That was then …..how about now? (Part 2)

Retirement

The Ageing New Zealanders report pre-dates the Human Rights Act 1993; age was not included as grounds for unlawful discrimination until 1999. In 1982 there was compulsory retirement at age 60 for a large proportion of the workforce, including the public sector (then accounting for 20% of the workforce). This infringement of individual liberty seems to have been accepted, but there were rumblings against compulsion in the public service.

The Third National Government’s “National Superannuation” (now NZS) was comparatively new. This scheme was universal (not means-tested), available from age 60, and it paid 80% of the average wage for a married couple and 48% for a single person. As such it was generous compared to the current level – 66% of the net average wage for a couple.

The report did, however, suggest that people should make adequate preparation for their retirement years, which continues to be a regular exhortation in Retirement Income Policy Reviews. But the only action suggested were lectures or seminars stressing the importance of sufficient finance, appropriate housing and fulfilling interests.  Exhortations to save came later, spearheaded by the Retirement Commission.

Adequacy of income

Although the incomes of older people can be calculated in different ways, it seems that, over the years NZS has been in operation, roughly 30-40% of older people have relied solely on it.  Poverty among older people is also difficult to measure, especially when trying to make comparisons over time. Again, it appears that the proportion of older people living in poverty has continued to be between 15 and 20%. The 1982 report suggested that “about one in five elderly people were experiencing some financial difficulty and only about two percent were facing serious hardship” (1973/74 survey data).

Older people identified as experiencing financial difficulty usually had little or no income additional to superannuation and few financial assets. They were likely to be in rental accommodation or still making mortgage repayments and to be in poor health. These attributes still apply today and are noted in recent policy reports.

It is clear that the universal nature of NZS and lack of a work test, applauded in 1982, still provide flexibility in income choices in retirement.

Aged care

In earlier decades families were assumed to have the major role in caring for dependent older people in New Zealand. “The major responsibility for this care usually falls on one or two family members, the daughter/daughter-in-law or the son/son-in-law.” This was expected to follow stereotypical lines with the daughter/daughter-in-law being the main supporter in terms of personal care and the son/son-in-law helping in the upkeep of the house and grounds.

However, the report noted that this was changing – “The family is no longer seen as having responsibility for supporting the elderly financially or in providing accommodation; instead, state and community bodies are turned to in these instances”. In 1974 the government introduced the Domestic Purposes Benefit, payable to those who cared on a full-time basis for an elderly person who would otherwise require institutional care. The DPB became associated mainly with sole parents and was controversial. In 2013 it was replaced either by Supported Living or Job Seekers allowances. It is difficult to tell from published sources exactly how many such benefits are being used to support older people. Starting in 2020, after considerable pressure, family members, including spouses, will be paid for caring. It remains to be seen how this will work out for dependent older people.

Housing

In 1982 the vast majority of people aged 65 and over owned their homes mortgage-free; only about 15 % rented accommodation, mainly from private owners. Since then there has been a fall in home ownership overall which has affected the older age groups and it is predicted that this will continue. A rise in renting for older people, predicted to be just over 20% by 2050, raises a range of concerns, as pointed out recently in the 2019 Retirement income Policy Review (see recent blog post).

Residential Care

Another big change since 1982 relates to residential care. The report states that about one in every three older people in such care were not disabled and a further third were only slightly disabled. This suggests, the authors continue, a serious “misplacement problem” in residential homes. Bereavement or family pressure were often important factors in the decision to enter a home, so that the “fit” entrants into residential care “had less family support, a lower level of social interaction, less optimism and had more mental apathy” than “fit” older people living in the community. In the mid-1970s New Zealand had one of the highest rates of rest-home residency in the Western world[1].

Gradually ideas about older people remaining connected with family and community have gained wider acceptance. From the 1980s older people were encouraged to continue living in their own homes, with support services such as Meals on Wheels and household help provided by District Health Boards. Private providers of home-care services also emerged.

Some who can afford it now live in retirement villages in small units or flats, with a range of optional support services. This allows many older people to be independent for longer. But, despite the policy of ‘ageing in place’, those who become unable to care for themselves are likely to move to a rest home eventually.

Since 1982, while the residential care population has increased, in line with population ageing, and it has become much older and much more highly dependent. Very few would now be accepted for “social” reasons. Recent figures show that less than 5% of the age groups under 70 are in residential care. The proportion in the 75-84 are groups is falling but a higher proportion are aged 85 plus. Overall the residential care population is itself ageing.

In 2010 the provision of rest homes became a deregulated industry. While some rest homes are still run by churches and charitable trusts, around 75% of New Zealand’s rest homes are owned by overseas companies, run on a commercial basis, under contracts with the DHBs.

[1] https://www.eldernet.co.nz/gazette/a-history-of-residential-care-in-new-zealand/