Sunday, May 10, 2015

Qualifying for Super when you don't qualify

Most people think you have to be 65 to qualify for NZ Super. But there is a group of individuals who receive Super as 'non-qualified' recipients. A minority are over 65 and don't meet necessary residency qualifications but almost 12,000 are under sixty-five; 3,689 are under 60.

Generally the male turns 65 and can reject the single rate ($345.72 net weekly) for two married rates (2 x $273.82 net weekly or $547.64 combined). The decision to include or exclude  lies with the Superannuitant. The effect is the government has to pay 58% more.

An OIA supplied the numbers at December 2014:

88 percent of non-qualifying spouses are female.

Here's the ethnicity breakdown:

It appears only partners in marriage or civil unions can receive the 'non-qualified' payment. That's borne out by the ethnicity breakdown. Maori have a  low marriage rate.

At the same date there were 650,636 Superannuitants aged 65 and over.  So just under 2 percent have a non-qualified spouse.

Annual payments to non-qualified spouses amount to $133 million.

Now that mightn't be a big deal against the total Super bill, but significant anomalies are occurring.

1/ For the purposes of an unemployment or sickness benefit, the law similarly recognises marriages and civil unions. However it also recognises de facto relationships. How long before under 65 year-old de facto partners of Superannuitants start pushing for Super payments?

 2/ In the case of unemployment or disability, the rate for two partners is exactly half of the single rate. For non-qualifying partners of Superannuitants the payment is 79 percent of the single rate. How long before partners of unemployed or disabled beneficiaries under 65 start challenging on the basis of discrimination?

Beneficiary advocates are notoriously active so it surprises me that this hasn't already become an issue.

Perhaps most people aren't aware that under 65s can collect Super via their 65 or older husband (or more unusually, wife)?

Would appreciate hearing from readers whether they were aware of this. A simple 'yes' or 'no' would be fine.


Mark Hubbard said...

Yes, aware of this.

OlderChas said...

As an OAP (also with a GSF pension) with a younger wife (who works part-time), when enquiring at registration for NS I was told that yes we could draw the married rate, but that some would be "clawed back" because of wife's earnings and GSF. I was better off on the single rate.

JC said...

Yes. But just as part of a general appraisal of the implications of turning 65.

I think we looked at the WINZ and IRD sites plus some material was sent us around the time of my birthday.


alwyn said...

If you are married you cannot get the "single" rate you quote. To get that you must be single and living alone. There is a lower rate if you are single and sharing accommodation. If you tried to claim it while married, in a civil union or in a de facto relationship you would be committing fraud. In these cases, regardless of whether you partner is getting super you are only entitled to the married person rate.
The ability to claim the super for a partner under 65 is also means tested.
The amount you get in various circumstances is listed here.

david said...

I remember when my partner qualified (before me) they wanted all my details, supposedly to confirm whether we qualified for more (we knew we didn't and I objected to being required to provide details when we were only applying for the single rate). I don't remember married/de-facto being raised as an issue. This is one of the many 'benefits' where you are penalised for being in a relationship (or being truthful about it). I do wonder sometimes whether the savings to government exceed the cost of enforcement, particularly if the unintended consequences are taken into account.

Lindsay Mitchell said...

Alwyn, I quoted the 'single, sharing accommodation' rate ($345.72 weekly) in my post - from the same table you link to.

alwyn said...

Sorry, so you did. However my other comment about only being able to get the married rate still applies if you are in a relationship, even if your partner isn't getting any super if you exceed the means tested limit.

Jigsaw said...

No I wasn't aware of this-seems incredible.

Lindsay Mitchell said...

You are correct Alwyn.

The letter I received in response to my OIA request said,

"It [New Zealand Superannuation] is paid at a flat rate and is not adjusted for income, assets or employment status *unless* a non-qualifying spouse is included in the NZS or supplementary assistance is being paid."

(My **)

S. Beast said...

Yes (but I have trained in this area in the past).

Don W said...

Yes My in laws who are no longer with us were receiving the married rate . The age for super was still at 60 and he went on to it then. She was quite a bit younger than him and when he was about 63 and she was in early 50s they went on to the married super. This , I think was in the early 1990s . But they were means tested on any income they may have earned over a certain level.