Source: Radio New Zealand
the Retirement Commissioner says retirees need to be allowed to have more money in their KiwiSaver accounts and still receive the accommodation supplement. RNZ
Retirees need to be allowed to have more money in their KiwiSaver accounts and still receive the accommodation supplement, the Retirement Commissioner says.
The accommodation supplement is available to people who need help with their housing costs, including pensioners.
But applicants need to have assets of no more than $8100 per person to qualify.
Retirement Commissioner Jane Wrightson said that was too low and people with even relatively small KiwiSaver balances could find they could not access support.
The average KiwiSaver balance is about $30,000.
“We’ve been concerned for some time that the accommodation supplement’s cash asset test is set far too low and, because KiwiSaver becomes fully accessible at 65, even modest balances can affect eligibility. The limit has sat at $8100 per person since the supplement was introduced in 1993, and has never been adjusted for inflation,” she said.
Retirement Commissioner Jane Wrightson. supplied
“In our 2021/22 Review of Retirement Income Policies, we recommended that the government increase the cash asset threshold to at least $42,700 per person so the supplement can better reach low income retirees facing high housing costs.
“More broadly, this issue underlines the need for a long term policy framework and a cross party accord. Retirement settings interact, so NZ Super, KiwiSaver, and targeted supports like the accommodation supplement, so changes in one area can create unintended consequences elsewhere. Our 2025 review calls for planning, stewardship and political consensus to avoid short term fixes and provide New Zealanders with certainty and trust in the system.”
Shirley McCombe, general manager at Bay Financial Mentors, said the supplement scheme needed a comprehensive review.
“Firstly, the current supplement does not reflect actual rental costs, forcing clients to allocate a significant portion of their basic benefit or superannuation to cover accommodation expenses.
“Secondly, while we encourage people to save for retirement, the system effectively penalises them for doing so. Individuals must deplete their savings to $8000 before qualifying for assistance. This approach feels counterproductive and directly conflicts with the message we give Kiwis about planning and saving for their future.”
Another financial mentor, Fiona Govender agreed.
“This is a very real problem as soon as someone retires with more than $8100 in KiwiSaver they lose entitlement to accommodation supplement for their rent until they run their KiwiSaver balance down to under this … I have raised this multiple times with Retirement Commissioner, Fincap… may as well buy a new car and get the increased accommodation supplement.”
Julia Bergman, general manager of housing, employment and labour market at the Ministry of Social Development said KiwiSaver would not be considered a cash asset until someone was 65 and it was no longer “locked in”.
“We record whether applicants are declined because they’re over the cash asset limit, but we don’t regularly collect or publish data about whether this was caused specifically by a KiwiSaver balance.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
