Don’t means-test our superannuation.
A new study has found widespread opposition to financial barriers for receiving superannuation, and that support for keeping the retirement age at 65 has increased.
The University of Otago study surveyed almost 1300 people in 2022. They were asked questions to dig into how they felt about New Zealand super including the age of eligibility, means-testing, and the willingness to increase both current and future taxes to pay for the pension.
The Otago study found that almost a quarter of people ranked keeping the age of eligibility at 65 as the most important aspect of NZ Super compared to almost a fifth of people in the 2014 survey.
Raising the retirement age to 67 was ranked by 61% of those surveyed as the “worst policy”.
The survey found that respondents expressed a strong preference for universal superannuation rather than one given out on financial need, and those surveyed also opposed policies that would result in “steep increases in taxes on future generations”.
Study lead author, Andrew Coleman, said there was a willingness amongst people of all ages to support initiatives such as the NZ Superannuation Fund that reduce the costs of superannuation on future generations.
"The findings showed a greater opposition to increases in current taxes than in 2014. Despite this reduced support, a majority of the respondents still would support higher current taxes to reduce the size of future tax increases, given plausible investment returns."
The 2022 survey also showed more people were feeling less confident they’ll have a comfortable retirement compared with the 2014 survey.
Pensioners take the lion’s share of welfare payments made in New Zealand, with about 880,000 people receiving NZ Super out of about 1.4 million people who get government assistance including students.
The bill for NZ super is expected to rise, with the Treasury predicting in December that benefit expenses would rise $3 billion in the current year mostly driven by NZ super payments – with costs for super predicted to increase by $1.8 billion because benefits are indexed to increases in the average wage.
The Government decided to increase benefits by the rate of inflation on April 1, which added an additional $311 million in spending on superannuation.
Overall, benefit expenses are forecast to increase by $9 billion by 2027, again driven by New Zealand Superannuation and New Zealand Superannuation is projected to grow from 5% of GDP now to 7.7% of GDP by 2061.
Retirement Commissioner Jane Wrightson said the survey supports the 2022 Review of Retirement Income Policies' key finding that the age of super eligibility stay at 65.
She said 40% of people aged 65 and over had "virtually no other income" besides superannuation.
"To provide good retirement outcomes we need to maintain NZ super at current settings and explore other mechanisms to support those where this is not enough on its own."
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