Superannuation changes

[Lilith7]

It seems people will no longer be eligible unless they've lived here longer prior to turning 65.


https://www.workandincome.govt.nz/eligib...-2024.html

[harm_less]

So for someone turning 5 this year they need to have lived in NZ for 10 years minimum including at least 5 of them in the last 15 years. The amount of time spent living in NZ will increase for those turning 65 over the next 18 years. Just the strategy that would be expected to mitigate the government's superannuation burden as the population ages in terms of overall demographics and I expect it won't be the last tightening we will see in the future as the retired proportion of NZers increases.

Interestingly my partner is a Brit who spent 20 years living in Canada and there is a similar 20 year minimum in place for superannuation received from Canada.

I remember attending a presentation by Gareth Morgan about 20 years ago where he predicted various measures that we are likely to see aimed at mitigation of the superannuation payments and maximisation of income tax payment such as incentivising women back into the workforce, enticing retirees to remain working and disincentivising beneficiaries. The burden of aging demographics is problematic over most Western countries and threatens economies as superannuation loads exceed the tax income gained by a reducing portion of working population.

[Oh_hunnihunni]

Yes, our children in Oz will be particularly affected. I remembered Winston climbing on this bandwagon last time he was in government, obviously he plans to keep going.

[dken31]

Canada, Australia, UK and a bunch of other countries have a reciprocal arrangement whereby time spent there is counted as time spent here for the purposes of superannuation eligibility.

It is generally a much needed change though as allowing someone to move here at 55 and then start receiving free money 10 years later (possibly for the next 20+ years) was unsustainably generous.

---

When superannuation was first set up in NZ, eligibility age was only a few years short of average life expectancy. In other words, the average recipient only received super for fewer than 5 years.

Now, the average person receives it for about 20 years.

For someone on the average wage who lives to an average age, total combined super payments received over those 20 years are more than the total combined income tax they paid over their entire working life. It is a literal pyramid scheme where it is only "sustainable" if there is a significantly ever increasing number of new taxpayers repeatedly added in at the bottom level (i.e. significsnt constant population increase).

[Lilith7]

Perhaps its time to make more of those reciprocal arrangements with more countries. The problem isn't likely to go away until the last of our generation falls off the perch.

[Oh_hunnihunni]

Canada, Australia, UK and a bunch of other countries have a reciprocal arrangement whereby time spent there is counted as time spent here for the purposes of superannuation eligibility.

It is generally a much needed change though as allowing someone to move here at 55 and then start receiving free money 10 years later (possibly for the next 20+ years) was unsustainably generous.

---

When superannuation was first set up in NZ, eligibility age was only a few years short of average life expectancy. In other words, the average recipient only received super for fewer than 5 years.

Now, the average person receives it for about 20 years.

For someone on the average wage who lives to an average age, total combined super payments received over those 20 years are more than the total combined income tax they paid over their entire working life.  It is a literal pyramid scheme where it is only "sustainable" if there is a significantly ever increasing number of new taxpayers repeatedly added in at the bottom level (i.e. significsnt constant population increase).

Mmmm, so maybe we should start rationing medical care for the aged? After all, they (we) aren't very productive once we retire, maybe we shouldn't be doing free vaxes and queues for new hips?

Meanwhile, come Tuesday I'm buying me a new sun umbrella (Bunnings, down fifty bucks!) and another raised vege garden planter, on the strength of my super raises. Blue this time. The brolly, not the vege garden.

I love being old. 

[Lilith7]

Canada, Australia, UK and a bunch of other countries have a reciprocal arrangement whereby time spent there is counted as time spent here for the purposes of superannuation eligibility.

It is generally a much needed change though as allowing someone to move here at 55 and then start receiving free money 10 years later (possibly for the next 20+ years) was unsustainably generous.

---

When superannuation was first set up in NZ, eligibility age was only a few years short of average life expectancy. In other words, the average recipient only received super for fewer than 5 years.

Now, the average person receives it for about 20 years.

For someone on the average wage who lives to an average age, total combined super payments received over those 20 years are more than the total combined income tax they paid over their entire working life.  It is a literal pyramid scheme where it is only "sustainable" if there is a significantly ever increasing number of new taxpayers repeatedly added in at the bottom level (i.e. significsnt constant population increase).

Mmmm, so maybe we should start rationing medical care for the aged? After all, they (we) aren't very productive once we retire, maybe we shouldn't be doing free vaxes and queues for new hips?

Meanwhile, come Tuesday I'm buying me a new sun umbrella (Bunnings, down fifty bucks!) and another raised vege garden planter, on the strength of my super raises. Blue this time. The brolly, not the vege garden.

I love being old. 

Yep, it may have drawbacks but it comes with a few good bits too....