Saturday, November 27

The number of retirees earning more than $ 200,000 triples in a decade

The number of people 65 and older who receive retirement payments while receiving income of more than $ 200,000 has more than tripled over the last decade.

Most retirees will eventually depend on retirement.

Most retirees will eventually depend on retirement.
Photo: 123RF

Superanuitants are the largest group of beneficiaries in New Zealand and as the annual Super bill increases, so does the number of high-income beneficiaries.

Treasury figures published at Control show in 2009/2010 there were 2209 people who had incomes of more than $ 200,000 a year getting super. By 2019/20, that number had risen to 7,860.

Retirement Commissioner Jane Wrightson said it’s not a problem, and the success and ease of the current system is that it is universally applicable.

“If people have a lot of freelance money, should they also be eligible for the Super? It’s a good policy question,” but Wrightson said the only answer is the means test, which has been roundly rejected by New Zealanders. several times in the past.

“Is it a big problem for the country? No. I can see that it could raise equity issues, but there is no easy way to solve it unless people are penalized for providing for their own retirement in addition to expecting a Super,” said. said.

But Wrightson said the retirement plan’s success could bring lessons for other parts of the welfare system.

“Indeed, we do not have pension poverty in this country. We have child poverty; we do not have pension poverty. Why don’t we have pension poverty? Because we have a good retirement income system, a modest one, but a good one.

“And I think there could be lessons to be learned about how it is administered, if the current systems for different types of welfare benefits have become too cumbersome.”

Core Crown spending on retirement pensions and social benefits in New Zealand, year ending June 2020.

Core Crown spending on retirement pensions and social benefits in New Zealand, year ending June 2020.

Public policy researcher and Jenesa Jeram, author of the NZ Super report He said the growing number of well-paid retirees is a strength of the system, because it does not discourage people from staying at work.

But he said retirement is generally expected to provide a more comfortable standard of living than beneficiaries, when in reality both should be treated equally.

She believes that small changes can be made to lower the overall cost of retirement, including increasing the age of eligibility so that it is more in line with older people’s work patterns.

“At the moment, NZ Super is indexed to both wages and inflation; in the future, governments may only want to consider indexing NZ Super to inflation, just because it contains the costs and leaves more money for others. groups in need, “she said.

But raising the retirement age poses significant problems for some groups: only 5.6 per cent of NZ Super beneficiaries are Maori and 2.6 per cent are Pasifika.

Jane Wrightson said there is usually one group that does particularly well on Super.

“When you look at women, Maori and Pasifika, all of whom reach retirement age in a materially worse situation, generally speaking, than others, the observations that say ‘we have to increase the age’ are put back highlighted.

“Indeed, older men in Pākehā do better with this system,” he said.

Massey University Maori Business Unit Economist and Co-Head Te Au Rangahau Dr. Matthew Roskruge said that while every effort should be made to pay everyone the pension they were told they would receive, that it had costs elsewhere.

“That comes in return, to be able to give kai for free in schools, to be able to give, to be able to build or give people access to housing, education, health.

“Maybe high-income retirees should be subject to a tax increase, [or] Some other way to reduce that burden so that we can reallocate funds to where they are most needed, “he said.

Inequality researcher Max Rashbrooke said equity was at the center of how retirement worked, in contrast to other parts of the welfare system.

Retirees get this benefit from the government, universally and without being asked any questions, while beneficiaries have to go through the scariest range of obstacles, face incredibly intrusive or stigmatizing questions, and are generally treated poorly by the system, said.

“I would like us to use this data as an opportunity to think not about how we could treat pensioners worse, but about how we could treat other beneficiaries better.”

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