New Zealand Superannuation

New Zealand Superannuation (NZ Super) is a pension paid by the State to most New Zealand residents from age 65 until death.

• Who qualifies?
• How much is it?
• Is NZ Super guaranteed into the future?
• What allowance should you make for NZ Super in your retirement plan?

Who qualifies?

To be eligible for NZ Super you need to be aged 65 or over and a legal resident of New Zealand, having lived here for ten years since age 20. Five of those years have to be since you turned age 50.

If you are close to retirement and want to know more precisely the level of New Zealand Superannuation you would be entitled to (and information about supplements, overseas pension issues, etc) contact Work and Income on 0800 552 002 or visit www.workandincome.govt.nz.

How much is it?

The level of payment is reviewed each year and is adjusted to take account of increases in cost of living (inflation) and wages. When wages increase, NZ Super is adjusted so that it stays between 66% to 72.5% of average ordinary time earnings after tax. This means for couples both over 65, their pensions, after tax, will not fall below 66% of the average ordinary time wage after tax. For single people the pension is about 40% of that average wage.

View the current after-tax rates for NZ Super.

Is NZ Super guaranteed into the future?

No, future pension payments are not guaranteed, but Parliament needs to approve any signficant change. New Zealand has had a form of state-funded retirement income for over one hundred years. Eligibility, payment levels and other conditions have changed many times over that period. The changes have reflected different political views as well as changes in New Zealand's society, economy, the labour market and other factors.

The present government's policy is to retain the existing entitlements for the foreseeable future. Comments from other major parties suggest that changes for people currently in and near retirement are unlikely.

However, there are aspects of retirement income policy which continue to be debated. As governments change and society's views change no one can rule out the possibility of future amendments.

We can't foresee what those changes will be. Our expectation is that any possible changes would:

• be widely debated and come under close public scrutiny
• need to be supported by a majority of New Zealanders to get parliamentary support
• be introduced in stages to protect the financial security of those in or near retirement
• be made with plenty of notice so people planning for retirement can make appropriate arrangements.

What allowance should you make for NZ Super in your retirement plan?

The type of pension available could change over time, but there will be some financial support for people in retirement.

We suggest you plan on the basis of current levels of NZ Super. If you are, say under 50 and are able to save, you may want to be a bit conservative and reduce the level of NZ Super you put into your plan. That's not a bad move because it will encourage you to save more. Our Retirement calculators allow you to do that.