Superannuation

NOTE: Tauranga & WBOP Grey Power have lobbied against this issue on many occasions. It is great that MP Denis O’Rourke ,NZ First had got a Bill underway for changes to the Superannuation entitlement and particularly on section 70 of the Social Security Act.

This Bill failed by one vote, but we must still try to make changes to section 70 of the Social Security Act, it is a very unfair section.Parliament seem adverse to making changes to this, but why should we pay immigrants our pension when they have never contributed a dollar to our tax system. On the other side of the coin we penalise our own kiwis who have worked overseas and then come home thinking they can have their NZ pension, but if you have not been living back in NZ 5 years before you are 65 years you will be turned down. So Kiwis please be aware of this!

NOT ALL PENSIONERS ARE EQUAL SOME ARE MORE EQUAL THAN OTHERS!

There is an increasing number of unhappy retiree’s who find to their horror that they are affected by an obscure and unfair part of our Social security legislation.

Our first example is a married couple Jan and Jon [not real names]. Jan has a good state pension from Norway, so it is understandable she does not also get the NZ pension, even though she has lived in NZ for 20 years [she would qualify]. Jon has been a good NZ citizen and lived here all his life and expects to get the married pension rate of the NZ Superannuation at the age of 65. However he finds that not only does Jan lose all her NZ Super because her Norway pension is to high, but any excess of her overseas pension is deducted back to the NZ level.

Application of the out-dated section 70 of the social security Act means Jon gets a pension many thousands of dollars lower than other married men simply, because of whom he married. He is told the government expects married people to share resources and support each other.

Further protests elicit the stock response that the policy is designed to ensure that a couple with an overseas pension are not in a better position than a couple who have spent all their lives in NZ.

Had Jon been sensible and married an Australian woman with a large Australian pension, he would get the full-married persons NZ pension. Though she too may lose part of her pension down to the rate of a NZ pension!

If Jon’s wife had been a new immigrant with no pension and had not worked in NZ, after ten years would get the full NZ pension.

Is divorce an option for Jon?

Perhaps the better option for Jon and Jan is to leave NZ. Under the 2009 amendment to the retirement legislation, he is entitled to take the full gross NZ pension, with no deductions, because of Jan’s pension, to most countries in the world. Some of these countries will not even tax the NZ payment.

Our second example Jane [not her real name] came to NZ when she was 60 years old, she was eligible for the UK pension, which is paid to women at that age. Her pension was from taxed income from her working life in Britain, as much as 70 pound had been taken from her monthly pay packet. This didn’t only cover tax; it also included deductions for National Insurance, so she would get free or subsidized medical and dental treatment after she retired, and ‘Graduated Pension Contribution’, which earned her the basic pension when she retired. Money deducted from tax income was taxed again once the UK government started paying it to her as her pension. This money stayed in her bank account in the UK and this she accessed through her plastic ATM card. Jane didn’t know how she would cope if that card ever failed her! She would have no easy access to her money at all. Perhaps it would be easier to transfer it to NZ?

So off she went to the IRD, where somebody told her not to worry about it; the arrangement was ‘reciprocal’ and she wouldn’t lose out [big lie]. Jane wrote to the IRS in Britain, closed her accounts there and arranged for her pension to be paid into her bank in NZ. Oh dear!

It turned out that reciprocal doesn’t mean the same in NZ as it means in the Oxford dictionary. It doesn’t mean you get free medical and dental on the same basis as in Britain, nor does it mean that when you reach 65 – which a couple of years later she did – that you get your full UK pension.

Oh no! That goes to the NZ government and you get the lower NZ Pension, much much less. So Jane is now 73 and much much poorer!

She is still working part time, but is now the poorer and just a conduit through which money passes. She would be much better of in the UK, but loves NZ and wants to stay here, because her daughter lives here.

There is no logic with the way our government treats people, both these above people should receive their full reciprocal pension no questions asked. It would be all spent in our country [a benefit] and after all it is theirs!

Then on the other hand folks can come to NZ from other countries with no pension live here ten years and receive the full pension no problem. Also under the ‘Family unification’ scheme they can then bring parents in, who have Never ever contributed a cent to the NZ system and they can ALSO collect the pension, how unfair is that to us taxpayers and the above Jan and Jane. Something has to change NOW!

Another warning folks for your family’s that are working overseas!

If they wish to collect the pension when they retire back to NZ they need to be back in this country ten years before pension time, or the government treats you like a new immigrant and you are not deemed eligible for the NZ pension. The only other way around this one is if you are coming from a reciprocal pension country like Australia, Britain, Canada and more that you then bring your entitled pension home from that country.

Just still be aware that our greedy government with take some of that from you, because those countries are all paid a higher pension.

Begs the question that we should be paid a higher pension in line with other Western countries

C Humphreys

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