20 January 2021

There has been the option in New Zealand for many years now, that a non-qualifying spouse can be included in a qualifying spouse’s NZ Super payment. That means that when an older spouse turns 65 and qualifies for NZ Super the younger spouse can be included in the payments, albeit at a slightly lower rate than if both were to qualify in their own right. Once the younger spouse reaches age 65 then the full payment can be received.

However, it was announced in the 2019 ‘Wellbeing Budget’, this option would be removed. Effective 9 November 2020, if you have a partner and they don’t qualify for NZ Super (or Veteran’s Pension), you won’t be able to include them in your payments; they will need to qualify in their own right. If your partner doesn’t qualify and is currently included in your payments, you will keep getting this rate unless your circumstances change.

This is a significant change and will have quite a financial impact on some superannuitants. Under the previous rules, a couple with a non-qualifying partner would have received up to $35,508 per annum, before tax. From 9 November 2020 this reduced to $18,741, until the partner qualifies; a reduction of $16,767.

This highlights the need for careful financial planning to ensure you can retire at the age you choose, in a position where you can support yourself independently of any government benefits.

To review your financial plan or discuss how this change to super may impact you, contact our Wealth Management team.