Posted August 14, 2014 by Geoff in Humanity, Society, Politics
It is National Party (NZ) policy to encourage retirees to be more productive after retirement thus reducing the costs of senior health care. The Universal Superannuation Scheme applicable to all New Zealanders is set at 65% of the net average wage.

But, and it’s a BIG but, the NZ tax codes provide a disincentive for retiree’s seeking employment after retirement.

Example: I have qualified for Kiwi Super (Pension) and I work full time due to ongoing financial commitments beyond my pension's ability to pay.

My Kiwi Super payments are taxed at a flat rate of 30% when my full time work income exceeds $40,000 NZD. This occurs even though my full time work income is taxed at a progressive rate of 19.1% (17.5%-30%) from $48,000 NZD-$70,000 NZD.

Where is my incentive to work and remain a productive unit of labour?

I await the Inland Revenue Minster’s erudite reply to my emailed queries with bated breath.
paul wrote at August 23, 2014
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Managing the government and consequently taxes encompasses many avenues of specialized agendas I think. Each with their own purpose. I know in the US when one retires you can make up to $18K while collecting your soc.sec. retirement benefits and stay within the same tax rate. If you exceed this amount then the equivalent of another dollar for each dollar penalty will be calculated on your tax responsibility. I imagine that the reason is to create opportunity for others to have job opportunity because qualification-wise an employer would more than likely hire the experienced before hiring less experienced workers. I am sure it is somewhat more complicated and agenda-riddled than my simple explanation. Bob Songer's comment is full of merit and illustrates how greedy agendas high-jacked the system and basically threw it off track from it's original sustainability plan. Our representatives are not our friends, nor our family as they falsely try to demonstrate thru manipulative ads. They are all dollar and cents agenda driven people - some with sensible agendas and some with warped agends and worse yet some with personally entwined agendas. When they influence the governmental services consequences will be felt. Whether they are good for us individually depends upon our own standing. Luckily many of us are resilent, self sufficient survivers. Unluckily these same qualities allow us to ignore the buffoonery and not hold every misstep to be accounted for.
Geoff wrote at August 23, 2014
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We humans have created the system that tortures the poor and reward the rich. It is we humans that must re-design our core values and evolve a system where there is far less suffering for all on this planet.

It is not for us to rely on government, business religion or other leaders but rather to change our core values and live by them as individual.

For it is the individual that is the whole.

When enough people realize that the "Observer is the Observed we will be on the correct path.

Thanks for sharing your valued comments paul
Bob Songer wrote at August 22, 2014
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Here in the states, Geoff, I can remember when Social Security payments had created a huge reservoir of funds for retirees. Sometime in the 60's (although I don't remember the details), the gov't decided that it needed those funds and began to strip SS of its wealth.

Today, when many are calling for the end of SS, that fund has been labeled as "an entitlement!" Screw the fact that millions worked hard for that money over the years. But now, many of the younger folk are balking at having to pay for our retirement.

One nice thing, however: I am collecting my late wife's SS until I turn 67, or thereabouts, and choose to collect on my own SS.

Can I live off the amount I receive? No. I still work, but I don't have to work as much.
Last Update on August 22, 2014 by Bob Songer
Bob Songer
Geoff wrote at August 22, 2014
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Thanks Bob. It all points to a system redesign!
C-JEAN wrote at August 16, 2014
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Hi governments fans.?

I have a very STRONG feeling that those in governments
have rised to their level of incompetence ! ! !

You know? the "Peter principle" ?!
(Laurence J. Peter).

Blue skies.
Geoff wrote at August 23, 2014
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Love it. Thanks for sharing C-Jean Kiss
Dean Davis wrote at August 15, 2014
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Geoff, a similar thing happens here in the United States. People who qualify for welfare payments also qualify for many other benefits. BUT if that person goes out and gets any job that pays less than around $12,000 per year, they lose almost all their benefits, so that they actually have less income to live on.

There should be some way to make a system that would equalize the differences, like maybe a graduated scale of welfare payments whereby taking a low paying job would only decrease the benefits slightly so that the low paying job plus the slightly lower payments would actually result in MORE to live on.
Dean Davis
James Milton wrote at August 15, 2014
0 Votes
Hi Geoff, I imagine that you paid into the Kiwi Super all your life from your salary, so its something you earned, not a freebee. Most countries that have social services seem to do this, in fact, even if a person does not work but has a private pension, they claw back part of the state pension through the tax system. You have a valid point I agree, that it works as a dis-incentive. I believe though that the balance between people in work/retired or unemployed has reached a critical level due to the fact that no government invested the money that was contributed through salaries. They assumed that there would always be enough cash provided by the existing workforce to cover it. Mechanization, and the recession both took their toll, and you may recall that people in a number of European countries were furious that pensions have been cut and the qualifying age raised. This is the current financial reality, and is doubtless the reason for the apparent contradiction in policy where NZ is concerned. By all means keep us updated.
James Milton