Retirement Commissioner Jane Wrightson says now is not the time to change the age of eligibility for NZ Super.
She said income-testing those receiving the pension, and reducing the amount paid to people earning more than $100,000 a year or more, could be a better option if there were concerns about the cost of the scheme.
The Retirement Commissioner issued a paper outlining policy options and considerations for NZ Super.
There have been concerns that an ageing population could make the current system unaffordable. National and ACT campaigned on a policy of increasing the age to 67 in a staged process, but backed away from this in the coalition agreement with NZ First.
A Sense Partners report found that current policy settings would mean that all labour taxes would be used to pay for NZ Super and the healthcare system, by 2049.
But Wrightson said the view the pension was unaffordable was not supported by independent, publicly available analysis.
“NZ Super is a vital part of the retirement income system and needs to be fair, stable, and affordable for current and future generations. Tomorrow’s pensioners will not be in the same position as today’s. We need a way for politicians to take a longer-term, and purposeful approach, so the right decisions are made.”
She said there needed to be accord between the main parties on the future of NZ Super so that it did not become a political football.
“A political accord, and the process to reach it, would help politicians balance their decision-making and prevent piecemeal policy change.
“At the very least, the number of parties who have made a political commitment under the New Zealand Superannuation and Retirement Income Act 2001 could be expanded. This would signal their ongoing commitment to current policy settings and impose special obligations on the Government to disclose whether consultation has taken place with other listed parties and the results of the consultation.”
She said the current settings were not out of line with other countries.
“Any change to the age of eligibility would disproportionately disadvantage manual workers, carers and those they care for, and those with poor health, due to differences in savings, wealth and ability to remain in paid work after the age of 65. Women, Māori, and Pacific Peoples are overrepresented in those groups.
“The extra support needed to support some people through to a later age of eligibility would reduce fiscal savings from raising the age. Political support for a stable long-term system is crucial.”
The report said there were 50,000 New Zealanders receiving the pension and still earning $100,000 a year.
Twice the median income could be an appropriate threshold at which to income-test NZ Super, if that path were chosen, Wrightson said.
But Simplicity KiwiSaver founder Sam Stubbs was scathing of the idea. “If you’re wealthy and you put money into a lot of assets that don’t generate income but can still sell off the assets – what constitutes income?”
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