It’s time we stop handing out free money to old bludgers

A new paper investigates the issues around people who move to New Zealand and become eligible to receive NZ Superannuation.

It raises concerns about the length of time people need to be in the country before they can receive Super, as well as questioning the fairness of some of the other policy settings, including deductions of overseas pensions.

At the moment, NZ residents are eligible for Super if they have lived here for 10 years after the age of 20, including five after the age of 50. The average residence requirement to receive minimum benefits in OECD countries is 26 years.

Basically, someone can come here at age 55, go on the dole, and then be fully eligible for super come age 65. ?As a result, we’re importing other countries’ retirement problems. ? Like every other country, we’re top heavy with baby boomers, yet no government to date has changed the criteria to ensure out system is fair for everyone – not just old people that come here from other parts of the world to be “reunified” with family. ?

The paper on overseas pensions and criteria for NZ Super was written for the Commission for Financial Capability by the Retirement Policy and Research Centre at Auckland University.

It forms part of the work being produced as part of the Retirement Commissioner?s three-yearly review of retirement income policies. Diane Maxwell will release her recommendations for policy change before the end of the year.

The paper found an increasing number of people who qualify for Super have deductions from their overseas pension. In 2016, 11.9%, or 84,000 people out of the 705,000 receiving NZ Super, had deductions from overseas pensions.

It also concluded that the spousal provision policy was unjust; this is where a person?s overseas pension is not only deducted from their own Super but any excess is deducted from the Super of their partner or spouse.

And it raised the question of whether it is fair and reasonable to include voluntary and employee contributions overseas, similar to schemes like KiwiSaver, in the overseas deduction policy.

Some people who have a pension from an overseas source are being asked to pay up. ?And fair enough too. ?They’ve been putting taxes into their schemes in other countries, so if they live their last years here, they can’t just expect our young people to look after them now. ?That does leave those that do not have an overseas source of retirement income. ?And they need to stop sponging off our tax system. ?They haven’t earned it. ?They haven’t contributed. ?And now we’re paying for them to live on an extended holiday until their death?

 

 

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