Almost 50,000 people claim pension while also earning more than $100,000 a year - data

  • 14/02/2024

New data from the Retirement Commission shows almost 50,000 people claim New Zealand's Superannuation while also earning more than $100,000 a year.  

This has led to calls for people to be income tested before they receive the New Zealand Super. 

The commission released a paper on Tuesday outlining various policy options, which recommended keeping the age of eligibility of NZ Super remain at 65.  

The paper suggested income testing would be a fair way to reduce the cost of the system rather than raising the age of eligibility if required. 

It also showed some interesting data that 6 percent of superannuitants, or 49,368 people, had a taxable income of more than $100,000 in the 2021/2022 financial year. 

The commission isn't the only one calling for income testing, with Newstalk ZB host John MacDonald telling his radio show on Wednesday that he was a fan of it.  

He questioned why "one person's lifeline" should be "another person's beer money?".  

Retirement Commissioner Jane Wrightson said people who continue to work tended to be those who were earning significantly more than they would get from NZ Super.  

Concerns have also been raised previously that Superannuation could become too expensive as New Zealand has an aging population.  

Data from Stats NZ shows by 2028, 1 in 5 people in New Zealand will be aged 65 years old or older. 

Economist Cameron Bagrie warned about this last year when he was on AM. Bagrie told the show New Zealand faces Government debt spiralling out of control if the system isn't changed. 

"Treasury's forecasts... they're predicting that if we don't make changes, net-Government is going to 190 percent of GDP," he told AM last year. 

"Now, what that number is actually telling is the current system's unsustainable, we need to make changes, the question is what are those changes going to look like over the next few years." 

Superannuation was a major talking point during last year's election campaign with Labour committing to leaving pensions as they are, while National and ACT said they would raise the age of eligibility. But the coalition agreement included a commitment to keep it at 65. 

Wrightson said any changes to the age of eligibility could have major ramifications.  

"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," she said.  

"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."