With the rising cost of living, increasing numbers of New Zealanders over 65 are continuing to work — not by choice, but by necessity.

While many people assume New Zealand Superannuation provides sufficient income in retirement, the reality is very different for those who rent or still carry mortgage costs.

For a single person living alone, the gross Super payment is commonly understood to be $1,213.34 per fortnight. After tax, this reduces to approximately $1,076.84. Where a secondary tax code (ST) applies due to additional income, payments can reduce further — in some cases to around $840 per fortnight, or $420 per week.

For couples, the structure is different. A couple where both partners qualify for Super receive a combined payment that works out to less per person than a single person living alone. While their shared household expenses may reduce some costs, the per-person entitlement is lower than that of a single Super recipient.

For retirees paying market rent — often $380 to $450 per week — Super alone does not cover housing costs.

As a result, many older people work part-time. However, income from part-time work is taxed under PAYE, often at several hundred dollars per fortnight. When combined with tax on Super, some working retirees can see total tax deductions approaching $1,000 per fortnight.

While tax calculations may be technically correct under current legislation, the broader question is whether the system is structured fairly for people who have paid tax for 40–50 years and are simply trying to remain financially independent.

Many retirees face additional pressures beyond food and power bills — including rent or mortgage payments, insurance, car repairs and WOF costs, medical expenses, and supporting children and grandchildren. The Accommodation Supplement exists, but eligibility thresholds (including savings limits of around $8,000) can discourage maintaining even a modest emergency buffer.

The Winter Energy Payment provides some assistance, but rising electricity and heating costs often exceed the additional support provided.

The issue is not one of miscalculation — it is one of policy design. Should Superannuation continue to be taxed at current rates for those who must work to survive? Should abatement thresholds be reviewed? And are policymakers fully aware of the cumulative tax burden faced by working retirees?

With an election year underway, this is a timely opportunity for discussion about how New Zealand supports — or fails to support — older citizens who are still contributing to the workforce.

The conversation is not about special treatment. It is about fairness, sustainability, and dignity in later life.

This article was sent in by an older member of the Upper Hutt community. Name has been kept anonymous for privacy concerns.

21/02/26