Established under the New Zealand Superannuation and Retirement Income Act 2001, the New Zealand superannuation system seeks to create a safety net of minimum income the average Kiwi can expect. While New Zealand Superannuation is a universal payment for New Zealand citizens and residents 65 years of age or older, as an employer there are some obligations which can vary depending on any voluntary contributions made by your employees.
In this guide, we discuss superannuation in New Zealand, eligibility criteria and employer responsibilities. Please note that the below information is general in nature and not to be considered as advice. For any superannuation advice or information, consult a professional.
Eligibility
You may qualify for NZ Superannuation if you:
- Are 65 or older
Either:
- A New Zealand citizen.
- A New Zealand permanent resident.
- Hold an NZ residence class visa.
Ordinarily resident in New Zealand, the Cook Islands, Niue or Tokelau when you apply, and * Have lived in New Zealand for a certain period of time.
Ordinarily resident generally means a person who is normally and lawfully in New Zealand, intends to stay here and considers New Zealand to be their home.
If you are ordinarily resident in a country NZ has a Social Security Agreement (SSA) with when you apply for NZ Super, you may still qualify. There may be additional criteria you need to meet, depending on your situation.
You must have lived in New Zealand for a certain number of years from age 20. This must include 5 years from age 50. The total number of years you need is based on your date of birth. These years (including the 5 years from age 50) do not need to be consecutive. When they save ‘must have lived in’ it means that you were ‘resident’ and ‘physically present’ in NZ at the same time.
You are a refugee or protected person. If you recognise as a refugee or protected person, the number of years may be worked out differently. It depends on the age you started living in NZ.
Exceptions
If you haven’t lived in NZ the whole time, you may be able to use other country to meet this criterion if:
- It is a country that has a Social Security Agreement (SSA) with NZ, or
- It is a NZ realm country (the Cook Islands, Niue, or Tokelau)
Applying for NZ super
You can apply online through MyMSD for New Zealand Superannuation, unless you live overseas. You can apply for NZ Super if either your 65th birthday is in the next 12 weeks, or you are already 65. If you’re 64 and you’re not turning 65 in the next 12 weeks, you need to come back and apply when your birthday is in the next 12 weeks.
You can work while on NZ Super. It doesn’t depend on your income or any assets.
Superannuation payment
If you apply before you turn 65 or on the day you turn 65, you will be paid from your 65th birthday. If you apply after you turn 65, you will be paid on the date you apply.
If you get NZ Super and go overseas, you may still be able to be paid. It may depend on if you’re going for a holiday or going to live overseas.
Superannuation rate
The rate of superannuation anyone is entitled to depends on several factors. These factors include marital status, living status and whether an employee lives with other people including the status of these other people.
New Zealand Superannuation (NZ Super) is paid fortnightly on a Tuesday. How much you get depends on their situation and what tax code they use. If you get an overseas pension, this could affect your NZ Superannuation. If you or your partner get other income as well as NZ Super, it may change the tax code you use. This means you could get less for your NZ Super payments, depending on the tax code you’re on.
Employers are required to contribute 3% of an employee’s salary to their KiwiSaver account. As part of the onboarding process, employers are required to provide the KiwiSaver Information Pack to new employees who qualify for automatic enrolment, and to existing employees who ask for one. Whilst KiwiSaver accounts are voluntary for employees, if an employee has one you are required to contribute 3% of the employee’s salary to their account on top of their pay.
Your obligations on super
There are obligations you need to meet while on NZ Super. If you don’t meet your obligations, the payment could reduce or stop. You must inform the Ministry of Social Development about any changes that might affect your entitlements or how much you get paid.
You must notify the authorities about any changes to your:
- Relationship
- Address
- Tax Code
Superannuation New Zealand vs Superannuation Australia
New Zealand and Australia both have retirement schemes called superannuation, but there are differences between the two. In New Zealand, superannuation or super refers to the retirement scheme provided by the government. Its Australian equivalent is the Age Pension.
Superannuation in Australia is where employers and employees make contributions to a retirement savings account during their working life. Its Kiwi equivalent is the KiwiSaver.
In both countries, you can choose which KiwiSaver or Super fund you would like the contributions to go to.
Understand employer obligations with Peninsula
Peninsula has worked with thousands of businesses in New Zealand, guiding them in matters of hiring, onboarding, performance management, and termination. We are there with you at every step of your business journey. For expert advice on your obligations to employees call Peninsula today.