Clearing NZ Super confusion
By Jamie Melbourne-Hayward
Local retired residents balked at the possibility of lower pension payments this month when the government announced their decision to suspend automatic payments to the New Zealand Superannuation Fund. But the decision to suspend payments will not affect New Zealanders? fortnightly NZ Super payments, says Retirement Commissioner Diana Crossan. ?The names may sound similar, but the New Zealand Superannuation Fund and NZ Super are quite different things,? she says. The New Zealand Superannuation Fund is an investment fund set up to help pay for the expected increase in the cost of New Zealand Superannuation from around 2030, but has no impact on NZ Super payments today. A New Zealand Business Council for Sustainable Development post-Budget ShapeNZ survey has found 53% of Kiwis believe National?s plan to defer payments to the fund for a decade will result in lower pensions. ?New Zealanders simply don?t believe John Key when he says his decade of deferrals will have no impact on Super entitlements,? says Labour Leader Phil Goff. In the 2009 Budget the government announced it will not be making automatic annual payments to the New Zealand Superannuation Fund until the government accounts are next in surplus. This is not expected to be for at least ten years. Mr Goff says, ?Interestingly the ShapeNZ survey also found 61% of New Zealanders believe National should not have promised tax cuts given the pre-election economic conditions. ?John Key broke his promise on tax cuts why should New Zealanders take his word on Super?? NZ Super is short for New Zealand Superannuation, the state pension paid to most eligible New Zealanders when they turn 65.? Current NZ Super payments are funded by taxation, and are not funded by the New Zealand Superannuation Fund. The government has also reiterated that it had no plans to change the current age of eligibility for NZ Super, which is 65 years. Maximum annual after-tax rates for NZ Super are currently $16,169 for singles living alone and $24,876 for couples. For more information about retirement saving visit sorted.org.nz
