Monday, June 24, 2024

Review of retirement income policies

BY DAVID MARSHALL - Retirement Income & Taxation NAG Chair

Late last year the Retirement Commission published their triennial Review of Retirement Income Policies.

Grey Power was one of only three submitters to this work.

So, what were some of the recommendations?

  1. Maintain NZ Super at current settings (current age of eligibility, universal, indexed). This is a key recommendation, aligned with Grey Power Policy, in an election year where some parties are considering changing NZ Super settings!
  2. Provide better information on equity release products and NZ Super rate differences (for married & sharing). We frequently receive questions on why the married NZS rate per spouse is less than the Single “Shared” accommodation rate. The commission has recommended research to determine if this discrepancy is justified.
  3. Improve the retirement outcomes for women by removing the minimum contribution requirement for people on paid parental leave so they continue to receive the Government contribution to their Kiwi Saver account.
  4. Stimulate interest in building accessible and appropriately sized housing stock for seniors. Grey Power has highlighted the desire of many to downsize in their local community who face lack of suitable housing, and unavailability of finance to facilitate the downsize.
  5. Increase the cash asset test for Accommodation Supplement to at least $42,700 per person. Grey Power strongly supports this recommendation as seniors in many “Pensioner Villages” are only eligible if their cash assets are less than $8100, while those in social housing are able to have cash assets of up to $42,700 due to silo policy decisions in the past. The $8100 limit has not increased since 1993!

The publication has many other recommendations on ensuring that New Zealanders become more financially resilient and better prepared for a better quality of life in retirement, and is well worth a read.

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