It won’t reduce the cost of Super
Treasury estimate flexible superannuation risks adding to the cost of superannuation.
It will lead to greater poverty
People on low incomes are most likely to need, or be forced, to stop working early, they’re also the least likely to have a lot of savings. The most marginalised are also the most likely to die early.
A single person electing to take their superannuation at 60 instead of 69 will get $244.24 in the hand less per week. This would be almost $80 pw less than what they get now. This is not fair and will create real poverty.
New Zealand currently enjoys some of the lowest rates of poverty amongst the elderly. Let’s not risk that with well-intentioned but poorly thought out policy changes
If people can’t work before they turn 65, provide a mean-tested benefit to help them transition to superannuation.
It will lead to greater inequality
It will increase poverty for those most likely to take the early option and increase wealth for those able to work longer.
It misses the point of superannuation.
Dunne’s proposal promotes the belief that superannuation is a set amount of money available to each individual. It’s not. It’s a benefit that ensures continued participation in society by the elderly.