Superannuation Know How

Question

I am just about 65, my wife is 59, and in the last few weeks I have been to WINZ to link up with my New Zealand Super payments.  We have friends that are a similar age and they both get the Super. I think I’m right in suggesting that we can too. Can you explain how please.

Answer

Since the removal of the surcharge regime some years back all New Zealanders over the age of 65 are eligible for New Zealand Super (NZS). This means that regardless of assets or income everybody has a right to the NZS, subject to meeting the residency criteria as set out in the legislation.

There are a number of factors to consider when applying for benefit payment if you, or your partner, are yet to reach 65. Essentially you are both right and wrong in your question. Right, in that you could both receive payments if you applied and wrong, in that if you have other income from any source, including from a family trust or any other arrangement, your wife may not be eligible to keep all her share.

When considering the NZS benefit and one partner is over 65 and the other isn’t you can apply provided you have little (under $2,600 per annum) of other income. The rate you are entitled to is the married rate (even though you might live together in a Defacto relationship it is available). The sting is that second benefit is abated steadily if you have more than that income sum and once you have more than $4,160 per annum of other income the abatement rate is 70 cents in the dollar. The net effect being if you have around $15,000 to $16,000 of other income the total second benefit is lost.

Beware; A little known trap when heading off for that well deserved, long, overseas sojourn after retirement. If you are receiving NZS you must only be away for a limited period and must give notice to WINZ of your travel plans. You can only remain eligible if you remain in New Zealand for 183 days in any 365 day period. If you don’t WINZ may suspend your NZS.

Original Article published June 2006