Isaac Davison is a NZ Herald political reporter.

English's Super policy may not survive election

Nats' likely coalition partners as well as political opponents have roundly rejected idea of retirement at 67.

Prime Minister Bill English's proposal to lift the retirement age to 67 may not survive past the election after National's likely coalition partners and opponents roundly rejected it.

The major policy shift by National is not scheduled to take place until 2037. It will affect every New Zealander under 45.

It is also set down to pass into law next year, meaning its progress will hinge on the general election result in September.

Labour said it would not raise the age if it came into power at the election - a position which was backed by its campaigning partner, the Greens.

New Zealand First, which could hold the balance of power after the election, is firmly against lifting the eligibility age. However, leader Winston Peters praised a separate proposal to require immigrants to live in New Zealand for twice as long - 20 years - to get access to NZ Super.

National's support partners United Future and the Maori Party are also against lifting the age to 67. The only supporters of the idea were the Act Party, but it wanted the threshold lifted immediately. English was "taking the proverbial" by leaving it to 2037, Act leader David Seymour said.

Even if National was able to form a Government after the election, English conceded he could leave the eligibility age at 65 if that was a bottom line of National's coalition partners.

Labour leader Andrew Little said yesterday that National had "stumbled into" the announcement, and there was no case for raising the age of eligibility.

"Life expectancy may have changed, but bodies wear out pretty much at the same rate as they always have done."

However, Little said he thought the proposal to double the residency requirements for NZ Super was "about right".

Green Party co-leader James Shaw said any changes to NZ Super needed cross-party consensus if they were to survive the 20 years until the policy kicked in.

English had undermined any consensus by making the announcement in election year and turning it into a "political hot potato", he said.

The Maori Party wanted the superannuation age lowered for Maori and Pacific Islanders because their life expectancy was lower than non-Maori.

English ruled that out yesterday, saying the life expectancy gap could well have closed in 20 years' time.

He also rejected suggestions the proposed changes to superannuation would dent National's re-election chances, saying they would instead "enhance" them.

The proposals were made possible by the National's change of leadership. Former Prime Minister John Key pledged he would resign before tightening Super's eligibility rules.

English said he discussed the issue with Key on Sunday, and joked that the former Prime Minister supported all decisions made by the new leader.

Personal finance commentator Mary Holm said the policy was "a big improvement on [John] Key's absolute refusal to even consider it".

Many people aged under 45 would not expect NZ Super to be as generous as it currently is at the point they turned 65, so the decision to make the change in 20 years' time could be smart politically, Holm said.

It would be important to address the problem of people in manual jobs being unable to keep working beyond 65.

"But, then again, by the time we go 20 years down the track there are probably not going to be people doing physical work. Fewer and fewer are doing it now."

English justified the changes by saying the scheme was forecast to become unaffordable, and because New Zealanders were now living and working longer.

NZ Super was relatively affordable now, he said, but was expected to rise from 5 per cent of GDP to 8.4 per cent by 60 years. The proposed changes would save the Government $4 billion a year, or 0.6 per cent of GDP, once fully phased in.

Both policy shifts fell short of recommendations by the Retirement Commissioner, who wanted the age lifted in 2027 and the residency requirement lifted to 25 years.

Q&A:

Will the Super changes affect me?
If you are born on or after July 1, 1972, yes. You will have to wait until you are 67 to get your pension. But you will still be able to access your Kiwisaver at 65.

What if I'm born on June 30, 1972, or earlier?
Nothing will change. You will still get NZ Super when you turn 65.

What if I'm an immigrant?
If you're a resident or citizen in New Zealand now, nothing will change. You will still get Super if you live in NZ for 10 years (five of those years after 50).
If you arrive after the law is changed (possibly next year), you will have to live in NZ for 20 years to get Super, five of them over the age of 50.

Will I still get my SuperGold card at 65?
Not once the retirement age is lifted. The age for a SuperGold will go up to 67 too.

Will the payments change?
No. they will remain at 66 per cent of the average wage (currently $335.50/week per person for a married couple or $443.50/week for a single person living alone)

What if I'm rich? Will Super be means-tested?
No. There are no plans for asset testing or income testing.

Word on the street

Do you think raising the age for superannuation to 67 is a good idea?

Video

Harinder Sikka, 24
To be honest, it's not going to work with the New Zealand economy. There's so many students coming in, and they want students coming in as they're a main source of income. If you increase the retirement age, there'll be fewer jobs.

Tomomi Bartley, 42
65 is still quite young to retire. I know lots of people who want to continue working when they're 65. It's a good idea.

William Simomura, 31
I think it's a good idea. You still need people in the workforce. In the United States the retirement age is 62, and I think it should be raised there as well.

Casey Walker, 24
People are working hard until they're 65, it's a good age to retire, that's what people expect.

Nick Delmont, 25
It really depends on whether people have the ability to work a bit longer. It was a bit of a pain as it was.

John Kim, 24
In my personal opinion it's a good idea. They're telling us that a lot of youngsters will have the opportunity to work a lot harder. I'm not concerned [about raising the age], it doesn't really bother me.

Fawas Palathingal, 34
It depends on the person themselves. If you're giving people more of a chance to work, then I think it's better for them.

Ian Leslie, 59
I think it's a good idea. It had to happen, it should've happened a long time ago. It's one of the only things I disagreed with John Key on. With the population increasing the way it is, there has to be some sort of turnaround.

- NZ Herald

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