This article was published on 1 September 2012. Some information may be out of date.


  • The extra money retired people can get from the government, above NZ Super
  • 2 Q&As about information on spending in retirement
  • People don’t literally invest student loans — so how do they do it?
  • Reader finds this column not worth reading!
  • People who make the most of student loans are “not morally bankrupt”

QIn your column last week, you quoted Dr Claire Matthews as saying, “If a person is receiving $350 per week in the hand and paying $250 per week in rent, it only leaves $100 for food, power and everything else. So some people simply have to manage on the sort of amounts in the No Frills guidelines.”

Dr Matthews did not include the accommodation supplement in her calculations. I suspect this theoretical person would get about $150 a week supplement and be entitled to a Community Services Card, which would reduce the cost of GP visits etc.

I am surprised she and you are not better informed.

AClaire Matthews responds: “The example given was just that, an example to demonstrate how the situation could arise — it was not designed to be a definitive response.

“The point the example was supposed to make was simply that a person’s circumstances may be such that they are only left with $100 per week (or thereabouts) to live on, and if that’s the case they have to manage on that.”

For my part, I did say, “the health system must look after the medical needs” of those who report paying nothing for health care. That more or less covers the Community Services Card issue. But you’re right, I should have brought up the accommodation supplement, so I will now.

The Ministry of Social Development confirms that “Someone on a NZ Superannuation can get an accommodation supplement to help with the costs of renting, boarding or owning their own home, if their income and cash assets are less than a certain amount.

“The rate of the supplement depends on where they live, their family situation (single/married/children) and the amount of their accommodation costs.” For more on this, see

Assuming the person in the Q&A is single, lives alone, has no income other than New Zealand Super, has no cash assets, and is paying $250 a week in rent, they could receive a maximum accommodation supplement of $115, depending on where they live. In central Auckland, it would be $115, and in Wellington $100. For more on thresholds see

Turning to the Community Services Card, someone getting NZ Super may be able to get a card, even if they are working, depending on their total income.

“In the above example, the person would qualify as their income is less than the yearly limit of $26,393 for a single person living alone. (NZ Super, before tax, for a single person living alone is $20,803.64.)” says the Ministry spokesperson. For information about the card see

While we’re at it, superannuitants may also be eligible for the disability allowance, “which can help towards the extra costs they may have related to a disability or medical condition. It can help pay for a range of things like regular visits to the doctor, medicines, extra heating, lawn mowing or a medical alarm,” says the spokesperson.

There’s an income test, and the maximum allowance is $60.17 a week. For more on this see

The Ministry also publishes a 36-page brochure called Services for Seniors, that covers NZ Super, the Veteran’s Pension, extra financial help, help from other government organizations, and help from community groups. You can download it at

“This has been very popular in guiding people on the range of assistance that is available to older people,” says the spokesperson.

QYour response to the letter entitled “No Frills retirement” shocked me with its sarcastic tone. Surely this person is entitled to his/her view. I look to your column for objective advice and usually find it of great value.

The issue is not whether some unfortunate older folk do live on this breadline. I’m sure your figures are accurate. The issue, in this case, is poverty. I am concerned that publication of a table like this, from Dr Matthews, gives tacit approval to the status quo.

We all need to be frightened into saving. I also support raising the age of entitlement for state-funded superannuation. That might diminish the ageist attitudes that now exist where younger people think you owe it to them to retire from the workplace, or that you are past it at age 65.

Could you please publish an actual table for a single person’s living expenses in retirement, as well as a couple. It needs to include all actual expenses such as rates, insurances, mortgage or rent payments, household maintenance and repair, transport costs including car repair, WOF and registration, electricity gas and water, telephone, medical and pharmaceutical costs, and so on. In other words it needs to be a table of actual rock-bottom spending. Then people need to be aware that everything extra will need to be saved for before they retire.

I find people are completely unrealistic about the actual cost of living in retirement.

AOnce again, Claire Matthews replies. “What I personally take out of the report in terms of the status quo is that it is possible to manage on NZ Superannuation, but it provides a lifestyle with limited choices.

“To the extent that it supports the need for KiwiSaver to help people to save so that they don’t need to rely solely on NZ Superannuation in their retirement, and can add some choices into their retirement lifestyle, it could be argued that it supports the status quo of NZ Superannuation and KiwiSaver.”

On your request for tables, Matthews’ tables “do represent actual expenditure by retirees, and do cover all expenses other than housing-related, and the report includes comment on housing expenses,” says Matthews. You can see a table covering singles and couples on in an August 17 article on by doing a search on “Claire Matthews”.

I think excluding housing expenses is wise, because they vary so much. People can add in their own rent, rates or mortgage costs.

As for my “sarcasm”, it was intended as a light-hearted response to the reader’s comments, such as: “…I am stunned that someone is paying this woman to do this!” I’m sorry if I shocked you, and glad that you usually like the column.

QRegarding the cost of living in retirement, your readers may be interested in some research that we (Toni Ashton and Jessica O’Sullivan) undertook at Auckland University which estimated the minimum income required to live a healthy life in retirement. Unlike Claire Matthews’ work, which estimated how much retirees actually spend, this work estimated the minimum amount that retirees need to spend if they wish to stay healthy.

It included the costs of food, physical activity, housing, social connectedness, health care, transport and hygiene.

We found that for people renting accommodation, a single person would require $452.52 a week and a couple, $602.68. For people who own their own home our estimates were $415.70 for a single person and $587.13 for a couple.

These figures, which are as at November 2009, are averages. Individual expenditures are likely to vary depending on region, age, family support and so on.

But our estimates again highlight the need to save for retirement, as NZ Superannuation will not cover these costs. The study, which is featured in the Listener (September 1–7), was published in Ageing and Society. 32(5): 747–768, 2012.

AThanks for this — which should help the previous reader, as well as many others.

QAs a mature student (now doing postgraduate study) I am curious how it is possible to take out a student loan and then invest that money.

Whenever I have undertaken study the fees have been paid directly by StudyLink to the education institution. I have never been given the option of banking the money. The only exception is course-related costs, which are a maximum of $1000 per year, and receipts/proof has to be provided.

Some of your letters give the impression that students rort the system and invest study fees to the tune of thousands of dollars! Please clarify what part of the student loan scheme is being discussed.

AYou’re quite right. When you take out a loan, StudyLink pays your fees directly to a tertiary institution.

However, let’s say you’ve got the money to pay the fees yourself, but you take out a student loan anyway. You can then invest the money you would have used for the fees.

The actual dollars don’t come from the government. But the effect is the same. You’ve got a loan on which you pay no interest, and an investment that does pay interest. So you’re better off than if you had used your own money to pay the fees.

QMary! You just reinforce why I don’t pay for the Herald! It’s free for three months through the AA membership, but I wonder why I bother to read it!

You are TOTALLY out of line defending the SCAM ARTIST son and his SCAM ARTIST AMORAL parents who see it as a game not to pay back the debt he owes under the student loan scheme!


Retire Mary. You obviously need to.

AOh no, not a letter full of exclamation marks and capitals. They are always a worry.

There’s probably not much point in replying, as presumably you no longer read this column. But just in case:

I have never advocated not repaying a student loan. Of course loans should be repaid. The harder question is whether it’s OK to borrow as much as possible and repay as slowly as possible, to make the most of the lack of interest. Views vary on this. Read on.

QThere is nothing wrong with students who take out an interest-free loan and invest it because they either have the money to pay fees themselves, or worked hard enough to gain a university scholarship.

These students are playing by the rules in a system deemed fair and legal by the government. They are not “morally bankrupt”.

In fact, these current students are merely coming closer to getting the support experienced by your correspondents of an older generation, when they were able to attend university almost without fees. Do those who went through university in the 1960s and 70s feel bad about ripping off the system then?

AThat’s one way to look at it. More letters on this topic next week.


Tomorrow is the start of Money Week, organized by the Commission for Financial Literacy and Retirement Income. Various organizations around the country are running activities, including free budgeting sessions, investing workshops and competitions for schoolchildren. For more, see

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Mary Holm is a freelance journalist, a director of Financial Services Complaints Ltd (FSCL), a seminar presenter and a bestselling author on personal finance. From 2011 to 2019 she was a founding director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to [email protected] or click here. Letters should not exceed 200 words. We won’t publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.