Senior citizens: How does N.Z. pay for them?

Senior citizens and how New Zealand pays for their care is something this country avoids talking about.

The decision to cancel compulsory superannuation by the Robert Muldoon Government is the worst economic policy in 50 years. A report found that had it not been cancelled, a N.Z.$625 billion pool of funding would now exist. New Zealand would be one of the richest nations in the world. The cost of elder care would be significantly different.

New Zealand Superannuation costs $20 billion per annum as of July of this year. In an election dominated by political parties talking about tax, what are the other options for addressing the cost of caring for senior citizens?

How to fix elder care

Two Treasury reports released in July 2026 said that there is no easy solution. The first looked at how New Zealand superannuation is indexed on average wage, and suggested it could change to indexing price increases. The same report also suggested that mixed indexation is possible.

The other report examined the age of eligibility for entry into N.Z. Superannuation. Currently it is set at age 65. However, the report suggested that it could rise to 75 by 2100 and eventually 79. The latter age would happen if consumption taxes were used to fund it.

Economists say that means testing recipients of N.Z. superannuation is the only way to ensure sustainability. They note that New Zealand is unique for allowing most people over 65 to access N.Z. Superannuation without means testing them.

What do the public think?

The N.Z. voting public are somewhat split on how they want their superannuation to look. For example, A 1 News Verian poll in June found 44% support the government keeping the retirement age at 65. 26% supported raising the retirement age. 25% supported removing payments for those with higher income or assets. The remaining 6% did not know or refused to state their opinion.

What the politicians think

With the 2026 election campaign now underway, the parties are now announcing their policies.

New Zealand First leader Winston Peters announced last month, that only New Zealand citizens should be eligible for New Zealand Superannuation. As a nationalist, conservative party, this should not really surprise anyone. As a former New Zealand First member my bigger surprise was that it took this long for Mr Peters to do so.

At present, Labour are avoiding any changes to the current settings. Leader Chris Hipkins wrote off any possibility of a settings review in June.

Although Prime Minister Christopher Luxon the war on superannuation earlier this year, National has been comparatively quiet since. Thus far no real announcement of what will happen next – if anything – has happened.

My own thoughts

First, I support New Zealanders who are permanent residents having limited access to N.Z. Superannuation. It should be a reward for their commitment to the country and a promise of full access if they progress to being full citizens.

I agree with that New Zealand should means test those that are 65% or over, who are earning over $150,000 per annum. 9% of those over 65% earn $100,000 or more. Above $150,000 it drops to 3.6% and to 2.1% for those earning above $180,000.

If there are other fiscal levers that can be used without resorting to tax changes, New Zealand should explore them. New Zealand has superannuation agreements with 11 countries regarding New Zealanders living overseas. Mr Peters suggesting that senior citizens overseas would get cut off, potentially affects those agreements with overseas jurisdictions. It is something I do not think his party thought about.

Whilst I am pleased that National has ended its war on superannuation, the current messaging is not encouraging. The party is reluctant to re-examine it in anything other than a taxpayer light. This means that non-fiscal and fiscal levers that do not involve tax, are ignored.