Put your hand out for your free $700 - if you’re receiving Government Super.

winter-heating-bill.jpg

Here's a recent op-ed piece about a new energy payment initiative available to New Zealanders

who are 65 and over, written by financial columnist, Janine Starks. 

UPDATE: 19/12/17 - Since Janine's article was published, the Government have changed their stance on this payment. Those who are eligible now receive it automatically and if you don't wish to receive this payment, you can choose to opt out. Read more here

Turn on your hearing aids, refocus the glasses and make way for the loud hailer.

A great big pensioners' perk is coming your way next year.

Miss this opportunity and you'll miss thousands of free dollars.

You've got five months to stoke the bank account in anticipation and spread the word.

What's the fuss? Winter energy payment

The payment is designed to help with winter heating costs.

Lots of loot: $700 a year paid to couples aged 65 and over. For singles, the payment is $450 a year.

Means-tested? No, it's a free for all pensioners and those under 65 who are on a "main benefit".

Can you apply? Yes, through Work and Income. Fail to apply and your bank account won't feel the warmth.

When? Next winter, five monthly payments of $140 added to your super from May to September.

Firewood or electricity? No you duffer, it's just a label for free money.

You're most welcome to indulge in bottles of gin. No one's monitoring whether you're toastie or toasted.

National campaigned on a $680 automatic increase to super. Labour trumped it by $20, but labelled it a "winter energy payment" that you have to apply for.

700 doses of guilt

The British have a similar "winter fuel payment" with a 20-year history.

Successive governments can't re-label or take away something with such a sturdy social backbone. But it's contentious. It's not means-tested yet but it's slapped with a label that oozes shivering grannies.

A feeling of guilt is written all over it. When money reeks of emotion it makes retirees feel they need to be struggling to warrant the payment.

In the UK, Baroness Joan Bakewell a Labour Party Peer said the wealthy should donate their payments to charity. She tried to send hers back, but the government department refused. In New Zealand it's guesstimated 80 percent of people will apply and the wealthy can abstain if they wish.

But what defines wealthy? This is money everyone on super is entitled to and the social engineering should be ignored.

The label soon takes on a life of its own and the fun police run riot. It would pay for those in Nelson, Blenheim and Whakatane to stop showing off about their sunshine hours.

A few years ago the British stopped the fuel payment to expats living in warm climates such as Portugal, Spain and Cyprus. Live in Switzerland and you still get it. Overnight, 100,000 pensioners lost the payment.

As the masters of complication, the British have a secondary cold weather payment triggered regionally by any seven-day period where the average temperature is 0C or below. They pop another £25 ($48) in pensioners' bank accounts. Additional payments topped £435 million in 2010 and shrivelled to £27,500 in the warmer winter of 2013.

It's an argument those in Christchurch, Dunedin and Invercargill should campaign on given their Auckland counterparts have rarely seen frost or chopped kindling in their life.

My advice? Get your application in as soon as Work and Income have the system up and running. Tell as many "elderly" people as you can. There's five months to get the word out and it's great sport to remind the over-65s how they can spend this free guilt-laden money.

At a café last week I counted 10 friends eligible for a $700 payment.

They had at least $40,000 of road bikes parked beside them and don't spend much time sitting next to the heater. They can now have 175 coffees on the Government to warm the winter cockles, or 233 packets of toffee pops if they'd rather sit at home adding to the winter padding.

But the smart money will invest. At 65 you can't delay a new bike purchase, so S-Works and Stump-jumpers will be fuelling warmth on the roads and mountains next winter. Offset the cost by putting your $700 a year in a nice sharemarket growth fund. In ten years, with returns of 8 per cent annually there could be $11,000 waiting. In 20 years, $34,000.

If your household has a bike-ban in place, there are plenty of other options. Some couples may prefer a nice warm island cruise at age 85 with the proceeds. The spend-it types can use grab-a-seat fares (as low as $39) to visit grandchildren and warm up on their kids' winter power bill.

A trip to Brisbane in August 2018 with a bag, drink, dinner and insurance comes in at $627 each on Air New Zealand. Don't forget to turn the spa pool off before leaving and save even more on energy.

Putting aside the tongue-in-cheek suggestions, the message is clear. This is a use-it or lose-it handout, and your hand better be out. They're not paying it automatically.

Janine Starks is a financial commentator with expertise in banking, personal finance and funds management. Opinions in this column represent her personal views.  They are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product.  Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances