 58-year-olds who were unable to work. 65 is too late for some and too early for others.”

Tags: Commission for Financial Capability NZ Super

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Comments from our readers

On 15 December 2016 at 11:44 am Murray Weatherston said:
Are there any other people on the Commission other than the Commissioner? If yes, who are they? If no why aren't the report and recommendations attributed to a single person, the Commissioner?
On 19 December 2016 at 4:24 am henry Filth said:
Any plans to set up a Minister for Expats to protect the Kiwi diaspora from idiocy like this?
On 16 June 2019 at 1:27 am jessicabelle said:
thanks
On 18 June 2019 at 2:28 pm Elephant1 said:
This is an excellent summary , kiwis just do not know the gravity of the baby boomers. And throw into the mix the increasing cost of medical cover we have problems.

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