Number Crunching – News about inflation and tax on power bill rebates

Over the last few weeks there has been some pretty important information released that concerns the elderly community.

Statistics New Zealand has found that the elderly and beneficiaries have been hardest hit by inflation. Superannuitants’ costs increased 19 percent over the past eight years. That’s double the rate of inflation experienced by the highest spenders and compared with an average 13 percent increase for all households. This all comes down to the cost of living. This has risen faster over the past eight years for superannuitants than for any of the other groups the statisticians consider.

Insurance, local council rates and energy bills have all increased rapidly in price. These are the areas that Statistics New Zealand has found retired people spend more on than other groups. With that being said, superannuation payments have risen 27 percent over the same period so that offsets some of the negative impacts of the inflation.

Tax calculator

However, while we are on this topic, we received this interesting press release from Grey Power New Zealand last Monday.

“Tax on power bill rebates

National president of the Grey Power Federation Tom O’Connor is astonished that IRD has secret plans to tax monthly rebates paid by lines companies, through retail power companies, to consumers.
“We are aware that some power company rebates which are paid annually, are treated as dividends on shares and taxed accordingly. In our view, this is highly questionable but rebates paid, or discounted, from monthly power bills, are clearly not a dividend on shares.”
O’Connor said rebates, discounts, special prices and sales were all promotional inducements to encourage customer loyalty and were used by many retailers from motor fuel companies and power companies to super markets and hardware stores. He said many people on low incomes, particularly the elderly, can only balance their very tight household budgets by taking advantage of these inducements and it would be unconscionable for any government to tax them.
“As a demographic group the elderly are already faced with an inflation rate of about 19 percent. This latest move by IRD makes the Grinch who stole Christmas look like the Tooth Fairy. Some elderly people are having a hard enough time now making ends meet but this latest proposal is a tax grab too far.”
O’Connor said he had raised the federation’s concerns with Seniors Minister Maggie Barry and asked for her assistance in getting IRD to abandon the proposal.”

Clearly this issue is far from being resolved so we will aim to keep you updated as much as we can over the coming weeks as more information comes to light.

 

For more information about Grey Power and Tom O’Connor head to Grey Power New Zealand’s website. Alternatively, you can contact Tom O’Connor at (03) 612 6755.

About Eve Williams

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Eve Williams is the Content Developer and Social Media Administration for Eldernet. She is currently studying towards her Masters at the University of Canterbury. She has a passion for learning new things.