60- plus, swindled and flat broke

Finding yourself with nothing close to retirement age can be daunting but owning a home again is possible

You’ve made an important first step — seeking help. Good on you.

I can’t think of a miracle fix for you. But I’ve heard of people in tougher situations — some with huge debts — who have turned things around. If you’re determined, I reckon you could still get yourselves a modest home.

The first step is to get your husband into KiwiSaver, if he’s not already a member. Unfortunately, it’s too late for you, as you’re past NZ Super age. But if your husband contributes at least $ 1043 a year — $ 87 a month — he will get the maximum annual tax credit of $ 521 for five years. That’s not to be sneezed at.

If your husband is an employee, he will have to contribute 3 per cent of his pay. But he will also receive a 3 per cent contribution from his employer, further boosting his savings.

After five years, he’ll be able to withdraw all his KiwiSaver money. And there may be more — a KiwiSaver HomeStart grant for previous home owners. If he contributes for five years or more, this totals $ 5000, or $ 10,000 for a newly built home.

Usually, the HomeStart grant is only for first- home buyers. For info on that see www. tinyurl. com/ NZHomeStart.

But if your husband doesn’t have “realisable assets ( assets that can be sold) totalling more than 20 per cent of the house price cap for existing/ older properties in the area”, he may qualify for what’s sometimes called a second- chance grant.

The realisable asset caps are $ 120,000 for Auckland, and $ 100,000 or $ 80,000 elsewhere. For more info see www. tinyurl. com/ NZHomePrevious

Some further suggestions for the two of you: Get a free budget adviser through the NZ Federation of Family Budgeting Services at www. familybudgeting. org. nz. The adviser will help you work out where you can cut spending and set up a savings plan. Get yourself a fulltime or part- time job, or set up a small business. I know it’s harder to get work when you’re not so young. ( Note to other readers: let’s not get into more correspondence about that. We’ve done that a while ago.) But many people work into their early 70s, often by creating their own job. Perhaps you could make and ice great birthday cakes. Or give advice on gardens. Or offer child care. Be prepared to move to somewhere where house are cheaper. Do what you can to keep healthy — eating well, getting exercise and so on. That will keep you earning and keep your expenses down. I realise all this might sound condescending. And you might not be able to do everything on that list.

But your history suggests you have drive and initiative and are not afraid of hard work. If you set yourselves ambitious but reachable savings goals — and allow for a bit of slippage occasionally without giving up — I bet you can do it.

Readers might have some other suggestions for you. Watch this space!

And by the way, not all con victims are stupid. I’ve heard of retired judges being scammed. I can see where we’re headed here. We’re talking about how much you can have in assets and still receive the subsidy for care in a rest home or private hospital. If your assets are higher than the threshold, you’re expected to pay towards the cost of care.

The rules for a couple, according to the Ministry of Social Development website, are:

“If you have a partner who is not in care, you can choose whether the total value of your assets is either: $ 120,416, not including the value of your house and car. $ 219,889, including the value of your house and car. “Your house is only exempt from the financial means assessment when it is the principal place of residence of the partner who is not in care, or a dependent child.”

I assume people who don’t own a house would go for the second option, because of the higher total for other assets.

But homeowners would surely always choose the first option. So both Bill and Ben and their wives would have to pay for their own care until their assets — except their house and car — get down to $ 120,416.

This happens right away for Bill, as he has only the house. But Ben and his wife would have to reduce their nonhouse assets — their shares — to $ 120,416 if they want to receive the subsidy.

This certainly seems unfair. And if Ben has children, I’m sure they would feel hard done by compared with their cousins, who stand to inherit a much better house.

But if you were the Government, what would you do?

It might seem reasonable to deny Bill the subsidy, saying he and his wife can trade down to a cheaper house and free up money to spend on care. But this has been their home.

And what should the cut- off house value be? In Auckland, many older couples live in fairly modest houses worth more than $ 1 million. Should they be obliged to move — perhaps a long way from their social networks — to fund one partner’s care? That could be a big ask of couples in their 80s or 90s.

They might be even angrier if their friends — in a house worth just below the cut- off point — can get the subsidy and keep their home.

And what about house price differences around the country? To be fair, the Government would have to set regional cut- off values. What a nightmare.

This is why the “exempt house” rule is there.

P. S. AmI the only one reminded of Bill and Ben the Flowerpot Men?

You’re a good example of what I was writing about last week — someone who needs the unemployment benefit for just a short time until they can set off on a new path. What a great “investment” for other taxpayers to make.

An excellent point for last week’s correspondent to ponder.

Total NZ Super payments are almost three times bigger than other core benefits, which include Jobseeker Support and emergency benefits, sole parent support and supported living payments. And on an individual level, some NZ Super payments are about double some Jobseeker payments. The dole ain’t no gravy train.

Whether wealthy people should receive NZ Super is a whole other question. At first it seems crazy. But in other countries where you have to pass income and asset tests to get a pension, many people cheat. And some of the richest people — or their expensive lawyers — are the cleverest at hiding away their assets in trusts or other family arrangements.

Also, it costs much more to administer pension schemes with such tests. You could argue the money might as well go to middle- income retirees — who can’t afford to set up schemes to hide their wealth — as to bureaucrats.

International experts praise NZ Super for its simplicity and fairness. I’m not convinced we should meddle with it. But I do agree that it can be hypocritical of recipients to be tough on welfare beneficiaries.

Mary Holm is a freelance journalist, a director of the Financial Markets Authority and Financial Services Complaints Ltd ( FSCL), a seminar presenter and a bestselling author on personal finance. Her website is www. maryholm. com. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to mary@ maryholm. com or Money Column, Private Bag 92198 Victoria St West, Auckland 1142. Letters should not exceed 200 words. We won’t publish your name. Please provide a ( preferably daytime) phone number. Sorry, but Mary cannot answer all questions, correspond directly with readers, or give financial advice.