New Zealand Superannuation Explained

New Zealand’s superannuation system is a real asset for this country. It’s a virtually universal payment that has been credited with keeping older generations out of poverty.  Anyone who turns 65 is eligible, provided they meet residency criteria. 

So how does the scheme actually work?

What is it?

NZ Super – or the pension as many people call it – is a regular payment that is designed to help older New Zealanders cover their costs of living when they are no longer necessarily able to remain in employment. It is paid to eligible people over the age of 65. 

Who is eligible?

Payments are available to anyone over 65 who is a legal resident of New Zealand. At the moment, you have to have lived a minimum of 10 years in New Zealand since the age of 20 to qualify. The rules are being changed, though, to require a 20-year minimum spent living in New Zealand, the Cook Islands, Niue or Tokelau, including five years after the age of 50. The change is being phased in and will only apply in full to people who turn 65 after July 1, 2040. You can be working and receive NZ Super, and it is not assets-tested.

How much is it?

Payments increase each year and are indexed to inflation and 66 per cent of the national average wage. As of April 1, 2022, a single person living alone would qualify for $538.24 a week before tax and for a couple where both people qualify for $817.32. If you’re a single person sharing a house, you are paid $495.10.

Is that enough?

While the amount paid is nothing to be sniffed at, there’s a warning that for many people it will not sustain the sort of lifestyle they are looking forward to in their retirements. Massey University’s retirement expenditure guidelines for 2021 showed that the pension would not cover most retirees’ expenses. A two-person household in a city centre living a “no-frills” life would need $195,000 in savings to supplement NZ Super, the researchers said.

What if you get an overseas pension?

If you’ve spent some of your life overseas, you may be eligible for another country’s superannuation payments, too. Depending on which country, you may find that those payments offset your – or even your partner’s – NZ Super payments. This has been a contentious issue, particularly for people who argue that the payments they receive from overseas include the money they have contributed to those schemes themselves.

What happens if you move overseas?

It is possible for people receiving NZ Super to move overseas and still receive payments, in some instances. There are social security agreements in place between New Zealand and a number of countries, which allow Kiwis to receive benefits and pensions offshore. This may mean you qualify for a local payment instead. 

You can’t get NZ Super if you move to the UK, for instance, but you may qualify for a UK pension. If you move to Australia, you’ll need to meet the Australian age criteria to qualify for their pension, but you will probably be able to continue to receive NZ Super for 26 weeks first. Work and Income suggest pensioners talk to its international services team before they leave to understand how they might be affected.

Like to know more?

We can help you understand how NZ Super will fit in with the rest of your retirement plans. While it’s a useful addition to the financial picture, it’s unlikely to be the full story and we can help ensure all the other aspects are taken care of. Give us a call today.



The information contained in this publication is intended for general guidance and information only. It has not been personally prepared for you. Therefore, you should not act on this information if you have not considered the appropriateness of this information to your personal objectives, financial situation and needs. You should consult with us before making any investment decision. Historical market performance may not be indicative of future market performance.

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Product Disclosure Statements for the Britannia Retirement Scheme and the Integral Master Trust are available from the Schemes' issuer, Britannia Financial Services Limited, phone 0800 500 811. Financial Advice Disclosure Statements are available for Britannia Financial Planning Limited here and for Britannia Financial Services Limited and Britannia Nominees Limited here.

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