Filed under: NZIS & Immigration issues, Retirement, Pensions and Kiwisaver
Quite a lot as it happens. Winston Peters has been speaking to the Party Faithful (of NZ First), and ranting about the pension age. Many economists say that getting a state pension at age 65 is unaffordable, and the age has to increase. Labour have said they will put it up to 67, National have said they aren’t moving, and Winston says anyone who claims that a state pension from the age of 65 is unaffordable is – well – wrong.
However – he also had a full on rant about immigrants and pensions – specifically Chinese immigrants who he does tend to have a particular beef with.
So what has he said?
“There is no ageing crisis. The pension age and the amount paid is affordable.”
However, the availability of NZ Super for recent immigrants was “a serious issue” for the affordability of the scheme, Mr Peters said, a comment which clearly resonated with party members at the conference.
“An immigrant can arrive here at the age of 55, pay no direct tax for 10 years and receive full New Zealand Super at 65,” Mr Peters said.
“A young couple from China, where there is a limit on family size, can bring in four elderly parents who don’t have to work here in the 10 years before they turn 65, yet they will all receive full New Zealand Super.”
He told reporters there were “possibly 22,000″ such immigrants eligible for NZ Super in the country now and that number was “rising quite rapidly”.
That figure came from “a very senior Chinese source” via a research group in the Chinese community but was not all Chinese nationals, he said. “New Zealand First is looking very closely at the situation. We believe the welfare of New Zealanders comes first.”
So, taking this point by point:
- In order to qualify for the NZ Superannuation, you have to have lived in NZ for 10 years, 5 of which need to be after the age of 50.
- This is a change from a few years ago when the rules stated that you had to live here 10 years, 5 of which had to be since the age of 55.
- This seems to be where Mr Peters is getting his “arrive here at the age of 55″
- This is not true – you have to be a RESIDENT for 10 years.
- This means if you sponsor your parents they have to gain residence by the time they are 55 or 60 at the latest if they have in fact had residency here previously.
- Having been a resident in NZ for 10 years does not in any way make you a “recent” immigrant.
- Since when is 55 years old sodding elderly? What the hell does this make 67 year-old Mr Peters? Fossilised???
- The chances of this Chinese couple managing to immigrate to New Zealand and get all four parents residence before the parents turn 55 are slim.Very Slim. (The Chinese do have better chances because of their one-child policy which makes eligibility to be sponsored easier).
- The chances of that happening and the oh-so-decrepit 55 year olds not paying some tax in some fashion (tax on interest, GST,Fuel Tax – and lest we forget they could very well also pay Income Tax!) are exactly how ginormous?
- Compared to thousands of Kiwis who have never had a job, will never have a job, receives benefits forever and still get NZ Super.
- And compared to many more who while they pay tax, get it back in the form of rebates, working for families, or tax refunds on businesses & investments.
- Who are the 22,000 immigrants who are eligible for super now, and have not worked for the whole 10 years that they have lived in NZ before they turned 65 and somehow managed to pay no tax?
- Who is the “very senior Chinese source” and where is the research?
- How many Kiwi’s emigrate elsewhere and do exactly the same thing?
I would like to think that the 200 hardy souls at the meeting actually thought about what they were hearing, and looked into just how unlikely it would be for sponsored parents to be eligible for NZ Super. It would be even nicer if the reporter had done a smidge of research.
BTW there is a new scheme whereby some people from certain countries can get paid NZ Super without having been here 10 years – but in cases like this (such as the UK) the New Zealand Govt takes your own state pension, and pays you theirs. You certainly don’t get something for nothing!
Filed under: Banks, Cost of living, Economics, Property & General Investing, Retirement, Pensions and Kiwisaver
Forced savings – in the form of compulsory superannuation (or – shudders – compulsory Kiwisaver) is back on the agenda in new Zealand. Because apparently, not enough of us are doing as we are told and opening up Kiwisaver accounts. So we need to be made to do it.
This comes out of the Tax Working Group, now we have to pay some more academics to sit around and tell us how we need to save for retirement and how we need to do it. I hope they get different people from the ones that just beat the living crap out of any Kiwi that was using Property to try and fund their retirement. Apparently that doesn’t count as retirement planning, cos it’s not shares or managed funds.
So when they talk about “Forced Savings” just be aware that what they really mean is “Forced Stock Market Investments”.
I personally believe that forcing people in a low wage economy like this to give up at least 2% of their after tax salary is just not on. The “theory” is that if we all do this – then it will cause investment in businesses (through the sale of shares) to increase, and those businesses will then be able to pay the staff more.
Because heres the thing (speaking as a complete non-economist here of course):
Buying shares on the stock market does not actually put money into the business. It puts money into the pocket of the guy selling those shares. If that just happens to be the company floating shares – then yeah – you just invested money in that company. Otherwise, some guy on the street sold some shares and you bought them.
BTW, we recently found out that if you work for one of the banks, which just happens to be a “Default Provider” of Kiwisaver (where you money sits if you don’t bother to actively choose a fund), they take their “Employer contributions” out of you salary. So basically, they don’t actually contribute to their own staff’s Kiwisaver fund.
Why is this not illegal, and why is it still being allowed? And how the hell does such a company get to run a default fund???
So regretfully – still not a fan of Kiwisaver, and would still like the government to keep its grubby little paws of my money thank you very much!
Filed under: Avalon's Money Thread, Cost of living, Retirement, Pensions and Kiwisaver, The Book and Website
This is something that I’ve actually had a lot of emails about recently, so I thought I would write a little about it and there seems to be some really whopping great misconceptions out there.
The main thing you need to understand is that you cannot double dip on your state pensions. You do not have the right to take a UK state pension and add it to any New Zealand superannuation you may be entitled to.
You just can’t.
If you choose to take the UK pension you are entitled to – it gets taken straight off any Superannuation you would get. There is a chapter in Avalon’s Guide explaining the nuts and bolts – but this is the bit you need to understand.
- If you are currently receiving the UK State Pension, the amount of pension you will get is frozen at the level it is when you become a resident of New Zealand.
- If you emigrate, and then later become eligible for the UK State Pension, the amount is frozen at the level it was when you left the UK.
- Any UK State Pension that you do get will be taken off any New Zealand state Superannuation you may be entitled to.
- This means that you cannot claim the UK state pension and add it to the New Zealand Superannuation.
- You can continue to contribute to the UK State Pension while you are resident in New Zealand if you wish.
- Any contributions that you make will increase your UK State Pension.
- Remember though that any increase you do gain will simply decrease the amount of New Zealand Superannuation you are entitled to.
As far as I’m personally concerned, I have not been expecting a state pension for the UK government since I was about 20 years old. The pensions system in most western countries is bankrupt, and there just isn’t the money to keep paying it.
You should also be aware that the National Insurance you pay in the UK is not being used to fund your retirement. It’s paying for the pensions of the people currently receiving a state pension. Your pension needs to be paid by future taxpayers. Thus the problem – there aren’t anywhere near enough people to pay it. The number of pensioners is growing, and the number of taxpayers isn’t growing anywhere near as fast.
And it’s no better here in New Zealand. As Gareth Morgan (an investment provider and somewhat annoying “guru” and “commentator”) says in his book Pension Panic:
If you think the government is going to keep you in the style to which you have become accustomed once you’ve retired, think again – unless you’re on the breadline now.
I just wanted people to be aware that this information is out there, and while I probably wasn’t able to think of everything that should go in a book about finances and emigrating to New Zealand, I really did think of most things. If you want to be prepared and not face these shocks, then read it. It may not always be fluffy – but it will mean you are prepared.