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New Zealand Superannuation as a basic income

Author

Listed:
  • Susan St John

Abstract

This PIE working paper updates New Zealand Superannuation as a Basic Income, PensionBriefing 2021-2, Retirement Policy and Research Centre. It models how changing New Zealand Superannuation into a genuine basic income would allow a simple but effective clawback mechanism to operate through the tax system, generating useful revenue to help meet future government expenditure pressures in aged care, pensions, education, poverty reduction and climate change. This update is based on the Half Year Economic and Fiscal Update (HYEFU) 2024 forecasted rates of New Zealand Superannuation (NZS) as at 1 April 2025, incorporating the effect of income tax changes announced in the 2024 Budget. Treasury’s tax and benefit model TAWA (see Appendix 1) is used to estimate the savings on an annualised basis for various special tax schedules for superannuitants and NZS rate scenarios for the year 1 April 2025 to 31 March 2026 (2025/26 tax year). The modelling illustrates that significant savings may be achieved from a suitably progressive separate tax schedule for those who opt onto the basic income, called here the New Zealand Superannuation Grant (NZSG). Alignment of the various rates of NZS may generate additional saving.

Suggested Citation

  • Susan St John, 2025. "New Zealand Superannuation as a basic income," Working Papers 023, University of Auckland, Economic Policy Center (EPC).
    • Handle: RePEc:cyc:wpaper:023
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    Keywords

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    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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