Shortchanging Ruth: “I Married the Wrong Man”

With the exception of a few years living in the United States, Ruth has spent most of her life in New Zealand.  On turning 65, after several decades of working and paying taxes in New Zealand, Ruth applied for New Zealand Superannuation (NZ Super) only to be informed that she was ineligible to receive the state pension. 

Ruth was denied her right to NZ Super on the grounds that she was married to an American with a retirement income from the US.  As Ruth points out, “In the eyes of New Zealand law, I married the wrong man.”

The Office of the Retirement Commissioner defines NZ Super as a Universal Pension paid to everyone aged 65 and over after fulfilling a minimum 10 years New Zealand residency (including 5 years over the age of 50).  Apart from a slight difference between the amount paid to married couples and singles, the Universal Pension is classified as a standard amount paid to everyone regardless of personal assets and not subject to means testing. 

In addition to NZ Super, New Zealanders can also participate in any number of savings programs including supplemental superannuation schemes, personal annuities, and other investment returns.  Residents can be millionaires but still receive full NZ Super on reaching 65.

On reaching the age of 65 however, roughly one in every four New Zealanders – including Ruth – discovers that his/her right to the “Universal Pension” doesn’t exist.

NZ Super has remained largely unchanged since it was introduced in 1938.  Reflecting New Zealand’s then extreme isolation, it was an admirable program for its time, but in a vastly changed world it has become obsolete.  A succession of alterations and amendments over the years has not sat well with the original structure. 

Successive governments have avoided overhauling and updating the system in the belief that providing a more equitable system could lead to major cost increases.  Instead, outdated legislation unfairly penalizing many people has been retained.  The government has been able to maintain the outward impression that the nation is being provided with a benevolent state retirement program.  This policy has kept the majority quiet.  The press has said very little.

Last modified: February 21, 2007