No means test, but wealthy elderly can opt out of winter payments

The winter payment for heating costs will not be means-tested. Photo by Lynn Grieveson

The Government has added an opt-out clause to the new Winter Energy Payment that will be available to superannuitants and beneficiaries from July next year.

The payment will run for 13 weeks from July 2018, and in future years will start on 1 May and be payable for 22 weeks. Once it is fully implemented, everyone receiving New Zealand Superannuation, Veteran's Pension or a main benefit will receive $450, if single. Couples and single people with dependent children will get $700.

Approximately 1 million people will be eligible for the payment, including around 710,000 on New Zealand Super or Veteran's Pension and 275,000 receiving a main benefit. Social Development Minister Carmel Sepuloni said that over the next four years, $1.81 billion would be spent on the WEP.

The Opposition has criticised the payment as being poorly targeted, asking why it should be paid to people who choose to spend the colder months on the Gold Coast or enjoying a European summer.

As well as adding "an opt-out option for people who do not need the assistance", the Government has announced (as part of the Half Year Economic and Fiscal Update) that eligibility will be conditional on people being "largely resident in New Zealand over the winter months".

"Anyone absent from the country for more than four weeks will not receive the WEP unless they return home during the eligibility period," said Sepuloni in a media statement.

At the HYEFU press conference, Finance Minister Grant Robertson said the Government had not considered adding a means test for the payment as they wanted it to be "as easy to implement as possible".

"Targeting benefits always includes a cost within that, and we wanted this payment to be one that was easily obtainable."

Energy and Resources Minister Megan Woods said around 1,600 New Zealanders die each year due to cold housing and "thousands more end up in hospital". Pacific Peoples Minister Aupito William Sio said damp and cold housing was a contributing factor to higher rates of hospitalisation for infectious diseases, and 43 percent of Pacific families reported problems with cold housing.