Sunset over Lyttelton Harbour
Bad manners, lack of interest and xenophobia
Let me start by wishing each and every one of you a Happy New Year, hoping that we can make progress with our pledge to stop the discriminatory deduction of employer/employee-funded overseas pensions from NZ Super and to enable affected pensioners to not be worse off than New Zealanders who have never left the country.
The fight against the confiscation of employer/employee-funded overseas pensions is continuing, with a relatively small number of very active individuals fighting and lobbying on all fronts.
Discussion on Raising the Residency Requirement to 25 Years
There has also been constant discussion on this issue, with the tenor that the residency requirement for receiving NZ Super should be raised from 10 to 25 years. Many New Zealand groups, starting with the Retirement Commissioner and not ending with Auckland University’s Retirement Policy and Research Centre (RPRC), have jumped on the bandwagon (well, the latter has been promoting it forever). Even NZ First is now suddenly suggesting to raise the threshold to 25 years and stop the deductions.
What is wrong with this?
In principle, we have absolutely no problem with raising the residency requirement to 25 years because 10 years is (too) generous – BUT only if those who have not lived in New Zealand for 25 years receive proportional NZ Super. Where is the fairness when someone who has lived AND worked AND paid taxes AND supported NZ Super for older New Zealanders for e.g. 24 years, receives not a cent of NZ Super?
Why should such a person depend one hundred per cent on their overseas superannuation which is not a full pension but was accumulated before this person even set foot in New Zealand such that the overseas pension only reflects the contributions made while living overseas? (And I don’t even mention the inconsistencies and inequalities of the policy, giving preferential treatment to a few nationalities and discriminating against the rest.)
Some claims are even absurd. The Retirement Commissioner, for example, says that an extension to 25 years residency for immigrants would be “in line with OECD countries, instead of New Zealand’s 10 years”. Most overseas pensions are compulsory, contributory and employer/employee-funded, not tax-funded like New Zealand’s state pension.
This means: each individual pays a certain percentage of their wages and salaries into individual retirement funds and receives superannuation payments that reflect the amounts of contributions made, not years of residence. High earners who have paid a lot of money into the scheme receive higher pensions than people who earned and contributed less during their working lives. What is so difficult to understand about this?
Just a few examples. To qualify for the full amount of the UK’s Basic State Pension (which is not a state-funded pension like NZ Super!), men must have made contributions for 44 years, women for 39 years. To get the minimum of 25% men need to pay into the scheme for 11 and women for 10 years. Contributory pensions (Superannuation Fund) in Australia are paid out as lump sums when a person retires.
In Germany, everyone who has contributed for a minimum of five years receives a pension. People who have paid into the scheme for less than five years are refunded their contributions. People who have not worked don’t get a pension. Poor people can apply for social welfare benefits which are funded by the local communities. Only eight other countries and one city pay a universal pension with no test other than citizenship, residence and age, comparable to NZ Super: Mauritius, Namibia, Botswana, Bolivia, Nepal, Samoa, Brunei, Kosovo and Mexico City. We don’t think many of these are OECD countries.
Some pensioners have found great support in their fight against the Spousal Provision where the “excess” of an individual’s overseas pension is deducted from their spouse’s NZ Super, going through the process outlined by the Human Rights Commission. This policy is in breach of Human Rights. But instead of the problem being solved in a timely manner, the Ministry of Social Development (MSD) has resorted to dirty tricks and unacceptable delaying tactics. We can just hope that they don’t get their way and that the end of this part of Section 70 will come soon.
We have also noticed that a big part of the media have stopped making our voices heard. The Fairfax media, for example, have not printed Letters to the Editor on the issue for a long time now. Therefore false claims, like the one mentioned above, have remained unchallenged, making the reader and the general public believe that the facts were correct while they are not.
And we have become aware of stories that have been researched and/or suggested by various authors, in the Fairfax media as well as in the NZ Herald, but have not been published or have been rejected by their editors. (An exception was a big article on New Zealand’s seniors in the Fairfax media in which the NZ Seniors Party were treated in a fair way but false claims by Grey Power have remained unchallenged.) We don’t know if the media have been gagged but we have big concerns about the state of the media and fair reporting in this country. Still we would like to encourage you to keep on writing letters to the media in order to remind them that we will not be silenced.
If you are a member of Grey Power, don't waste your money any longer and quit the organisation. In an interesting email exchange we and some affected pensioners had with Grey Power a little while ago, their president Tom O'Connor made it crystal-clear that the organisation doesn't find anything wrong with Section 70, only acknowledging that the Spousal Provision might be a bit unfair.
The president wrote: "We know there are unfair anomalies in S70 and we know there are a very few people who assume they have a birthright to come to New Zealand and take more from these combined pension schemes from abroad and from New Zealand than they are entitled to. This small minority has made things difficult for the majority of honest people and for my team of negotiators who are making a major effort to solve some very complex issues.”
The “few people” who take away from “the majority of honest people” (who are New Zealanders, of course) he is talking about is you and you and you. The way he says it is polemic, populist and xenophobic. Several pensioners have written to us how, years ago, they were told to “go back to where you came from” when contacting Grey Power and asking for support. More information on the exchange with Grey Power appears on this page: http://www.nzpensionprotest.com/Home/related-topics/organisations-for-seniors
Earlier in the past year we were in promising discussions with NZ First about collaboration on the overseas pension issue but this has turned to custard, confirming the opinion of many of you that Winston Peters can’t be trusted – which, unfortunately, applies to most politicians.
But then out of the blue came Denis O’Rourke’s Private Members Bill, named “New Zealand Superannuation and Retirement Income (Fair Residency) Amendment Bill”, in which he called for raising the residency requirement to 25 years. We wrote to him in late November, suggesting that his claim that the 10 years requirement was an unusually short time “globally” showed his lack of understanding of the nature of overseas pensions.
Let me just repeat: only eight banana republics and one city (Mauritius, Namibia, Botswana, Bolivia, Nepal, Samoa, Brunei, Kosovo and Mexico City) have a universal, non-means-tested pension solely based on residence that is comparable to NZ Super.
“You seem to think it is ok to make people who have worked and contributed to overseas pension schemes pay for their own retirement, while Kiwis who have never contributed a cent and not even worked much in New Zealand should receive full NZ Super. NZ Super would be paid to Kiwi millionaires and retired criminals who have spent most part of their lives in jail and cost the taxpayer a fortune, just for the fact that they have lived in New Zealand 25 years+, and immigrants and returning Kiwis who have worked here and paid taxes for 20 or 24 years, including the taxes used for the NZ Super of others, would miss out completely. If this is justice as you understand it, I must live on a different planet.
"Your earlier bill (about proportional NZ Super) hit all the right notes […] I would support your new bill if you added proportional NZ Super for those who have lived here for less than 25 years. The Portability scheme (when someone moves overseas in retirement) works exactly this way. Why should it not work for people staying in New Zealand and continuing to pay taxes here? Their overseas pensions are not comparable to NZ Super, they have paid for it themselves while Kiwis could invest this money (which is deducted from wages and salaries overseas and goes into the compulsory pension schemes) in property, shares, savings funds, or just waste it.
"And what about people who have not lived here for 25 years but receive very small overseas pensions (because they have studied a long time and didn’t earn much during their earlier career, therefore didn’t make big contributions which would result in higher pensions; or if they have done a lot of unpaid volunteer work etc)? Where is the safety net for such people?
"The message you give with your bill is this one:
"Come with money and you will be very welcome, just like tourists who spend big.
"Come with skills and work hard, pay taxes for years and years, and fund New Zealanders' tax-funded state pension, NZ Super.
"Invest huge money in New Zealand, help to make the country's economy thrive, create jobs, be a good citizen. All this is expected of you.
"But once you retire and have lived here for less than 25 years, you are treated like a greedy parasite. […]”
His answer for those who have not received my email at the time:
“Yes I do think that you live on another planet.”
While I am a person with a good sense of humour who can see the funny side of this answer, in this context the response was totally inappropriate and unacceptable. It also shows a lack of leadership by the party leader when an MP even dares to treat his constituents in such a way. It gives the message that NZ First or at least Denis O’Rourke doesn’t care at all about his constituents and his potential voters, and perhaps even that NZ First take pensioners’ votes for granted, whichever policies they suggest or support, just because some years back Winston Peters invented the Super Gold Card.
The New Prime Minister
After John Key’s surprise resignation as Prime Minister we have to wait and see what his successor Bill English has to say about the Section 70 issue. He has already declared that, unlike Key, that NZ Super is an issue to be raised at some point (e.g. raising the retirement age to 67).
But we don’t expect much on the topic before the General Election, as it would cost votes, and as letters are answered by the same Mandarins as under John Key, we won’t hold our breath for a (positive) change of direction to eventuate under a National government. Labour and the Greens surely agree with us on the unfairness of Section 70, and have taken on a few points from the Select Committee consultation on the Social Security Legislation Rewrite Bill. But it is always easier to make promises when not in Government.
NZ Seniors Party
If you want guaranteed representation in Parliament, you’d do better to join the NZ Seniors Party. They still need more members to be able to register for this year’s General Election. Find details and membership forms on their website: http://www.nzseniorsparty.org.nz/. Even if they fail to reach the five-per-cent threshold, the issue would be raised regularly in the run-up to the Election.
Taxation of Overseas Pensions
We do not fight Section 70 only but also the unlawful taxation of a few overseas pensions by New Zealand's tax authority (IRD). The Double Taxation Agreements with Germany, the USA, France, Finland and the Philippines rule that only the country where the pensions originate can tax them. If you have paid taxes on overseas pensions from those countries, apply for a re-assessment of your tax returns. This can result in refunds of thousands or even ten thousands of NZ dollars. Tell your friends from those countries about it! More information on our DTA page: http://www.nzpensionprotest.com/Home/the-law/double-taxation-agreements
We have published a new website, warning potential immigrants not only about the pension issue but also on other legal pitfalls on top of Spousal Provision when someone gets into a relationship with a New Zealander. You will find it here: www.dontmovetonewzealand.com.
That’s it for today. I hope I will find the time to inform you about interesting news more frequently. No promise, no New Year’s resolution, though!
Have a good and healthy year!
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