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War on the poor: flexible super

Written By: - Date published: 10:20 am, August 27th, 2013 - 94 comments
Categories: activism, benefits, jobs, john key, national, peter dunne, slippery, unemployment, united future, wages - Tags: , ,

While much of the MSM is focusing on the very important and energising Labour leadership election, the Key-Dunne government has slipped out a discussion paper on Dunne’s proposal for flexible superannuation.  Make no mistake, this is a U-Turn for Key, while he hides behind it being a Dunne and flexible initiative and good for low income people.

Investigation of Mr Dunne’s proposal was part of his confidence and supply agreement with National at the last election.

The proposal allows people to choose to take a reduced rate of NZ Super from the age of 60, or an increased rate if they defer taking up superannuation until they reach 70.

“Flexi Super lets people choose for themselves when they want to take up superannuation without being told by the government when they should or should not retire,” Mr Dunne said.

While this seems good for many low paid workers, especially Maori and Pasifika people who have relatively short lifespans.

RNZ, Nine-to-Noon did a series of interviews on it this morning.

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First up, Michael Littlewood from Auckland University says that it isn’t that simple.  He says the discussion document is a relative sideshow to the wider issues with super.  Littlewood says Dunne’s proposal is superficially attractive.  It will increase the costs to the country, and decide who can get it earlier will be difficult.  The current superannuation is one of the simplest and most effective in the developed world. Dunne’s proposal just creates unnecessary complications and confusions.

Anne Martin from Age Concern talks next in the slot, saying their concern is the amount of the pension which is currently inadequate.

Sue Bradford was the final person interviewed in this slot. It is an excellent and clear interview in which Bradford explains why Auckland Action Against Poverty will oppose this initiative.  She says it cannot be seen as separate from the wider welfare system, which needs a complete overhaul. She describes it as (16 mins 30),

another step, another step in the dreadful  war on the poor that’s been happening in Aotearoa for many years now, because for people in those groups, for whatever years of life are left – for people, they will be spent in grinding poverty rather than having the chance – I mean – Anne was saying that the  super at the moment is not high enough.  it’s 350 something dollars a week.  That’s still a lot more than people get on welfare and to think that you might be on a lot less than that for the rest of your life on this new form of pension is actually grinding people into enduring poverty for the rest of their lives.

She gave examples of 60+ year olds, still caring for family members, who are being harassed by WINZ to seek for work, even though their chances of getting jobs are pretty poor. She said many would opt to go on a retirement pension, which looks to be a better option for them in the short term, but would mean, in practice, living the rest of their years in poverty.  The government will aim to drive down the rate of the pension for those receiving it at an earlier date.

Bradford argued for universal benefits and that Dunne’s plan would be more beneficial for those on higher incomes, who have options to work til they are 70.  Under Dunne’s proposal, those who defer collecting their super until they 70 years old, will get a bigger pension.

94 comments on “War on the poor: flexible super”

  1. Bill 1

    I’m a bit ignorant on all of this as I always assumed that by the time retirement came around for me, there would be no such thing as a state pension.

    So, excusing my degree of ignorance, can somebody enlighten me as to whether the level of ‘super’ is related in any way to a person’s wage when they were working? (If it is, then those on lower wages will be compelled to ‘work on’ in spite of their lower paid job potentially ‘taking it out of them’ to a far greater degree than those in better paid co-ordinator type jobs.

    And further than that, is there anybody out there seriously believing that pension funds, currently invested in oil futures and gawd knows what, aren’t going to crash and burn in the not too distant?

    Is it not high time to move beyond the question of retirement monies and question the viability and desirability of ‘working for life’? And then, possibly discuss how we shift into a situation whereby we deal with potential financial precariousity while moving to part-time or short term stints of working as a way to top up a universal income for the sake of consuming whatever luxuries we may desire?

    • karol 1.1

      NZ superannuation is a universal benefit, with everyone entitled to the same basic amount, although, there are some differences: e.g. based on relationship status, whether getting overseas pension.
      It’s simplicity, in being universal, is one of the positives.

      This is unlike my UK state pension, which is based on the amount I paid into it while working there. Also, my UK pension will be deducted from my NZ super when I qualify for it.

      How much you get depends on your current circumstances, such as:
      whether you are single, married or in a relationship
      your living situation if you are single (eg live alone, live with dependent children, share accommodation with others)
      whether your partner is included in your New Zealand Superannuation payments or not
      any overseas benefit or pension you may get.

      Payments from accident insurance or Accident Compensation Corporation (ACC) may affect your pension. If you get these payments you’ll need to talk to us.

      Payment of New Zealand Superannuation is made directly to your bank account every two weeks.

      Bradford’s main point is a good one: superannuation revisions need to be part of a whole wider restructuring of all social security.

      And I would go for a universal income also, and agree with your point about moving away from “working for life”. I’m all for more part time work.

      • Draco T Bastard 1.1.1

        I’m all for more part time work.

        Yep, a high level Universal Income so that people don’t drop into poverty while encouraging people to do part time work as well as learning/R&D/Arts.

      • Molly 1.1.2

        Worth a look if you are debating the merits of a shorter working week: 21 hours – from the New Economics Foundation.

        ” The vision

        Moving towards much shorter hours of paid work offers a new route out of the multiple crises we face today. Many of us are consuming well beyond our economic means and well beyond the limits of the natural environment, yet in ways that fail to improve our well-being – and meanwhile many others suffer poverty and hunger. Continuing economic growth in high-income countries will make it impossible to achieve urgent carbon reduction targets. Widening inequalities, a failing global economy, critically depleted natural resources and accelerating climate change pose grave threats to the future of human civilisation.

        A ‘normal’ working week of 21 hours could help to address a range of urgent, interlinked problems: overwork, unemployment, over-consumption, high carbon emissions, low well-being, entrenched inequalities, and the lack of time to live sustainably, to care for each other, and simply to enjoy life.

    • just saying 1.2

      This is what I understand -every person becomes eligible for National Super when they turn 65 (I believe spouses of those 65 and over become eligible according to means test). Rates vary only according to whether or not the superannuitant is living alone.
      WINZ top-ups are means-tested.

      I’m not expecting there to be super when I get there either, but I do care about the possibility that it will changed to the detriment (as always) of the least well-off for those who do, or will get it.

      • Mary 1.2.1

        Yes, that’s my understanding too. What’s interesting is that while the legislation hasn’t changed Work and Income has started a policy-based attack on superannuitants in areas such as residency, reciprocal agreements with other countries and rules around asset testing for residential care subsidies. We’re not necessarily hearing too much about it because it doesn’t involve legislative change – yet – but it’s a full-on assault nonetheless and is causing a lot of older people a lot of stress and financial suffering. No group is immune from what this government is doing to its citizens.

    • Bill 1.3

      Thanks Karol and js for taking the time to explain :-)

  2. Winston Smith 2

    So basically the left is against choice, nice one

    • karol 2.1

      Is it a real choice, when it’s a choice between living in grinding poverty or living in even more grinding poverty for some? – while for others it’s a choice of a high or even higher income in the final decades of life.

    • weka 2.2

      “So basically the left is against choice, nice one”

      Where did you see a consensus from the left on this issue Winston? A link would be good.

    • Draco T Bastard 2.3

      A Universal Income and the removal of the state pension. All the support you’d ever need for the choices that you make as to whether to work or retire or learn or R&D or art or whatever you choose. Compared to the choice that the right give – work for someone else or be in dire poverty with working for someone else still leaving the plurality of people in poverty.

      This government and the political-right always put in place policies that restrict peoples choices. We especially see this in their welfare reforms.

    • Foreign Waka 2.4

      A couple receives $ 549.88 currently per week, a single person half – after tax. The average income of two adults is about $ 1,000.00 to give you some measure.
      The expenditure in retirement is now reduced to live within the means reduces life to paying Rent, Utility, Food, Clothing, Transport and if you are lucky 10 seconds with your doctor once a year. Dentist is a pipe dream. Any reduction further will mean not just that one is poor but certain poverty , and this means REAL poverty. So really the “choice” that is being offered is nothing else then Mr Dunn’s price to have an income that is far far far higher. Looks like he knows that very well.
      http://www.stats.govt.nz/browse_for_stats/people_and_communities/Households/HouseholdEconomicSurvey_HOTPYeJun10/Commentary.aspx

      Today’s statistic on suicides states that by far the largest group are elderly men, with women not far behind. With the bleakness that awaits you after having worked at low wages it is no surprise.

  3. weka 3

    “And further than that, is there anybody out there seriously believing that pension funds, currently invested in oil futures and gawd knows what, aren’t going to crash and burn in the not too distant?”

    Most people believe that superannuation is safe. Ditto Kiwisaver.

    Myself, I think we have no idea when everything is going to fall over.

    • Bill 3.1

      The operative word being ‘when’ as opposed to ‘if’.

      • weka 3.1.1

        True. But also operative is “we don’t know when” (cf to “not too distant”), IMO.

        Boy who cried wolf syndrome. I bet there is a relationship between how often we say it’s urgent/happening now/happening soon, then it not happening, and people’s disbelief.

        • Bill 3.1.1.1

          sheesh – ‘not too distant’ can be anything from a week or two to some decades, ie – it’s just not very specific and relies on the reader’s own perspective/belief/interpretation. And that’s a quite deliberate fudge on my part.

          • weka 3.1.1.1.1

            Ah, ok. In teotwawki crowd, not too distant would mean anything from a year to five or ten years. I think it’s possible (but less likely) that it’s decades away. There’s a big difference between this decade and maybe not in my lifetime for people that are struggling to believe it’s true. I suppose what I was getting at was that in order to have that conversation (about UBI and the fragility of the future), do we need people to believe about the fragility of the future. It would be good to have a post sometime on the UBI, so we can really focus the discussion beyond the general theory.

    • Colonial Viper 3.2

      The other thing about the “pension fund” craze of the 90′s and 00′s is that they provided capital for the investment banks to squander and cheat investors out of.

      Workers pension funds, worth hundreds of millions, or billion of dollars, blown on “AAA” rated subprime mortgage bonds etc.

      All the while the money men running the show pay themselves obscene bonuses using other people’s money.

      Even NZ farmers and city councils are losing their savings due to bullshit derivative products sold by NZ banks.

  4. weka 4

    Has anyone suggested what the lower amount should be? Surely that is a huge factor in this debate.

    And what about the demographics? I’d expect that the people most likely to be choosing earlier retirement are the group more likely to be dying earlier, eg Maori, Pacific Islanders, the underclasses ie people who as a class are already on lower incomes and living with the long term consequences of that. Hardly seems fair.

    • McFlock 4.1

      here

      Mr Dunne’s proposal would allow people to access superannuation between 60 and 70 years of age, and adjust the level lower by 6% for every year before 65, and raise it by 10% for every year over. That means if someone took the pension at 60, they would get 73% of the rate, while someone taking it at 70 would receive 160%.

      Basically, if you can afford to put it off for a few years and still live an average lifespan, you get loads more than someone who gets pressured into taking the pension early because WINZ still harass them like they’re a high school dropout.

      • weka 4.1.1

        Right, so $350/wk becomes $255/wk.

        People with other sources of income might be fine with that I guess (looking at you Mr Dunne).

        • Foreign Waka 4.1.1.1

          Current Pension for couples it is $549.88 or $274.94 per person. Single person $357.42.
          It would mean that a partner going into earlier retirement will get $ 200.00.
          Considering that the parliamentarians have voted themselves whooping increases all around, one wonders what kind of people they are. Perhaps this was the wrong question, is should be – are they actually human?

  5. Sanctuary 5

    I don’t get this proposed change from Dunne.

    If I were a Maori, I could retire at 60, still die on average at 67, and get less money for those seven years? So if the average Pakeha male lives until 74, then he gets nine years at the full amount? How does that add up? It doesn’t seem make any sense.

    • Draco T Bastard 5.1

      It’s not supposed to make sense, it’s supposed to save the government money so that taxes can be cut for the rich.

    • McFlock 5.2

      If the Pakeha male put off the pension until 70, he would get 6.2 equivalent-full-pension-years (EFPY).
      The Maori male gets 7 years of pension @73%, so only gets 5.1 EFPYs.

      Less money and a shorter life.

      • weka 5.2.1

        I seem to remember Tariana Turia suggesting that Maori get to retire earlier (on the full rate).

        • McFlock 5.2.1.1

          Not a completely silly idea.

          Although it could be taken to extremes – earlier eligibility for smokers/highBMI for example. Enough of a discount to make it rewarding, but tilted on average in the House’s favour :)

          I think it might be safer in the long run just to address the causes of inequality.

          • weka 5.2.1.1.1

            True, but I’m guessing it would take more than a generation for the life expectancies to change.

            • McFlock 5.2.1.1.1.1

              Not with a bit of commitment. And without that commitment, I suspect that the tories would find some way of using the idea to stiff people when it comes to pensions – use the earlier payments as an excuse to cut them across the board because of a cost “blowout”.

    • alwyn 5.3

      Quite apart from the fact that your numbers for life expectancy aren’t right there is a very simple reason for the fact that you get the pension for less years if you die younger.
      It’s the fact that you don’t have any living costs after you are dead and don’t ned an income.
      The purpose of the pension is to ensure that the elderly, who can no longer provide for themselves, should not live out their lives in a state of penury.
      Incidentally every one collecting NZ Super should hold their hands up to the heavens and say “Thank you Mr Muldoon” for bringing the scheme in.

      • weka 5.3.1

        “Quite apart from the fact that your numbers for life expectancy aren’t right there is a very simple reason for the fact that you get the pension for less years if you die younger.”

        Yeah, but you do get that there are whole classes of people that die younger due to socio-economic reasons?

        • alwyn 5.3.1.1

          Of course I get that. I suspect, although I don’t have the figures or analysis to hand, that your race is not the predominant factor in you life expectancy.
          I would expect that the major factors determining your life expectancy are, in order, whether you smoke, your sex, and your general cardio-vascular fitness. I don’t think that race, per se, would be that significant.
          However I can only repeat that the purpose of a pension isn’t to give everyone the same size pot of money. It was to provide an income to keep them out of penury during their old age. When you die your need ends.
          I’m also a believer in John Mortimer’s views of course when he said
          “There is no pleasure worth forgoing just for an extra three years in the geriatric ward”
          Incidentally the NZ Statistics Department say that a Maori male aged 60 can expect another 20.6 years to live and a non-maori 23.3 years.

          • McFlock 5.3.1.1.1

            Incidentally, that just means that the Maori male receives 15 EFPY, the non-maori male receives 21.28 EFPY. In half the time.

            The direct determinant might not be ethnicity, but Maori/Polynesians are seriously overrepresented in almost all the determinants of early mortality, post-infancy included.

            That might be an amazing coincidence, but the key point here is that Dunne’s policy guarantees those who can already afford to hold off on the pension a lifestyle twice as munificent as for those who need to take the crumbs as soon as possible. First-class and working-class pension carriages.

            • alwyn 5.3.1.1.1.1

              I suppose I could equally claim that all non-maori would retire at 60 and that all maori would retire at 70. Then I suppose you would agree that Maori were going to get a much higher rate of super during their retirement years would you and that is quite unfair?
              The thing Dunne is proposing is that people should be given the choice as to when they retire. He isn’t saying that all Maori must retire at 60 and all non-Maori must slog on till they are 70, which is what your claim implies.
              Incidentally do you say that woman are treated much more generously now than men, in that on average the collect superannuation for longer? They also are likely to get more per week as there are more widows living alone, and getting about $360/week than men. Men are far more likely to be still living with their wife and only getting abou $275/week.

              • McFlock

                that flip in the demogs simply means that the NMNP male would get 17 EFPYs and the Maori male would get 16.9. Great. You almost give them the same income, rather than spending a third more on non-Maori “to keep them out of penury during their old age” than on Maori (many of whom are already in penury prior to their pension years, anywhay. Those that make it, of course).

                But of course who is more likely to be in a position to hold off on getting the pension until 70? Who would have that security, who is more likely to be working paper-pushing higher income jobs?

                It’s like the rest-home workers arguing gender discrimination – if it is impartially targeted at particular economic groups, then if those groups are heavily weighted to particular demographic groups then the outcomes are the same as if the discrimination were explicit and intentional. Tralah, we have discovered the structural discrimination inherent in the system.

  6. Wayne 6

    Hi Karol, A few points. Dunne is probably going too far when he goes down to 60 and up to 70. Because of acturial calculations flexibility should probably be only a couple of years either side. By the way I presume Labour is pushing for 67? I think it would hard to seriously suggest Super should be significantly increased.

    Mind you if Labour really does go Left, max tax rates might be 50% for incomes over say $200,000 which would mean more money for all sorts of benefit increases. Incidentially I have been thinking of Chris Trotters view that David Cunliffe will abandon all aspects of the “neoliberal experiment”. I presume that would mean all employees on awards, max tax rates of 50%, CGT, pulling out of TPP negotiations, closing down all the casinos, buying back various ex SOE’s, including Contact, increasing benefits, 10,000 extra sate houses (but no schemes for first home buyers), a true state TV company, buy local, no new irrigation, pulling out of “five eyes” etc, etc.

    Actually no real need for Labour, just let the Greens get on with it. However, I do appreciate most Labour voters won’t vote Green, but on the above prescription they might as well do so.

    • framu 6.1

      engaging in a bit of smear tactics there wayne?

      the straw man cometh

    • One Anonymous Knucklehead 6.2

      Raise the double standard, Dr. Mapp. National abandoned the “neo-liberal experiment” when you sold gambling legislation to party donors, and legalised mass surveillance.

      Where is your “small government”?

      As for your your wild policy predictions, they seem about as sincere as your crocodile tears for the NZLP.

      You normally give good comment. Disappointing.

    • Tracey 6.3

      why do national supporters always assume the only way forward (either by national or Labour) is to repeat earlier mistakes.

      I will wait to find out what each candidate actually stands for and what they then actually do.

      I wont make excuses for any of them if they retreat from those positions.

  7. just saying 7

    Have I got this right? I see this as a way for superannuitants who are able to stay in the paid worforce beyond 65, to avoid losing some of their super to secondary tax. Just wait a few years, working, as they would be anyway, and they get the lot at the lower tax rate.

  8. Wayne 8

    framu, why is that smear tactics, I was trying to think through what going “Left” would really mean in terms of policy. Perhaps the one unfair bit was suggesting there would be no policies for first home buyers, that all housing spending would go to state rentals.

    Now it is actually my view that David Cunliffe is not nearly as left as some here (Karol for instance) would like to beleive. Sure he will change some things, but it is simply not possible to end the “neoliberal Experiment”. The world has changed too much, and all modern economies are much more free than they were 30 years ago. If DC does become PM (preferably in 2017!) hopefully he would look at what more could be done to stimulate innovation.

    • McFlock 8.1

      Resistance is futile, eh?

      Thanks for your concern.

    • One Anonymous Knucklehead 8.2

      “trying to think”

      Keep trying.

      I’d like to see next year’s Labour/Green government “stimulate innovation” by nationalising charter schools without compensation, taking back the property the National Party sold to the 2.5%, passing whatever gambling legislation they damn well please with no regard to what National Party clients think, reestablishing genuine privacy and information security from eg: the National Party’s US clients, abolishing vandalism National’s Standards, and taking steps to reduce inequality.

      The world hasn’t changed that much, Dr. Mapp. The systemic problems exposed in 2008 still exist.

    • karol 8.3

      Wayne, I have made no claims about Cunliffe being very left wing. Just the opposite. It is Key and the MSM that are talking up Cunliffe taking the party to the left. Key was also saying Robertson would also take the party to the left. that’s all scaremongering and spin.

      In my post on Cunliffe getting my electorate vote, I described him as moderate and nowhere near as left as I am. This morning I made this comment:

      I make no claims for Cunliffe leading a brand new direction for Labour. I have said in other comments, he is the best of the current crop of Labour MPs to lead them right now. If he wins the leadership, I don’t propose to give Cunliffe or any other opposition leader or MP a free ride. Democracy means continually holding our politicians to account.

      I am not in favour of Labour’s current policy of raising the retirement age to 67. I am more for Bradford’s idea of looking at superannuation in the context as a wholesale review of social security.

      I do favour raising taxes for those on higher incomes. But that’s not something Cunliffe has committed to.

      The rest of your above comment about Cunliffe taking Labour left on a range of issues is a diversion from the topic of this post, and just looks likes more rightwing spin re-Cunliffe.

    • framu 8.4

      ” I presume that would mean all employees on awards, max tax rates of 50%, CGT, pulling out of TPP negotiations, closing down all the casinos, buying back various ex SOE’s, including Contact, increasing benefits, 10,000 extra sate houses (but no schemes for first home buyers), a true state TV company, buy local, no new irrigation, pulling out of “five eyes” etc, etc.

      Actually no real need for Labour, just let the Greens get on with it. However, I do appreciate most Labour voters won’t vote Green, but on the above prescription they might as well do so.”

      thats the smear wayne, stop being cute

      now, there might be a few grains of truth in there – but in your first comment you pulling together all the worst things you can think of, ignoring any kind of political and economic reality, track record etc then trying and make a extra attack at the greens – all prefaced with “i presume”

      shit mate – you werent that far from chucking watermelon or communist in there are you

      then your follow up is “Sure he will change some things” – so it looks like you dont even believe what you wrote in the first place

      for someone whos meant to be experienced at this kind of politics and policy stuff i dont for the life of me know why your using an argument style that is more at home on talkback

    • Draco T Bastard 8.5

      but it is simply not possible to end the “neoliberal Experiment”.

      Yes it is. The only thing stopping us from doing so is the politicians belief that we can’t.

      at what more could be done to stimulate innovation.

      Well, the first thing to do would be to drop the neo-liberal experiment as has obviously failed to provide the innovation that it promised. The second thing would be to re-write the IP laws so that people aren’t penalised for being innovative. And the third thing would be to stop giving so much wealth to the few and make it available to the majority so that more people actually have access to the resources they need to be innovative.

      The one thing we can’t afford is the rich.

  9. Matthew 9

    Is this policy part of Dunne’s deal over the GCSB bill?

    • bad12 9.1

      Apparently Dunne’s ‘policy’ is part of the coalition agreement Slippery and Dunne signed up to after the 2011 election,

      i would suggest that Slippery the Prime Minister has simply released this as a distraction, there’s a number of things going on here, not the least the PM having to have Dunne win the Ohariu electorate in November 2014 against a backdrop of an increasingly hostile populace for Dunne,

      So this seems in that vein to be a quick quick the patient has gone into cardiac arrest situation where Dunne is allowed the oxygen to plug His ‘plan’ and attempt to lift His flagging fortunes which in turn would lift those of Slippery the PM…

  10. Tracey 10

    Is Todd Mclay receiving full pay at the moment?

  11. Sable 11

    Yes I read the little weasel’s proposal regarding super in the Tory Times this morning. Blatant social engineering that benefits the well heeled at the expense of the poor.

    • johnm 11.1

      Hi Sable
      Agree 100% ” the little weasel”
      Problem he’s done an infinite amount more damage than any honest little real weasel could ever do! :-(

  12. bad12 12

    As a Labourer all my working life,(not all of it was worked, there has been plenty of forced downtime), i find Dunne’s wee options for retirement ‘interesting’,

    Labourer’s you will find, those who engage in the real physical labour in our economy are pretty much past their use by date by the time they hit 50, because of the hard physical nature of such work you will find that bone and muscle dysfunction become dramatically apparent in Labourers from age 50 onward,

    i do not propose to discuss this in terms of ‘Universal incomes’ or ‘full reviews of the benefit system’ as these two issues are not at present ‘on the table’ as a proposition being currently discussed by the serving politicians,

    i would prefer to look at this proposal not in comparison to any particular wishlist but simply the proposal itself,

    Dunne’s proposal of a 6% decrease in the payment of the pension for every year earlier than 65 at which a recipient chose to take that pension doesn’t do it for me, however, a 3% reduction in the payment per year of early up take would and i would happily sign up under a condition of 3% to be able to enter the ranks of the truly retired 5 years early,

    i assume Dunne’s proposal leaves in place the ‘living alone allowance’ and would involve a legislated change to the age at which a retiree could take up a gold card,

    i do not find Dunne’s original proposal all that heinous unlike the proposer Himself and it will be interesting to see whether this proposal grows any legs or is simply a convenient political distraction getting Dunne’s name into the media in an attempt to shore up His election chances…

    • Sable 12.1

      Well said Bad12. I’m sure there are plenty of tradespeople, builders also spring to mind who are physically past the demands of the job by the time they hit 50. I would wonder what form this policy would take as on the surface its highly discriminatory.

      I think too you are right its Dunne trying to shore up his tarnished image.

      • Greywarbler 12.1.1

        For sure, but it’s not a bee with honey and a sting, look again and it’s a wasp and nothing good will come from that.

      • bad12 12.1.2

        If there is anything ‘wrong’ with the current pension system i would suggest that allowing people to continue working while accessing National Superannuation is in fact ‘it’,

        i have no actual numbers of the number of people that actually do this, but, every person able to retire and collecting that pension while working is simply denying employment to a younger person in the economy,

        Am i proposing a solution to this, Lolz, no way, i like the skin i am in and to propose interfering in the payment of National Superannuation would be an open invitation to have myself flayed to within an inch of my miserable little life,

        However, if i were to make such a proposal it would center around not being able to work while collecting a pension and the housing costs of a pensioner being 25% of their total household income…

    • Wayne 12.2

      I am inclined to agree. 6% is just too much of a reduction and will put some people into poverty.

      It is generally agreed that NS is pretty reasonable when it is the only income you have. Not great, but OK. The majority of my aunts and uncles are in this situation. They get some help (small) from their children and do OK.

      Most were manual workers. They may have wanted the NS earlier, but it would have been much harder for them if say their income was reduced by 25% (accepting NS at 60).

      I appreciate actuarially that 6% might be right, but if so then the flexibility should not be more than 2 years.

      It also seems unfair that delay boosts income by 10% per year. Again actuarially correct, but it probably will favour healthy people in higher income jobs.

      So too big a deviation from age 65 will undermine the social contract that underpins NS. A dangerous thing to do.

      • Foreign Waka 12.2.2

        What kind of income are you guys on and are you all just a step away from retirement? If a person in their 40′s with an average income of 38k and renting wants to to keep their family afloat and save for retirement (hahahahaha) the living costs are far higher than some of you state here. Housing costs 25% – yeah right. There is POVERTY written all over it.

  13. Greywarbler 13

    What about a reduced rate and allowing for part time employment with no secondary tax or diminishment until 65, then the full rate with some diminishment of say 10 cents in the net $ (after tax on earnings) thereafter.

    That means that some people will be able to keep earning and afford a good lifestyle, and some will improve on just super, and the others will get sufficient to live on and be able to apply for extra help when needed.

    Also that superannuitants can get their full entitlement plus a bonus if they take on shared jobs where they work with up to four young ones to gain work experience. The olders helping the young ones get job training, experience and then a real job, a great idea surely. Also volunteer work of approved kind, with social welfare outcomes.be counted as special work and receives a bonus also.

    There is no reason why some old people should be doing nothing for the community while being given their living out of community funds. If they want to avoid such a system let them try to save enough in a private unguaranteed-by-government system from which they can receive payments, annuities etc. tax free. And see if they can live on that! Even with low inflation it probably wouldn’t stretch to buy more than the basics and a pair of support stockings per week.

  14. To be any sort of left, Labour should dump its proposal to increase the pension eligibility age.
    Maori and those who have to retire early for health reasons should have the pension at least 60 and indexed to their health parity status.
    The age of eligibility of the rest should be reduced to 60, and those in poor health etc also reduced downwards from 60, by one year per year.
    And by the way pay it at the ‘living wage’.
    Bring back Muldoon’s income tax rates that made the rich pips squeak.
    Tax loopholes should be closed, dodgy deals and crony favours stopped, tax havens closed down, CGT raised to 100% over say 10 years.
    All of this will clear out the financial parasites, land speculators, rent farmers and other non-productive parasites.
    This will create a sovereign wealth fund which we can use to try a bit of ‘socialism’.
    Of course the ruling class will try to pre-empt this by spying, media vomit, and a police state.
    It’s backdown or showdown.

    • Wayne 14.1

      Red rattler

      While this might be your socialist dream (but not one you will get from David Cunliffe), in the real world this would be completely unaffordable.

      It wasn’t affordable when Rob Muldoon was in power when the proportion of older NZer’s was much smaller and he had 66% tax rates.

      So it guess it is backdown (by you).

      • One Anonymous Knucklehead 14.1.1

        So you don’t think Cunliffe is the raving leftist bogeyman your leader asserts, Dr. Mapp?

        Not even his sycophants can sustain his lies eh ;)

      • Draco T Bastard 14.1.2

        in the real world this would be completely unaffordable.

        No, in the real world it’s affordable, on Planet Key it isn’t.

  15. feijoa 15

    I meet many people in my job as a health provider, and I would say the people who struggle to work up to 65 are those doing manual work – the builders / labourers / plumbers / construction / forestry / etc
    Those I meet who work well past the age of 65 seem to be accountants, lawyers, who “keep on a few clients”
    Can’t see that that’s fair

  16. Binders full of women 16

    Was it a Labour MP (de Cleene? Prebble?) or was it a National MP? who challenged someone to find a better superannuation scheme in the world? I can’t remember- doesn’t matter. But the answer is nice to remember. There isn’t a better system… some get more, some get it earlier or later, some are more but asset tested. But nowhere has a universal entitlement, at 65 years, at x% of the average wage.

  17. Descendant Of Sssmith 17

    First thing you could do if cost was an issue would be to stop allowing underage partners to be included.

    Second thing you could do would be to increase benefit rates so that those who are unable provide. to work as they get older have more income than the current benefits provide. You could even remove the age discrimination and pay all people the same rates.

    This would have the simultaneous effect of lifting all beneficiaries incomes, circulating more money in local economies and putting pressure on wages to go up thereby lifting lots of peoples incomes.

    Third thing you could to is increase taxes on people like me to help pay for it.

    Fourth thing you could do is to then allow people to earn the equivalent of super from other sources (thereby ensuring that you still have a reasonable income, can part-work and part-retire if you so wish) and still get it with no super at all if you choose to work full-time or close to it. We pay super for your retirement so you get it when you retire.

    • Greywarbler 17.1

      Add to 4th thing DoSS, medical rates that keep pharmacy costs and GP costs down even if these older people are still working full time. So they would be getting some advantage and it would be practical for the government as it helps them to keep working and earning and paying tax.

      Also bad12 there is no reason why an age benefit should not be paid even if earning, but it would be helpful rather than income provision, so enough to help with transport costs and medical costs so that people would not be able to yell that they aren’t getting anything if the main benefit was decreased as a result of income.

      Underage partners – there could be good arguments for allowing the married rate when one partner turns 65.

  18. millsy 18

    One only need go to places like the USA, where retirees live on the street, or work in burger joints and department stores, and employers (including the government) are busy looking for ways of getting out of honouring pension obligations, to see why changing NS would be a bad idea.

    • Descendant Of Sssmith 18.1

      Ours did used to be income tested however so going back to an income test isn’t getting out of honouring obligations. Just keep it simple.

      • bad12 18.1.1

        Yes perhaps the ‘income test’ is the best means of being able to lower the age of retirement, it would seem reasonably fair,(except to those who scream entitlement as they demand recipients of other Government benefits be continually ‘restructured’),

        An abatement rate attached to an age of eligibility of 60, so part time workers, especially taking into account the negative effects upon some who give up working, would receive a part-payment of their super while those who chose to work on full time would receive a severely rebated payment,

        Interestingly Slippery the Prime Minister in today’s Herald online makes the point that we as a country are spending less now on Superannuation than we were as a % of GDP back in the 70′s, He may as usual be talking from within the realm of a heavily flushing toilet bowl, but, is quoted in the same article dissing the Treasury over ‘it’s claims on the affordability of Superannuation payments in the future,

        The superannuation question is of relevance to those currently engaged in the Labour Party leadership contest as Labour seem to still have as policy the raising of the age of entitlement to 67, a policy i would suggest that saw Labour ‘flat-lining’ in the 2011 election campaign as many found this particular ‘major plank’ of Labour’s 2011 economic strategy abhorrent,

        Such policy as what Phill Goff went into the 2011 election campaign trumpeting is part of the reason why i ‘see’ Labour having become a Party of, for, and by the New Zealand middle class,such policy simply assumes that ‘everyone’ has been able to stash away a good little nest egg via their ‘Kiwi-saver’ and such policy seems to assume that those nearing retirement are all likely to have a rental investment or two with which to provide for them in their retirement,

        My opinion is that Labour need to revisit it’s policy on superannuation and get far far smarter with the approach to it or find that 2011 repeats as far as elections go with the ‘registered but did not vote bloc’ again staying on the sidelines…

        • karol 18.1.1.1

          Some good points, bad.

          I would like to see a wider reform of social security on the agenda for the next Labour led government

          • bad12 18.1.1.1.1

            Karol, that’s definitely a ‘me too’, but, when i look at the candidates in the current election race i find that all 3 seem to have stuck to ‘the vows of silence’ which Labour seemed to have taken at some point in the distant past,

            Issues of ‘welfare’ as well as the dire lack of ‘State Housing’ certainly havn’t been to the fore so far in this particular campaign,

            I have to believe that Labour can be ‘swayed’ on both these issues by the Green and Mana Party’s in post-election coalition negotiations,

            Metiria Turei being the Minister of Social Development would be a good point at where the discussions might begin…

            • Tracey 18.1.1.1.1.1

              will adern relinquish it bad?

              • bad12

                Lolz Tracey, Labour will not willingly ‘relinquish’ any of the Ministry’s to the Green Party except maybe Conservation and Climate Change,

                Of course, if the Green Party are in a position where to form a Government Labour must have their vote then the ‘game’ changes,

                My advice to the Green Party is to be seriously working on the Nitty Gritty of the coalition agreement and what the Green Party expects to gain across ALL Ministy’s for the Green Party to support a Labour Government after November 2014,

                Could i see Labour after November 2014 attempting to treat the Greens as lapdogs as the current Government treats the abysmal weak at the knees Maori Party, unfortunately Yes i could…

                • Tracey

                  God I hope you are wrong.

                  • bad12

                    Lolz Tracey, ‘it’ isn’t all that bad, David Cunliffe as leader of Labour would be a far better fit to build a strong coalition with the Green Party and Mana as well,(especially if the latter Party gains the 3 MP’s i am hopeful of in 2014),

                    A lot of what a Cunliffe lead Labour will enact in office the Green Party will be quite happy with,( us more radical lot here on the Standard will always be demanding the ideal),

                    What i personally will not resile from is the changing of Working for Families into a universal benefit for all children no matter if the parents of these kids work or not, and, a serious State House building program especially in the cities of Auckland and Christchurch where while beneficiaries are well catered for as HousingNZ tenants the lowest paid workers in the workforce are ‘trapped’, currently ineligible for a HousingNZ property, paying 40%+ of their miserable wage levels renting from the private sector,

                    That’s 2 pieces of Social Justice that as a Green Party member i see as my bottom line, hardly bank or coalition breaking stuff…

                    • Tracey

                      I can see the difficulty with releasing policy early because it immediately gets attacked and dissected BUT so far only the Greens appear to have a plan for how to attack poverty for children. Like it or not it is a plan. Everyone else is just paying lip service and claiming to want to end it.

                      Like you I remain a Green supporter and it will take some convincing to move me from this position.

                      Sadly Labour seem intent of “converting” National voters which means national lite if Labour leads our next government.

                    • bad12

                      Oh parts of Labour fully recognize that disallowing the children of beneficiaries inclusion in Working for Families was wrong,(including Annette King at the 2011 election),

                      It will not then, in my opinion, take much leverage from the Green Party to get a David Cunliffe lead Labour to agree to make that benefit universal in nature, a far far harder ask would be if either of the other two contenders were to win selection,

                      What makes the non-inclusion by Labour of ALL children an ugly look is at the time Working for Families was being introduced the money was there to do so,

                      The cost of including ALL children in a universal benefit???, approx 500 million dollars,

                      Labour instead chose to lower the business tax rate, the cost??? approx 400 and something million dollars,

                      Yes, Labour seems to be hell bent upon fighting with National over that 2-3% of the middle class vote in order to be able to govern,

                      This could be a reflection of the fickle nature of the 800,000 ‘registered but did not vote bloc’

                      If Labour continue as they have been it then behoves both the Mana and Green Party’s to become ‘more’ activist in areas of the wider electorate where they can see the ‘left’ vote growing,

                      The larger the Party vote grows for both Green/Mana the more Labour will have to concede to them in coalition agreements…

        • Greywarbler 18.1.1.2

          bad12
          Labour talking about 67 going to 70 for OAP to me smacks of their past purist appproach to policy of the dedicated utopian mixed with authoritarian. This is right, it will make everything right, and we will do it whether it hurts the people or truly serves the purpose, because we are right. Finding a system that manages the situation is what is needed, not a Treasury-like heaping of austerity and poverty.

          One thing could be to try to rein in expenditure with progressive claw backs for working pensioners till they receive just a basic. At the same time bring down what GPs can charge, and have government clinics if necessary, as some GPs are charging Gold Card holders (community cards) $40 a time. And prescriptions are now $5 an item (note not for just the prescription sheet, but each medicine on it).

          Putting more money into services like home help would be wiser for real assistance, but I hear in Nelson they are getting rid of District Nurses, but I can’t believe it. Also getting rid of the the practice of setting high salaries and expenses and FFS incentives! for CEOs, but instead putting jobs out for tender as Alan Gibbs I think suggested for the workers. It would actually be a good idea for these top job holders. And worrying that the best or right persons might not then be obtainable would have no credence, as the ones we have are often making a muck of it anyway. You can’t lose with my suggestion.

          And cutting down the very expensive last years of care by allowing the legal option of managed demise so that people who are ready to die can choose to go, and plan their end of life celebration before they get hopelessly beyond thought or celebration.

  19. Ron 19

    Interested in comments on Pensions
    Can someone please comment on the scheme that New Zealand used to have which if I remember correctly was Old Age Pension at 60 but means tested. and National Superannuation at 65 not means tested.
    You could possibly look at moving these ages up a bit say 65 & 70 but it seems that the idea of a pension for those that need it with no other source of income and a full pension for those that work longer but when you get it is set at a good level with no discrimination regardless of your income status. We seem to spend a great deal of money on tracking peoples savings/earnings or whatever when a truly universal Superannuation would get rid of all that.
    It seems a simpler system than what Dunne is suggesting.

    • bad12 19.1

      Ron, not wanting to be rude, but mostly finding that rude is my natural state, can i say Google is your friend,

      Perhaps you would like to find the time to undertake a little research and then post a comment here on what you ask other’s to find for you,

      We could then debate your conclusions if any…

      • Ron 19.1.1

        Don’t mind rudeness but I was not asking for people to search Google which would not give anything that would be useful. I was more interested in people that had been receiving super around that time if still alive, or alternatively what the general consensus would be on the two tier superannuation of early but means tested or later and no means test as an alternative to what Dunne was suggesting which I consider not really helpful at all.

        • bad12 19.1.1.1

          Yes we somewhat agree on that, i would lower the age of eligibility for the pension to 60 and ‘income test’ it up to 65 or 70 or somewhere between those 2 ages,

          From 70 onward i would suggest the full pension be paid without resorting to an income test, that is of course speaking off the top of my mind without seriously considering whether that would burden the Government with a large cash shortfall,

          Such a shortfall might of course be covered by moving the age of the full un-income tested pension out to 72,(or said in a whisper,temporarily adjusting the tax system to take into account both such a shortfall and the ‘bulge’ in coming retirements of the ‘baby-boomers)…

          • Greywarbler 19.1.1.1.1

            bad12
            There was a radio interview that touched on trusts and eligibility for government care this a.m. on 9toNoon. There will be more onerous or less relaxed investigation of people’s assets, depending on one’s point of view. This should limit the costs to the government for some of these extremely long-living people who are said to be developing into an expensive bulge for those supporting them and planning for their need of specialised services.

            There is considerable government work on seeing that trusts don’t skew incomes so much and put pressure on government coffers. The understandings on how to operate trusts have been wrong, but appeared reasonable because the Welfare Dept didn’t take the law into account and operated on a historical method which has now been revised.

            This has resulted in some very unhappy situations for people who thought that they had made prudent and advantageous decisions on the disposition of their assets.

            • bad12 19.1.1.1.1.1

              A bit different going after the people on the basis of ‘assets’ tho depending on what is actually proposed as ‘assets’,

              Being totally ‘Cloth Cap’ and having 30 years of Neo-Liberalism, and dare i say Neo-Socialism scarring my psyche i still refuse to remove that ‘Cloth Cap’ i look at everything based upon Need, and those comparative Needs weighed against each other when we consider the Class Society that we as a nation are fast redeveloping,

              If a recipient of the full pension, and no matter what age it is paid at it should start at the full amount, has assets that are generating an income i would leave their assets alone and abate the full pension based upon the income received,

              Some may have assets that they receive no income from where the asset, or the thought of the inheritance of, induces the wider family to take more care of their elderly relatives which is an ascribing by me of a mercenary attitude which may or may not be present in family relationships,

              i am sure tho that those who would propose setting the level of pension payments against the value of assets the recipient held no matter whether or not they accrued any income from those assets would have some quarters practically salivating in a lip licking fantasy of forced asset sales from the elderly, after all it would be that class of people most likely to be able to pick like vultures through such forced asset sales for their personal enrichment…

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