Latest news with #meansTesting
RNZ News
4 days ago
- Politics
- RNZ News
The Panel with Deborah Hart and Richard Pamatatau Part 1
Tonight on The Panel, Wallace Chapman is joined by panellists Deborah Hart and Richard Pamatatau. They discuss the idea that NZ Super should be measn tested. they do it in Australia, why not here? Also on the cards is outrage in Hawkes Bay over proposed hikes to water rates: some locals might find themsleves forking up to 7 and a half thousand bucks a year. To embed this content on your own webpage, cut and paste the following: See terms of use.
RNZ News
5 days ago
- Business
- RNZ News
Should superannuation be means-tested?
Retirement commissioner Jane Wrightson believes the government should be considering means testing what is currently a universal benefit, an idea she concedes is unpopular. Data from the 2023 census shows more than 9000 people aged over 65 earn more than $200,000 a year. Another 33,000 earn between $100,000 and $200,000. Treasury estimates superannuation costs the government about 18 cents of every dollar it collects in tax, or more than 24 billion dollars this year. Honorary Associate Professor of Economics at Auckland University, Susan St John, spoke to Lisa Owen. Tags: To embed this content on your own webpage, cut and paste the following: See terms of use.
RNZ News
5 days ago
- Business
- RNZ News
Thousands of over-65s earn more than $200,000 - should they get NZ Super?
Photo: 123RF More than 9000 people aged over 65 earn more than $200,000 a year, and another 33,000 earn between $100,000 and $200,000 - and the Retirement Commissioner says it's fair to question whether they should be able to claim NZ Super as well. The data comes from the 2023 Census. The number earning between $150,000 and $200,000 has decreased from 2018 but the number earning between $100,000 and $150,000 has lifted by 10,000. The Census also showed that the number of people over 65 still in the workforce had increased. Just over 24 percent of people aged over 65 were in work, up from 22.1 percent in 2013. The biggest increase was among people aged 70 to 74. Retirement Commissioner Jane Wrightson is opposed to putting the age of eligibility for NZ Super. She said if there were questions about the cost or fairness of the scheme, they needed to be addressed with a package of measures. Retirement Commissioner Jane Wrightson. Photo: supplied "Then you absolutely have to look at means-testing again . It's really unpopular but it would be improper if we didn't look at all the sensible options if the goal is to reduce the cost to the state." She said the problem to be solved needed to be defined and then the possible solutions assessed. "Means testing is absolutely one of those options but politicians run away from it because it's got a pretty ugly history and it does make it a more complex system. There's no doubt about it, people will start arranging their affairs and start avoiding tax and all that kind of stuff. "But if you boil it down to a very simple thing - is it right that someone earning over $180,000 or $200,000 - I think $180,000 is probably about the mark because that's when the tax rates go up - is it right that people out there earning over $180,000 can also acquire Super, it's an extremely good question." She said it would be easy to capture the earnings of people being paid a salary while receiving NZ Super but much harder to assess other income. "It's both complicated and it's easy. The easiest thing is to leave well alone. The next easiest thing is to just put the age up but that is too easy because there is harm attached to that…. So that's what I'm talking about when I say please could we have a package if we do any system change at all and can we please stop talking about this as single issue?" She said there should be a cross-party political conversation to determine a path forward. University of Auckland associate professor Susan St John. Photo: RNZ / Cole Eastham-Farrelly University of Auckland associate professor Susan St John earlier outlined a plan to treat NZ Super as a tax-free basic income grant and put recipients on a higher tax rate. She said it would be a better option that the age of eligibility or the amount paid. It would create a situation where there was a break-even point beyond which people would be better off, on a net basis, not claiming NZ Super and instead being taxed at standard rates. She said the tax scales she had modelled were less harsh than the abatement that applied to people receiving a benefit. The government has introduced parental income tests for young people receiving the JobSeeker benefit and will restrict access to the member tax credit in KiwiSaver to those who earn more than $180,000. St John said the reason that similar moves weren't made on NZ Super might reflect historical attitudes towards the "deserving and undeserving". She said NZ Super was effectively income-tested through the tax system because people who were earning other income would pay higher rates of tax. "Just far less draconian than the clawbacks for children with Working for Families and adults in the benefit system." Simplicity chief economist Shamubeel Eaqub said means and income testing in Australia meant that only about 60 percent of the population would qualify for the pension. If that were true in New Zealand, it could save about $9b a year. There are 74,850 people aged 30 to 64 earning more than $200,000. The median income for people aged over 65 is $26,600. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Daily Mail
09-06-2025
- Business
- Daily Mail
BREAKING NEWS Reeves' humiliation on winter fuel: Millions of pensioners WILL get allowance but others will have to pay it back in tax as floundering Chancellor completes her U-turn
' humiliation on winter fuel was confirmed today as she restored the payments to nine million pensioners. The Chancellor has announced that more than three-quarters of older people will get the allowance - worth up to £300 - this winter. But another two million on incomes of more than £35,000 in England and Wales face having the money clawed back in higher tax bills. That has already sparked alarm at the government having to pursue bereaved relatives. The move is the culmination of a shambolic volte face on the hated policy, which has been blamed for the dramatic plunge in Labour's popularity. It wipes out the overwhelming bulk of the savings Ms Reeves had originally pencilled in from slashing the previously universal allowance, so that only the poorest received it last winter. The Treasury will now save just £450million compared to 2023-24. The Tories demanded Ms Reeves and Keir Starmer apologise for making vulnerable elderly people choose between 'heating and eating'. But, extraordinarily, Ms Reeves again argued today that she was right to make the cut. 'Targeting Winter Fuel Payments was a tough decision, but the right decision because of the inheritance we had been left by the previous government. 'It is also right that we continue to means-test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest. 'But we have now acted to expand the eligibility of the Winter Fuel Payment so no pensioner on a lower income will miss out. 'This will mean over three quarters of pensioners receiving the payment in England and Wales later this winter.' All pensioners will automatically be paid winter fuel this season. But those whose incomes are above the threshold will see it recouped later through PAYE or a Self-Assessment return. People who wanted to opt out of the payment altogether will be able to do so, with a mechanism to be confirmed. Ms Reeves will not spell out how she is funding the overhaul until the Budget in the Autumn. The Chancellor is due to lay out departmental allocations running up to 2029 - the likely timetable for the next general election - on Wednesday. But the generous fiscal envelope set at the Budget last Autumn has been put under massive pressure by the economic slowdown, calls for more defence cash, and Labour revolts on benefits. Ms Reeves has signalled she will announce real-terms increases to budgets for police as she tries to quell Home Office resistance. However, that is likely to be offset by cuts to other areas, with the NHS and defence sucking up funding. The political backdrop to the proposals this week is the Reform surge, with Labour panicking about the challenge from Nigel Farage. Tory leader Kemi Badenoch said: 'Keir Starmer has scrambled to clear up a mess of his own making. I repeatedly challenged him to reverse his callous decision to withdraw winter fuel payments, and every time Starmer arrogantly dismissed my criticisms. 'This humiliating u-turn will come as scant comfort to the pensioners forced to choose between heating and eating last winter. The Prime Minister should now apologise for his terrible judgement.' Introducing a tough means test on winter fuel allowance was one of the first announcements Ms Reeves made after entering No11, and has been blamed for triggering the headlong slump in Labour's popularity. Only those on the lowest incomes, receiving pensioner credit, have been entitled to the handout. Keir Starmer dramatically announced a U-turn last month, without saying what exactly was being proposed or when it would take effect. Last week Ms Reeves confirmed confirmed the changes would be in place 'this winter' – but was still unable to say who will qualify. She also said the Government will not set out how the reinstated payments will be funded until the Autumn Budget. Designing a cost-effective means test for the benefit - which ministers are adamant should not be paid to 'millionaires' - has been causing major headaches for officials. The idea has been condemned by unions amid fears bereaved families could be hit with unexpected demands for cash. Labour insiders have voiced alarm at the 'optics' of trying to recoup the allowance from the estates of those who died after getting it.
Telegraph
04-06-2025
- Business
- Telegraph
‘Millionaire' pensioners will not get winter fuel payments
'Millionaires' will not be eligible for winter fuel payments this year even after the Prime Minister's about-turn on cuts to the scheme, the pensions minister has told MPs. Torsten Bell said there will be no return to the system under which all pensioners were given as much as £300 per year to help cover the cost of heating in the cold months. 'Is there any prospect of a universal winter fuel payment? The answer is no,' he told the Commons work and pensions committee. 'Most people – 95pc of people – agree that it is not a good idea that we have a system paying a few hundred pounds to millionaires. But we will be looking at making more pensioners eligible.' Rachel Reeves, the Chancellor, sparked a backlash last summer when she announced restrictions on payments shortly after Labour won the general election. The party had not made any reference to the idea in its manifesto or election campaign, but the policy was cited as evidence Labour was serious about reining in excessive public borrowing. Mr Bell declined to set out the exact terms of the loosened means test which will replace the current system, under which pensioners only receive the winter fuel payments if they also claim pension credit. He also said that income, not just wealth, could form a part of the qualifying criteria. 'We are committed to the principle that there should be some means testing, and that those on the highest incomes shouldn't be receiving winter fuel payments,' he said. 'Fairness is an important part of it. My priority is those who are on lower incomes but have missed out.' More than a fifth of all households aged over 65 have assets worth £1m or more, according to the Office for National Statistics, including their homes, pensions and other wealth. Mr Bell's comments indicate that, if millionaire status is the qualifying criteria, more than 2.5m pensioner households stand to miss out on the restoration of winter fuel payments as a result. Baroness Altmann, who served as a pensions minister under the Conservatives, said this would risk penalising those who are well off on paper but have little cash to cover energy bills. She said: 'Very often people are asset rich and income poor. Just because you live in a house worth £1m in London, which you might have bought for £20,000, does not mean you have got plenty of money to spend. You can still be on a very low income. 'If you have big expenses for a house, if your house is not very well insulated, and especially if you are poorer and have not been able to spend a lot of money on updating, then they will need more money for heating than younger families.' She favours offering winter fuel payments to all pensioners whose income is below the higher rate tax threshold of £50,271 per year. 'The most logical decision would be to treat it like child benefit, and if you pay higher rate tax then you do not get it,' Baroness Altmann said. 'If you pay higher rate tax, the Inland Revenue knows, so could adjust your tax code or find some other way to make sure you do not get the money.' It came as Ms Reeves confirmed that the new arrangements will be in place to give the payments to more pensioners this winter than last. 'People should be in no doubt that the means test will increase and more people will get winter fuel payment this winter,' the Chancellor said.
