Superannuitants better off from 1 October tax cuts

Superannuitants will get a double boost from the 1 October tax cuts.

They will receive a 2.02 per cent rise in NZ Super – to compensate for the increase in GST – and cuts in personal tax. Personal tax cuts will apply to NZ Super payments, and to any other income such as interest, dividends, or part-time work.

From 1 October, we are reducing resident withholding tax rates on interest to align with the lower personal tax rates. And the tax rates for portfolio investment entities (PIEs) and managed funds will also drop in coming months. This will increase after-tax earnings on savings.

After these changes, a married couple who receives NZ Super, own their own home, and do not have any other income, will be about $11 a week better off. A single superannuitant who owns their home and has $200,000 of investments generating $10,000 income a year will be about $12 a week better off.

For more information: http://beehive.govt.nz/feature/1+october+tax+cuts