Understanding New Zealand Superannuation – and noting the pitfalls

We consider that New Zealand Superannuation is one of the most generous public pensions in the Western World.  You are entitled to receive the NZ Superannuation income when you turn 65 (subject to residency requirements), regardless of whether you are male or female and regardless of how much you have earned during your working life.

NZ Super is not means tested (working out how much you earn and reducing your NZ Super income based on how much you earn), nor is it asset tested (looking at how many assets you have and reducing your NZ Super income if you have more than a certain level of assets).

This means that everyone gets the same amount depending on their living circumstances.  If you are single and living alone you get a certain amount, if you are living with someone else in a relationship, and you are both entitled, you will get a certain amount each.  (For more information on the rates of NZ Super – click here https://sorted.org.nz/guides/retirement/this-years-nz-super-rates/)

The amount of NZ Super income is adjusted each year in relation to movements in the average wage, and is paid fortnightly after tax.  If you are earning more than $48,000 you may get a lower after tax amount than is shown on the website, as your tax rate will be higher than the assumed 17.50%.

However, there are some pitfalls that you need to be aware of:

  1. Residency requirements

At present, you need to have lived in New Zealand for 5 years from the age of 50 to 65, and in New Zealand for 10 years since the age of 20.  There are suggestions that these residency requirements will be toughened in the future – NZ First have a ‘NZ Superannuation and Retirement Income (Fair Residency) Amendment Bill that will increase the 10 years to a minimum of 20 years.

  1. Travelling overseas after the age of 65

If you are going to be overseas for an extended period of time – you need to let WINZ know.  It is recommended that you let WINZ know if you are away for more than 28 days, and if you are going to be away for more than 6 months you may lose your NZ Super income.  It is important that you know what the rules are – check this page out:


  1. Entitlement to an overseas pension

If you have worked overseas and built up a state pension, if you receive this amount as an income when you are entitled (which could be from age 60 or 65 depending on the country it is coming from), under the Social Security Act, the government has the right to reduce your NZ Super dollar for dollar if you receive an overseas pension.  Getting two state pensions is considered double dipping.

  1. If your partner gets an overseas pension

This may lead to the government offsetting your NZ Super as well, however there has been a recent change which will reduce the impact of this rule.

  1. Retiring to another country

There is no guarantee that you will receive a pension in another country if you move there to retire, or just before retirement.  For example, in Australia any state pension entitlement is asset and income tested, and this applies to NZ Superannuation income as well if you are living in Australia.  It is important that you research how that will impact on you if you are thinking of moving country, so that you can take it into account in your financial planning.


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