NZ Super still not understood
With all shenanigans going on in poli-
the tics recently – what with the brutal takeover of an existing party and the creation of a new one, to mention just a couple – one would be forgiven for getting more and more confused as the general election approaches.
But there is one thing which most politicians seem to have in common: the ability to fudge facts and promulgate them, still fudged. Take, for instance, the recent statement made by Hekia Parata in a local paper, headed ‘‘Elders better off’’. Incidentally, Ms Parata is not the only person making these statements. They appear to be generally circulated by other MPs as well.
The first claim Ms Parata makes is as follows: ‘‘Superannuation is adjusted when wages increase, to keep payments at 66 per cent of the average wage. The Prime Minister has committed to maintaining this entitlement for all superannuitants. These measures, combined with the tax cuts introduced last year, have left those who are superannuitants better off.’’
The facts: NZ Super is not adjusted when wages increase. Aside from adjustments arising from tax changes, increases in wage rates can only result in NZ Super increases when wage rates increase by more than the CPI.
Also, the Prime Minister has not committed to maintaining a 66 per cent relativity to average wages for all superannuitants.
His commitment has been restricted to 33 per cent for each partner qualifying for the couples’ rate, 42.9 per cent for individuals on the ‘‘single, living alone’’ rate and 39.6 per cent for individuals on the sharing’’ rate.
Second claim: ‘‘Under this National-led Government, superannuation payments have increased by 6.85 per cent in the past year.
Since September 2008, the increases have been even bigger. The amount for married couples, who are both eligible for superannuation, has increased by $166 a fortnight or 18.9 per cent.’’
The facts: The 6.85 per cent increase is in NZ Super net rate payments, and results mainly from tax changes. It is irrefutable that the recent tax changes have delivered much more to ‘‘ average to higher income’’ earners than to superannuitants. Grey Power challenges the Government to commission a specific study of ‘‘cost of living’’ increases of 65-plus’ households, expressed in dollar equivalents rather than percentage terms.
Our experience is that Super monetary increases have not matched the actual dollar value cost of living increases.
Third claim: ‘‘ We also provided a special immediate one-off increase to superannuation payments, to compensate for the October 1, 2010 rise in GST. This increase was permanently built into payments by the annual general adjustment on April 1,
‘‘single, 2011.’’ The facts: The permanent adjustment in NZ Super applying from April 1, 2011, recognises only those GST increases which might have filtered through the system in the three months to December, 2010. The extraordinary CPI increase in the March 2011 quarter indicates that much of the GST impact is still finding its way through the system.
The increases still occurring will not be recognised in NZ Super adjustments until April 2012. Therefore, the Government’s prefunding of the increases arising from GST, represented by the ‘‘ temporary adjustment’’ withdrawn on March 31, 2011, has been removed too soon, to the distinct disadvantage of superannuitants.
I suppose it is too much to expect all politicians to understand these niceties, but if they are going to make public statements, the least they could do is get the facts right.
Last month we held our annual meeting which was relatively well attended. This month, our own Margaret Faulkner, who is an elected member of the Capital & Coast DHB, will give us her thoughts on issues arising from the budget.
Date: Tuesday, June 14. Time: 1.30pm. Venue: The Porirua Club, Lodge Place, Porirua. Phone 236 0112.