No-one must be better off

Sissi Stein-Abel has New Zealand in focus - the good and the bad things of life in paradise. The Direct Deduction Policy leaves her disconnected with her adopted home country.

Injustice in paradise

By Sissi Stein-Abel

For quite a long time I had really believed New Zealand was paradise. This, of course, was before I came to live here permanently.

I think this is a natural process when you get to know a country and its society in depth and not just like a passing tourist. Only when you live somewhere and are confronted by the daily nuisances, get insight into politics and administration, the attitudes of the people towards nature and business, you get to know the negative sides of a place. And again I find it only natural that you do not like everything you see, the way you did not find everything great in your old place.

I have always dreaded the number one question Kiwis use to ask us immigrants: "And? Do you like it in New Zealand?" Of course, I like it. But I also dislike it. When I think of New Zealand's immigration and pension policies I even hate it. When I walk or drive through irrigation- and dairy-cow-free landscapes, get up close with penguins and sea lions or chat with the fantails in our garden I love it. But with this migraine-triggering pension horror on my mind I would not bear life here without the support of my much more relaxed Kiwi husband who is suffering more silently.

First of all: we immigrants do not all come to New Zealand because of its paradise-like look, although surely some young folk might do so. But they are the ones who do not have a lot to lose as they have not started their careers yet, so their entitlements to an overseas pension are minimal.

People in their thirties and forties have a lot to lose - and do

People who move to New Zealand in their thirties or forties, as I did, think long and hard if the nice landscapes at the doorstep are worth the huge financial and emotional cost emigration imposes on you, as there is: house sale at a loss, NZ$ 20,000 for a shipping container, damage and loss of furniture and personal belongings during transport, storage and delivery, loss of a well-paid job, loss of income, loss of entitlement to a full (overseas) pension, friends and family left behind. In a few words: loss of a stable safety net.

My Kiwi husband and I lived apart for several years until we came to the conclusion that it would be best for us to live together in New Zealand. Well, I was ready to move on from my longtime employment and try to make some money as a foreign correspondent in New Zealand. And sure, my English was much better than my husband's German, and at the time the German economy was already in rather a bad shape whereas the job market in New Zealand was stable. My husband had his job in New Zealand but it was more than questionable whether he would have found employment in Germany.

After having learnt that I would get my German superannuation without deduction in New Zealand, and that New Zealand was not allowed to tax my superannuation due to article 18 of the Double Taxation Agreement between the two countries, I risked the big step. Like all other people I have spoken to, I had no idea of the existence of Section 70 of the Social Security Act.

The overseas pension is not a full pension

Regrettably, the majority of New Zealanders, including experts, fail to understand that overseas pensions from Germany and many other countries are not full pensions. NZ Super, on the other hand, is a benefit that is paid in principle to everyone over the age of 65 who has fulfilled a minimal residential requirement.

For 23 years, in addition to income taxes, I paid approximately NZ$ 200,000 into Germany's compulsory state retirement scheme. In return therefore I am entitled to a pension equivalent to 23 years of contributions. If I had continued to live in Germany I would have been entitled to a much higher payment.

The New Zealand government, however, considers it acceptable to regard such pensions as equivalent to NZ Super, deducting them from NZ Super simply because they are overseas pensions. Furthermore, not only does the New Zealand government deny me NZ Super because of my overseas pension; citing the Spousal Provision policy, it denies my Kiwi husband any form of NZ Super as well.

In spite of the contributions each of us has made to the New Zealand tax base and society we will both be forced to live in retirement solely from my 23 years of contributions to the German scheme. Adding insult to injury, we are informed by the New Zealand government that we should be happy that it does not intend to confiscate any money left over after the deductions that are made!

Similar situations await returning Kiwis who have lived, worked and made superannuation contributions overseas.

The Government punishes my husband for being married to me

When we complain to the New Zealand government - be it Prime Minsiter John Key, the Minister for Social Development (Paula Bennett, then Anne Tolley), the various Ministers for Senior Citizens or former Labour ministers such as Michael Cullen and Ruth Dyson - we are treated as greedy parasites.

Politicians and bureaucrats imply that we are trying to rip off the NZ Super scheme. They say that nobody should receive NZ Super without having made a fair and equitable contribution to the New Zealand tax base and society. Without fail we are told that no-one who has lived overseas should be better off than a New Zealander who has lived in New Zealand all his life.

This argument is absurd.

Consider my husband who has lived in New Zealand all his life. He is worse off and disadvantaged over the lifelong beneficiary or the ex-criminal who both get NZ Super.

Why should people who have paid NZ$ 100,000 or 200,000 or more into overseas pension schemes not get something out of them?

Kiwis who stay in New Zealand can save this money, invest it into property, pension schemes like KiwiSaver, shares - or waste it. We had no choice; the money was directly deducted from our wages, on top of the income tax. New Zealanders who stayed here had free health care. I had to pay more than NZ$ 1,000 into compulsory health insurance every month. Yes: month! And all this on top of income tax and pension contributions.

John Key and his colleagues find this fair. By permanently using the word "fair" in this context, he tries to fool the New Zealand public and create envy. By driving a wedge between Kiwis with NZ Super and those who only want their fair share, he hopes that the average Joe really regards us as greedy, and surely many will do.

Pathetic comments and real thoughts

What I find even more pathetic are the comments of John Carter, the former Minister for (or better: against) Senior Citizens. He calls us a lobby group and tells us more or less that no-one cares because we are a minority. He dares to say this because we have been quiet far too long.

I am also amazed about the ignorance of New Zealand parliamentarians. When I told a former cabinet minister about the Spousal Provision policy her reaction was: "This is means-testing!" And exactly this it is. But as we all know, NZ Super is not means-tested. Yeah, right.

Other comments are of bigger concern: the comments of ministers who say that the Government cannot afford to pay us NZ Super. So somehow they admit that it would be fair to pay us pensions as, of course, they know that people working here for 25 years and more have contributed to the tax base (which NZ Super is paid from) and to society. But they say they do not have the money to treat us in a fair way. They have to rob us to keep the state running. So this system really is legal fraud.

New Zealand will not flourish with dairy cows only

Sometimes I think the decision to live in New Zealand was the worst decision of my life. But I am happy that I have learnt of this well-hidden Section 70 many years before I retire, so I can plan for it, just in case the Government will never change the law.

I consider this a possibility because granting immigrants, returning Kiwis and their partners fair treatment will cost more money every year. Globalisation makes more Kiwis work overseas and more immigrants come into New Zealand. Without this flow New Zealand's economy will not flourish, not even if they make another ten million dairy cows breathe and fart methane into the atmosphere and transform the North and the South Island into huge irrigated paddocks.

What can I do?

For a start, I can warn potential immigrants of the hidden pension agenda. I will not tire to post information about the topic on the internet, write newspaper stories about it and send articles to international media, so other people can make informed decisions about their future. Meeting all these stressed and some even depressed pensioners at the Overseas Pensions Forum in Auckland in February 2010, immigrants and born and bred Kiwis, enhanced my will to fight against this injustice before it hits my husband and me.

Savouring life before retirement

I can also adjust my life before retirement. This does not mean saving every cent but enjoying life before it slips into uncertainty. I am in the privileged position that I do not have to work like crazy to make ends meet. Why should I waste my time working long hours, pay taxes and support the NZ Super scheme which benefits everybody in this country but the tens of thousands of people who have overseas pensions?

I already have to pay my own NZ Super, and I have to pay my husband's NZ Super with a part of my 50% overseas pension. My husband has been paying for other New Zealanders' pensions all his working life. I think this is a far bigger monetary contribution to the New Zealand tax base and society than most other Kiwis make.

In the meantime I savour what the New Zealand government will leave of paradise with its supporting mining, more irrigation and water schemes and subsidising the biggest polluters with our taxes.


(The above text was written in 2010. Sissi and her husband separated in 2016 but - for financial reasons - kept on living together as flatmates under the same roof. While not interested in a new relationship anyway, but with the knowledge she has now, she would definitely not enter into a relationship with a New Zealander, and face such a worrying financial future.

The situation as such puts huge stress on any relationship. The prospect of not receiving NZ Super after many years in New Zealand is sad enough for a migrant but it is an even greater burden on the affected New Zealander who loses his independence in retirement. While some women of the older generation might be used to depending on their husbands, it is an unbearable situation for a New Zealand man who has worked and provided for his family all his life.

The Spousal Provision ended on 9 November 2020. Sissi will not receive any NZ Super once she retires and receives a contributory pension from Germany.)

(Last update: 22.11.2021)

#nzsuper #newzealandsuperannuation #superannuation #newzealand #overseaspension #directdeductionpolicy #deduction #spousalprovision #spousaldeduction #sections187-191 #section70 #socialsecurityact #msd #winz #WorkandIncome #ministryofsocialdevelopment #newzealandgovernment #statepension #contributorypension #legalisedtheft #ripoff #lawchange #superannuationbill #carmelsepuloni #minister #socialdevelopment #victims #victim #victimsstory #victimsstories #sissisteinabel