In New Zealand as in most modern economies the bulk of the cash income required to support the living standards of older people in retirement comes from a combination of public and occupational pensions and private investment income. In the New Zealand case the main public pension is New Zealand Superannuation, which often tends to be the main focus of discussions on provision for retirement.
The actual living standards and overall wellbeing of older people also depend on a number of other policies and programmes as well as the activities of families, friends and communities. This paper identifies a number of the key programmes and policies other than retirement income which contribute significantly to wellbeing in older age.
There are also a range of other personal and family factors which affect the living standards of individual older New Zealanders, including knowledge of and ability to access the range of available publicly funded programmes.
Living standards of older New Zealanders
In combination the mix of income provision and other policies have generally served older New Zealanders well. The Ministry of Social Development material living standards surveys have consistently shown that New Zealanders aged 65 plus are the age group with the least likelihood of being in material hardship. The 2008 Economic Living Standards Survey found material hardship was experienced by:
- 4 per cent of the population aged 65 plus
- 13 per cent for the general population
- 19 per cent for those aged 0 -17.
The low levels of hardship are a rather striking feature of the older age group, as around 40 per cent of older people have little or no other income than NZ Superannuation. By international standards this is a relatively modest income in relation to average community cash incomes.
On current policy settings for NZ Superannuation the payment rate for a single person living alone is equal to 42.9 per cent of the net ordinary time average wage. For single superannuitants sharing accommodation the ratio is 39.6 per cent, and for a married or partnered person 33 per cent. However, the real situation of the current age cohorts of those aged 65 plus is boosted by high levels of home ownership, and widely accessible supplementary payments and services. 5
More generally the survey showed that material wellbeing in retirement was correlated with:
- Having a mortgage free home
- Having some other income on top of NZ Superannuation
- Having some cash reserves to deal with unexpected costs.
Conversely, people who lacked most or all of all these factors were more likely to experience material hardship. The hardship group also seemed to be predominantly those who had experienced a series of adverse life events (prolonged unemployment, major long term illnesses, marriage break downs, solo parenthood, bankruptcies and other problems).
The contribution of other policies and programmes
Implicit in the good or adequate levels of material wellbeing of most older people (but not measured as such in the Survey) were the impact of a number of other factors including public sector programmes which also undergirded the economic wellbeing of many older people, particularly those with limited income. There are also some programmes run by the not-for-profit sector which do similar things.
In describing these programmes this report also identifies a number of trends which pose risks for the ability of part of the future older population to achieve adequate living standards in retirement. The implications of these trends together with some options for addressing them are also summarised.
The sections which follow in Part B summarise the main policies and programmes which contribute to the living standards and wellbeing of older New Zealanders.
Most of these programme categories relate to the equivalent sections of the Positive Ageing Strategy. However, the Positive Ageing Strategy also includes some goals which lie outside the scope of this paper. This paper covers:
- Consumption spending concessions
- Health
- Housing
- Transport and mobility
- Personal security
- Communication and social connection
- Employment opportunities.