Former PM Jacinda Ardern

... and be kind ;-) 

The great promoter of kindness is not kind to pensioners anymore since becoming leader of the New Zealand government.


Jacinda Ardern puppet at "The Backbencher", a restaurant/pub opposite Parliament in Wellington.

The Chief Hypocrite: "Injustice" - "Totally unfair" - "Human Rights violation" - "Unfairness of this scheme"

Jacinda Ardern stepped down as New Zealand's Prime Minister on 25 January 2023 because she "had nothing left in the tank". Chris Hipkins became her successor.


We and a large number of pensioners have written to the new Prime Minister Jacinda Ardern, asking if she still thinks the deduction of overseas pensions from NZ Super is unfair, as she did in 2012 and also in March 2015.

But since she came into power on 26 October 2017, her office forwarded most of these letters and emails straight to Carmel Sepuloni, the Minister for Social Development, and there they are answered by MSD's mandarins respectively ghostwriters, using always the same stock phrases.

Ardern obviously refused to answer questions on her stance and even on her plans regarding the contentious issue, as this would have been a request for the Prime Minister's opinion and not for "real" information like copies of information. We were also told that Sections 187-191 fell within Sepuloni's responsibility, and that she - Ardern - had confidence in the Minister to address those issues in consultation with her officials. Wonderful!

Jacinda Ardern had held our all confidence and hope before the General Election in 2017. But as she has remained mum on the issue, we just wanted to refresh her and your memory - before the governmental brain fade set in -  by copying several paragraphs from the Hansard's transcript of a parliamentary debate on the Social Security Amendment Bill on 25 March 2015.

"A very controversial section of the Social Security Act"

Jacinda Ardern: Section 70 is a very controversial section of the Social Security Act. Most members of this House who conduct any form of constituency work will be familiar with this section of the Act. It allows the Ministry of Social Development, if you have an overseas pension that is considered to be equitable or similar to New Zealand superannuation, to deduct dollar for dollar from that overseas scheme—dollar for dollar. 

We have been doing this direct deduction policy since 1938. That is the time period in which it has been happening. At that time probably there were not so many people who were eligible for overseas pensions—

[Stuart Nash : Great Minister of Finance then.]

Jacinda Ardern: But since that great Minister of Finance—that is right, at the time—12 percent now of our superannuitants are eligible for an overseas pension and I would wager that that will continue to grow. 

Some would say: “OK it’s fair. No one should really — if they have spent, obviously, enough time overseas to be eligible for an overseas pension — double dip, come home, be eligible for New Zealand superannuation, collect the overseas superannuation, and get that double whammy. If they are going to collect that, and it is similar to the New Zealand scheme, let us just deduct until they end up getting the same amount that everyone else in a pension scheme would.” 

The issue with this policy is about making a judgment over what overseas pension schemes are similar to ours and what are not. And that is where there seems to be real injustice in the way that the direct deduction policy works.

I have seen countless cases of pension schemes that have been contributory, where someone has put in their own money into a scheme, come back to New Zealand, assumed that they are going to be able to draw down that scheme, which they have contributed to, only to then have that deducted from their New Zealand superannuation entitlement. 

You can argue the rights and wrongs of a scheme like that. What you cannot argue, in my mind, is that under that policy, if they deduct right down to zero, such is the generosity of that alternative scheme, the ministry will then start deducting from your partner’s entitlement—someone who may not have even lived overseas, may have known you for only the last 10 years. They will have their pension deducted as well as yours because you have reached full entitlement. That cost, from memory, saves the New Zealand Government roughly $5 million a year, that specific provision, but it is totally unfair. In my mind, it is a human rights violation because it predominantly affects women who have their entitlement deducted. Their entitlement is their entitlement. It should never be affected by anyone else’s.

So the point that I raise for the Minister is this: if we are looking at eligibility criteria, if we are looking at who is eligible for a New Zealand pension and has been overseas, why not look at the big stuff? 

Why not look at whether or not in this changing globalised environment, where more and more New Zealanders are working offshore, where more and more are contributing to an overseas pension scheme — I have one — our scheme is equitable anymore? 

New Zealand First has a policy on this and Labour before the last election tried to get the select committee to review this issue because it was so difficult to navigate for so many people. That was turned down by the select committee — unfortunately, voted down by National. 

But we have given our commitment that we will review the direct deduction policy with a view to removing the unfairness of this scheme — the fact that it is antiquated and no longer caters to the modern environment and the fact that so many schemes actually are not similar to New Zealand schemes and yet are being treated as such. 

So, Minister, I would have hoped that alongside Supplementary Order Paper 56 there would be a prime opportunity, alongside reviewing section 79, to review section 70, to at the very least acknowledge the point that has been raised by the Human Rights Commission over the deduction of a partner’s pension, or at least commit to reviewing the rest of the inequity that exists in our scheme currently.

Link to the transcript of Jacinda Ardern's speech:

Link to the video of Jacinda Ardern's speech: 

(unfairness of Sections 187-191 - at the time still Section 70 - starting at 4:20 minutes)

Jacinda Ardern's honourable attempt to have the injustice addressed in Select Committee in 2012 (mentioned in her speech above):

Sunday Star Times in 2012: see below

The Social Services Select Committee 

failure of 2012

In 2013, Jacinda Ardern explained in a letter to a pensioner why there was no inquiry into the pension injustice in 2012:

"Last year I took a set of terms of reference to the Social Services Select Committee and asked that they undertake an inquiry into pension portability. [...]

The Select Committee spent several months considering the issue. Last August a briefing was sought from the Ministry of Social Development on the issue, and as Labour members on this committee this only reinforced our view that a full inquiry was needed. Unfortunately, this was not a view shared by the Government members, who hold a majority on the committee. As a result, the inquiry we sought was voted down by the committee.

[...] I am disappointed that I am unable to write to you with a better outcome, but maintain that this is an issue that needs to be resolved."

Chairperson Peseta Sam Lotu-liga wrote:

"The New Zealand Labour Party, the Green Party, and New Zealand First are of the view that the information received [from MSD] confirmed that an inquiry was warranted. The majority of the committee, while sympathetic to the anomalies of the system, decided not to initiate an inquiry. Prevailing fiscal constraints were also a consideration in this decision."

The old story: justice is only desirable if it costs no money...


Sunday Star Times in 2012

An outspoken MP & a flood of letters to the editor

For three weeks in a row the Sunday Star Times ran articles and comments on the issue of the Direct Deduction Policy.


After a story on 08 July 2012 which exposed the injustice happening to retirees with overseas pensions, the deputy chief executive of the Ministry of Social Development, Iona Holsted, answered in "depth" with the ministry's stock phrases of twisted truths and blatant lies on 15 July 2012.


This caused outrage among affected pensioners and, of course, we were also appalled, resulting in a flood of letters to the editor. Therefore the Sunday Star Times decided to print letters at length on 22 July 2012 and dedicate two pages in the business section to the issue. This included a comment by editor Rob Stock and an opinion piece by Claire Dale of the University of Auckland.


Story from 08 July 2012 (2 parts)

Iona Holsted's (= deputy chief executive of the Ministry of Social Development) answer on 15.07.2012: 

Rob Stock's opinion piece on 22.07.2012 and link:


"Time to address NZ Super-immigrant policy"


OPINION: MP Jacinda Ardern is correct: Parliament needs to inquire into the unlanced boil that is this country's policy of reducing NZ Super for immigrants by the amount they get in pensions built up while overseas with savings made from their own earnings.

Two weeks ago we reported that Ardern was drafting the terms of reference for a select committee inquiry into the issue, though it would require the Government to allow it to go ahead.

Anyone reading the internal 2004 Ministry of Social Development Review into the issue - a review that was never supposed to have been released - will see that an open inquiry is long overdue. Labour is not alone in thinking this. United Future and NZ First both believe the policy is unfair.

The review said in blunt terms that the policy was unsustainable. It said that people generally lost their entire overseas pension and that there was a genuine “lack of cost-sharing”. It wasn't the last review, and one gets the feeling it didn't impress ministers who didn't want to spend the money implementing fairer cost-sharing, but to me, the sheer number of reviews shows there is an issue of fairness that needs an airing in Parliament.

Under our policy, people can live in New Zealand for years and years and yet every cent of their pensions from overseas is taken to help pay for their NZ Super. That's deeply resented by other countries, who believe that New Zealand is not genuinely sharing the cost of paying for its own residents' retirements.

To their eyes, New Zealand was taking all the taxes and economic benefit from immigrants' working lives and then using pensions built up in their time overseas to reduce the costs for New Zealand using the opaquely worded section 70 of the Social Security Act. In some cases that can result in people who have lived and worked here for 20 years not getting a bean in NZ Super, so New Zealand pays no contribution to their retirement.

So unimpressed are some countries they simply refuse to pay state pensions here. The 2004 report notes that around $21 million of such payments were not coming from countries like Germany, Switzerland and the US because “our current policy settings mean these countries will not negotiate a social security agreement with us”.

The 2004 report notes that the current policy, which impacts more Kiwi Brits than any other group of immigrants, saved the Government $178m a year. That sum seems to have grown to $240m. It's big money, particularly for a government keen on getting the country back into surplus. If there is a case of injustice here, it is one that could cost a lot to fix.

The pensioners claim their savings are being raided, and that in some cases it is forcing them into penury. They consistently claim that they were told they would earn their NZ Super entitlement in full when they were considering coming here. It was only when they retired, that they found the pensions they had built up from contributions from their earnings were taken to part or fully fund their NZ Super.

They feel they were decieved. Worse still, for those who have Kiwi spouses, any surplus is taken to reduce the NZ Super of their spouse. They feel that even though they were required to save a portion of their salaries into the schemes that built the pensions, they are pensions built up with their own money, and that they are being unfairly raided. They feel it is like having a KiwiSaver nest egg used to reduce a person's NZ Super.

Just how much it might cost to "address" the issue is a tough one to estimate. There have been internally mooted suggestions with a range of price tags which would allow those receiving overseas pensions the right to keep some portion of it giving them some benefit from their past salary sacrifices.

We do not know how much extra would flow in from countries currently not willing to make payments here while each dollar is deducted from NZ Super rather than a fairer proportion. An open inquiry could provide some of this information.

Will it happen?

My gut feeling is Ardern will be rebuffed. It is expedient to ignore the issue, but as I say, there is no harm in giving people who helped build this country a fair hearing and reporting on it to the New Zealand people.

- © Fairfax NZ News


Letters to the Editor (22 July 2012)

1. Sissi Stein-Abel (NZ Pension Protest)

I admire Iona Holsted, the deputy chief of the Ministry of Social Development (MSD), for the guts to tell New Zealanders that it is right and fair to deduct contributory overseas superannuations from NZ Super. She is twisting the truth and telling only half the story. 

The most important injustice Iona Holsted did not mention is the meanest part of Section 70 which legalises the theft of contributory overseas pensions. The law might be old (from 1938 and renumbered 1964), but Spousal Provision was added in 1985. This tool allows NZ authorities to deduct any excess overseas pension from a spouse’s payment of NZ Super.

While the government/MSD claims NZ Super is paid individually, they turn a couple where one of the two receives an overseas pension into an “economic unit”, deducting the overseas pension from both partners’ added NZ Super entitlements and – in a worst case scenario – leaving a New Zealander who has never left the country with nothing! 

This directly contradicts Iona Holsted’s claim that the government’s policy was “to ensure New Zealanders who spent their whole life working and paying taxes here were not disadvantaged when compared with others who have worked overseas or immigrants […] who have entitlement to overseas state pensions”. 

The interesting thing about this unbearable claim is that Brendan Boyle, the CEO of MSD, just lately wrote in a letter to a pensioner that this sentence would disappear from the collection of MSD stock phrases. This pensioner had successfully demonstrated that the deduction is inequitable. MSD, on the other hand, failed to demonstrate that the deduction is more than just a revenue-maximising exercise. All they can do now – and that is what Iona Holsted has done – is to say: „It’s the law.“ 

As the co-author of the website I can report that hardship resulting from the policy is widespread and not only occurs in isolated individual cases.

We receive emails from suffering pensioners every week, some accumulating debt, others never being able to buy new clothes, and all of them getting sick, tired and stressed. And as good as it sounds, what would MSD do when Iona Holsted says: “There is no need for anyone to be in hardship as we work through their entitlements.” What rubbish talk! Would they suddenly not deduct a foreign pension? 

In the name of all retirees who are going through hell due to this rip-off I would like to thank business editor Rob Stock for exposing this hot potato topic and MP Jacinda Ardern for speaking out and doubting the rightfulness of this shameful injustice.


2. Christopher Arnesen (Christchurch)

In attempting to justify the appropriation of overseas pensions (SST, July 15th), Iona Holsted, deputy chief executive of the Ministry of Social Development (MSD), makes one questionable claim after another. Her most misleading claim however concerns reviews of overseas pension deductions which, she alleges, were not in favor of a proportional system, and which found the direct deduction policy reasonably sound.

In early 2000, senior civil servants met Ministers of Finance and Social Development (Michael Cullen and Steve Maharey) in the newly elected Labour Government to warn them that New Zealand Super in its present form was inequitable, unstable and unsustainable. The two ministers instructed MSD to prepare a comprehensive Review of NZ Superannuation Portability for their consideration. 


In all, five reviews (involving nine government departments) were prepared over the next seven years and submitted to the two ministers. The third and most important of these reviews was submitted in May 2004 but rejected by the two ministers who demanded “more modest options”. The two remaining reviews were successively watered down with the final review (2007) a virtually meaningless document amounting to little more than an appeasement for politicians anxious to avoid responsibility.


Extreme measures were taken to conceal the 2004 review from public scrutiny until the Ombudsman ordered its release. The complete 2004 review has been posted for anyone to see on the website with a summary under the section “The Nation Betrayed”.


Contrary to Ms Holsted's claims, this review recommends that to best resolve the problems associated with NZ Super, a proportional system should be adopted. It also asserts that a proportional sytem would adversely affect very few - although mechanisms would need to be provided to ensure that no one was disadvantaged. Significantly, these recommendations for a proportional system have the support of all government departments.


Given her position, it is inconceivable that Ms Holsted would not be fully aware of the 2004 review. It is a pity that one of our highest ranking, highest paid civil servants has chosen to mislead the public - in order to justify the plunder of retirement savings from the elderly.


3. Rosanna Leman, Auckland

As one of those who will be affected by the deduction of my private overseas pension what the minister of social development is saying is only part truth and a bit bent at that.


Some countries like Canada have a two-tiered system. That is two separate pensions. In Canada you get a government pension that is funded from general taxes, Old Age Security (OAS), that everyone is entitled to as in NZ Super. This meets the contingency rules in section 70, and I don't object to the deduction of that pension - but herein lies the rub; in Canada, if you have worked, it is also compulsory to make contributions through paycheck deductions by both the employee and the employer at 1 per cent of your paycheck to Canada Pension Plan (CPP).


This pension plan is not funded by the government, only by employee and employer contributions, and so is for all intents and purposes a private pension. If you haven't worked you don't contribute and don't receive.


CPP, even though it is administered through the government, is not funded by the public purse, so that alone disqualifies it from the section 70 rules being applied because it is not of the same contingency as the NZ Super. The fact that one can get divorced and hand part or all of that pension to an ex-spouse al qualifies this as private funds.


Agreed, it is complex because many countries have different systems; however, that doesn't excuse the fact that the NZ government consistently refuses to acknowledge the theft of private funds hiding behind a law that is loosely interpreted to allow them to treat funds like these as public.


This is a convenient cash cow robbed from those of us who have worked hard and put extra away to be a little better off in old age (not unlike KiwiSaver), and I believe that means I have funded my own pension when others have not. Some have never paid a thing. What right does the NZ government have to help itself to funds that were invested on my behalf that I and my employer contributed to?


It's an injustice. It is very telling on the NZ government that only eight countries have a reciprocal pension agreement with us when other more human-rights oriented countries like Canada have up to 30 reciprocal pension agreements in place. In this instance I feel ashamed of my country.

(Last update: 19.04.2023)

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