New Finance Minister, Nicola Willis, was recently in the spotlight following a government decision to adjust the means-and-income testing for children and young people’s support. The move sparked inquiries from various commentators who questioned the rationale behind the decision. Budget 2025 unveiled the income-testing eligibility for the Best Start payment during a child’s first year, affecting around 60,000 families. Teenagers receiving JobSeeker benefits will also undergo a “parental assistance test” to assess their need for financial support from parents. Additionally, the member tax credit in KiwiSaver will be halved for individuals earning over $180,000, while still allowing full NZ Super payment eligibility.
Critics like Rupert Carlyon from Koura KiwiSaver expressed concerns about the budget’s impact on young people, highlighting the reduction in KiwiSaver contributions, means-testing of Best Start payments, and lack of welfare for those under 20. He also noted the disparity in treatment between different age groups, emphasizing the untouched status of NZ Super despite its costs. While acknowledging the political challenges of means-testing NZ Super, Carlyon urged young people to advocate for change through voting to secure better policies in their favor. Similarly, Shamubeel Eaqub, chief economist at Simplicity, criticized the inconsistency of means-testing KiwiSaver incentives while leaving NZ Super untouched, a program costing billions annually.
When asked about means-testing superannuation, Finance Minister Nicola Willis reiterated the government’s commitment to universal New Zealand superannuation, dismissing the idea of implementing means-testing. She mentioned National’s previous campaign to raise the age of eligibility for NZ Super as a means to enhance affordability and sustainability. Despite these discussions, there has been no formal caucus debate within the party regarding changes to superannuation policies. Willis also addressed the politicization of the issue during the last election campaign, where Labour used National’s proposed changes against them. The ongoing debate surrounding means-testing and eligibility criteria for welfare support continues to be a topic of contention among policymakers and economists, with differing opinions on the best approach to ensure financial sustainability and fairness in the welfare system.