NZ Super age steps up to 67 by 2040

Prime Minister Bill English has announced the age for state superannuation will rise to 67 in gradual steps starting in 20 years time.

The changes will be phased in from July 2037 and will not affect anyone born before June 1972. The age would lift to 67 in 2040. English said Kiwis were living longer and healthier lives, so adjusting the long-term settings for superannuation while they had time to adapt was the right thing to do. The law would be changed next year to bring the new qualification rules into effect.

The plan would see the age of entitlement for NZ Super rise by six months each year from July 2037 until it reached 67 in July 2040.

So everyone born on or after January 1, 1974, will have to wait till they are 67 to be eligible for NZ Super.

There would be no change to the indexation or universality of superannuation.

But the Government is planning to double the residency requirements for NZ Super so that applicants must have lived here for 20 years, with five of those after the age of 50.

English said that even after the change, someone who retired at age 67 in 2040 was likely to receive NZ Super for longer than someone who retired at age 65 today.

‘‘That is because average life expectancy is increasing by about 1.3 years each decade.’’

He said the Government had a strong track record of supporting older New Zealanders. Since 2008, weekly payments to superannuitants had increased by 35 per cent after tax while inflation had increased by 14 per cent.

‘‘Gradually increasing the retirement age from 2037 will more fairly spread the costs and benefits of NZ Super between generations, ensure the scheme remains affordable into the future and give people time to adjust.

‘‘It will also bring New Zealand into line with other countries like Australia, the United Kingdom, Denmark, Germany and the United States which are all moving to a retirement age of 67.’’

"Gradually increasing the retirement age from 2037 will more fairly spread the costs and benefits of NZ Super between generations, ensure the scheme remains affordable into the future and give people time to adjust. It will also bring New Zealand into line with other countries.'' Prime Minister Bill English

English said the Government was announcing the change now so that political parties could debate superannuation transparently in the lead-up to the election.

The Government said eligibility for the Supergold card would increase in line with the super age.