New Zealand Superannuation is not asset or income-tested. If you qualify for NZ Super, you receive it regardless of how much you earn or own.

What often surprises people, though, is that NZ Super is treated as taxable income. The tax deducted from your payments depends on your total annual income and the marginal tax bracket you fall into. If you earn additional income — from employment, investments, rental property, or other sources — a higher tax rate may apply to your super payments.

This is why two people receiving NZ Super can end up with different amounts in their bank accounts. Someone with little or no other income may have less tax deducted, while someone with additional earnings may see a larger portion withheld each fortnight.

The key point is that the system balances itself out. Tax on NZ Super is deducted using a PAYE tax code, and your overall position is squared up at the end of the tax year. You won’t ultimately pay more tax than you should — any overpayment is refunded, and any shortfall is identified.

So while NZ Super isn’t means tested, the tax you pay on it will reflect your wider income picture — which explains why your “in-hand” amount may differ from someone else’s.

If you are unsure if you are using the correct tax rate for your Super payments, please get in touch (add “contact us today” button)

This article is general in nature and should not be relied on as specific advice.