Time to STOP New Zealand's pension rip-off
People entitled to a New Zealand pension, New Zealand Superannuation, who also receive an employer/employee-funded overseas pension, are likely to be in for an unpleasant surprise: their overseas payouts will be deducted from their New Zealand Super. This is called Direct Deduction. The practice is governed by Sections 187-191 (formerly Section 70) of the Social Security Act

The New Zealand government uses other states' contributory pension provisions for the payment of the tax-funded, universal NZ Super benefit. It saves New Zealand between NZ$ 400 and 500 million per year, and probably a lot more because only people, who receive a few dollars, are counted in the official statistic; those who miss out completely are not counted. 

[When the Social Security Act 2018 came into effect after a re-write on 26 November 2018, Section 70 was re-numbered into Sections 187-191, 434; S. 70A became 192 - 194;  S. 70B became 195, 196; other relevant Sections: 69G is now 173 - 176 and 69H is 177 - 180. But the facts have not changed at all. Read it as you like. Some links to the Ministry's pages might not work anymore but we'll check them over time.]

Until 9 November 2020 it was even worse. If a person’s overseas retirement payment exceeded the NZ Super rate for one individual, the “excess” amount was carried over to their partner’s entitlement and deducted from his or her NZ Super. This was called Spousal ProvisionIn a worst-case scenario, one partner’s high overseas retirement income could cancel out a couple’s combined New Zealand pension entitlement. After many years of lobbying, including our massive efforts and the launch of this website in 2010, this spousal rip-off has ended on 9 November 2020. 

But don't hang your hopes too high: this part of the policy affects only 400 to 600 couples. For more than 100,000 pensioners the deductions of their earned overseas pensions will go on.
A bad Super surprise for immigrants and Kiwis

The Direct Deduction Policy affects not only immigrants but also a growing number of New Zealanders, due to increasing global mobility and international work histories. It has been identified as highly unfair, but so far no changes to the law have been made.

This website highlights a number of points why this is so, how the Government is trying to keep the issue off the agenda and what this does to the people affected by Sections 187-191 (formerly Section 70).

While there are many aspects of the New Zealand pension law that need to be addressed, the primary aim of this website is for employer/employee-funded overseas pensions to be exempt from abatement against the tax-funded NZ Super. Only overseas pensions similar to NZ Super, including tax-funded pensions for civil servants, should be deducted from NZ Super. 

We have only reached our first goal by New Zealand's government passing the New Zealand Superannuation and Veteran's Pension Legislation Amendment Bill on 24 July 2020. This included the end of the Spousal Provision which came into effect on 9 November 2020, instead of 1 July, the delay caused by the chaos caused by COVID-19. The Spousal Provision was the most blatant breach of Human Rights and constituted discrimination on grounds of family status. But the fight goes on.
If you

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Facts and figures
o People with overseas pensions living in New Zealand: As of October 2017, 
89,336 pensioners were affected by the Direct Deduction Policy and 588 by the Spousal Provision. (But significantly more people are affected, see next point "Misleading statistic".) According to MSD, this saved the NZ government more than NZ$ 336 million in NZ Super payments. Discontinuing the Spousal Deduction would cost NZ$ 2,7 million.

The next statistic from March 2018 (95,863) and then March 2019 (98,586) counted pensions and not pensioners. But the numbers should not be dramatically different. The total amount the New Zealand government saved was more than NZ$ 400 million. See the 2018 table below. By March 2019 the amount had risen to more than NZ$ 427 million.

When we started this website in 2010, we had to use the statistic of the Ministry of Social Development from 2008. According to this statistic, 52,756 people received overseas pensions in New Zealand. Until July 2012 this number had risen to 63,989, and at the end of December 2015 it already stood at
83,754. Most are from the UK (56,745, compared to 47,898 in 2012 and 41,359 in 2008), Australia (15,309, compared to 8,953 in 2012 and 4,918 in 2008), and the Netherlands (4,120, compared to 3,588 in 2012 and 3,324 in 2008). Number four is Canada with 2,060. All other countries provide overseas pensions for less than 1,000 people. (More details from 2008 here.) The total number has been increasing steadily, from 42,336 (2004) to 46,996 (2005), to 51,464 (2006), and after a slight drop in 2007 to 50,019 up again to 52,756 in 2008 and 63,989 in 2012. 

According to information given to the "Sunday Star Times" in mid July 2012, 24 per cent of those 64,000 retirees had deductions higher than NZ$ 5000 a year. At the end of 2015, 247 people had weekly (!) deductions of NZ$ 400 and more, this is more than NZ$ 20,000 per year! 
o Misleading statistic: The MSD statistic is misleading, as only overseas pensions of people are counted who also receive a portion of NZ Super (and if it is only one dollar) because their overseas pensions are lower than NZ Super. Immigrants and returning Kiwis who miss out on NZ Super completely are not counted. Therefore the number can be dramatically higher. We happen to know the number of German pensions paid into New Zealand. As of June 2010 exactly 802 people in New Zealand received a German pension. The MSD statistic of June 2008 listed 200 German pensions. Even if this number is slightly higher now it means that 75% of people with German pensions do not receive any NZ Super thanks to the Direct Deduction Policy - and that the total number of all nationalities missing out completely is several thousands higher than the nearly 84,000 published by MSD (December 2015).

Update: in 2015 the German Pension Insurance (Deutsche Rentenversicherung) paid out 961 employer/employee-funded pensions to New Zealand residents, 645 of those were paid to German citizens. 381 individuals received various amounts of NZ Super, that's roughly 40%. "Only" 60% missed out completely. The higher percentage of people receiving NZ Super payments was the result of the high NZ dollar. 
o Spousal Provision policy: 124 people were affected by Spousal Provision in 2009. Numbers here were also rising, in 2010 it was at about 200 and 588 in October 2017. Several couples affected by this policy have sued the Ministry of Social Development. After many delays the case was heard by the Human Rights Review Tribunal in March 2018. Our report about the hearing is available in the "The Fight" section on this website, and directly via this link: Welcome to the World of Millionaire Beneficiaries.
o The myth of a universal pension: The Crown Law Office defends Section 70, asserting that a couple can be perceived as a single economic unit. This is questionable as NZ Super is not a needs-based or means-tested system, and is received by some of the nation's wealthiest citizens as individuals in their own right, whether married or not, and regardless whether both of them have ever worked and paid taxes. 
o NZ Super overseas: At the end of June 2008, 13,825 people living overseas were receiving New Zealand Superannuation (and 38 Veteran's Pensions) - at the time all at drastically reduced rates. Pensions overseas were paid at a rate of 50%; now they are proportional to time spent in New Zealand. So a total of 66,581 people did not get full NZ Super and many more none at all. And it is only paid to people who are ordinarily resident in New Zealand when applying for NZ Super.
o Pensions similar to NZ Super: 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.

The English language doesn't help to distinguish state pensions and employer/employee-funded overseas pensions. In e.g. French and German there is a clear distinction: you have "rente" and "Rente" for contributory pensions and "pension"/"Pension" for the tax-funded pensions for civil servants. The term "rente"/"Rente" is derived from the Latin verb reddere (French: rendre, English: render). This means: to give back, to return. It implies that people receive a "rente" (or: render) only if they have been a contributory member of an insurance or investment scheme; it is a revenue from an asset or a capital. Contrary to that, a pension is granted to pensioners from a fund they did not have to contribute to, as is the case with civil servants.

o Ministerial mind twist: In its 2005 Review the Ministry of Social Development stated that only overseas pensions that are similar to NZ Super should be deducted, and that earnings-related second tier overseas pensions have little resemblance to NZS. In the 2007 Review the deduction of "fundamentally different" pensions was justified with the following mind twist: "Both pensions are nevertheless state social security pensions that are paid for the same purpose." This states that both kinds of pensions are - pensions. The Chief Executive of the Ministry of Social Development has the almighty power to decide which overseas pensions can be deducted from NZ Super. We urge the Government to take this overwhelming power off this one single civil servant and stop deducting overseas pensions that are not similar to NZ Super. Read more about the findings of the famous Reviews.
o The Government's justification of the injustice: Paying a person NZ Super and not deducting his/her overseas pension would place him/her in a better position than a New Zealander who has never left the country. The truth is that a lifelong New Zealander married to someone with an overseas pension might not get any NZ Super at all. He is worse off. People who have spent 50% of their working life in New Zealand might get 0% NZ Super. Parliamentarians, civil servants and others enjoy special treatment at taxpayers' cost. More about this on our Offenders and Letters from Wellington pages.

How much the NZ government cashes in from other countries
According to the Ministry of Social Development (MSD) the number of deducted overseas pensions and the savings on NZ Super have fallen quite significantly between June 2019 (see statistics table below) and March 2020.

This is probably due to the fallen NZ dollar. Overseas pensions have higher value due to the variation in the exchange rate and therefore more pensioners miss out on NZ Super completely. As the exchange rates have to be monitored continuously, a lower NZ$ value has immediate effect on the number of pensioners who do not receive any NZ Super at all.

Comparison of numbers (deducted pensions - value of deducted overseas pensions):
March 2019:      93,760 pensions – NZ$ 396,112,359
June 2019:         98,923 pensions – NZ$ 440,128,105
March 2020:      95,160 pensions – NZ$ 429,872,123

Statistic by the Ministry of Social Development:

 June 2019:

1. Amounts are per year in NZ$
2. These statistics from March 2021 and June 2019 count the number of pensions that are deducted from NZ Super, not the number of pensioners. The number of pensioners might be a little lower, as some pensioners receive several overseas pensions if they have worked and contributed to retirement schemes in different countries.
2. The number of pensioners includes only those who receive a portion of NZ Super, and be it only a few dollars. Those who miss out on NZ Super completely are not included.
3. The "Other" category combines countries with fewer than ten pensioners each.

http://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/benefit/l go to Excel tables and click the link to NZ Superannuation, (and there: 
New Zealand Superannuation and Veteran's Pension data tables; then, in the Excel file, click on: Overseas pension information - latest quarter)

Numbers as of March 2019
A total of 98,586 overseas pensions were deducted from NZ Super, saving the NZ government NZ$ 427,112,331 - the pensions of those pensioners not included who do not receive any NZ Super at all. In total the amount pensioners are denied could be in the region of NZ$ 500 million, perhaps even much higher.

Statistic October 2017
In October 2017 the number of affected pensioners stood at 89,336. The total amount taken off these people stood at NZ$ 336,290,646 million!

See full table of the steady rise of the numbers of affected pensioners and the amounts taken off them by the New Zealand government from 2009 to 2015 
at the very bottom of this page.

Statistic June 2015
Annual deduction bands        Number of pensioners
NZ$ 5,000 and under                            49,073   (Dec. 2015 approx. 24,744)
NZ$ 5,001 to 10,000                             11,452   (Dec. 2015 approx. 20,701)
NZ$ 10,001 to 15,000                             2,699   (Dec. 2015 approx. 36,582)
Over NZ$ 15,000                                       765  (Dec. 2015 approx. 1,727)
The figures in the category over NZ$ 15,000 and a proportion of those in the category 10,001 to 15,000 included pensioners who had a Kiwi partner who had never left the country. They did not receive any NZ Super and, on top of this, had to pay for their partners' NZ Super (Spousal Provision).   

More detailed table from 20 July 2012:      

More Problems than just Section 70: Warnings and Dangers
We have linked another website with NZ Pension Protest. www.dontmovetonewzealand.com delivers a summary of the problems around the Direct Deduction Policy and portability, as well as NZ-specific financial pitfalls of relationship property when a relationship goes wrong.
If the direct link doesn't work, please click here: Don't move to New Zealand

Unlawful Taxation of some 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.  More information on our DTA page.

Serious allegations against the Government
In this Letter to Carmel Sepuloni our author requests an enquiry into MSD, its CEO and Crown Law. As you can imagine, all allegations were dismissed, as is the case when a Ministry investigates itself. But the facts still stand.

Where to complain: Contacts in New Zealand
Since the General Election in September 2017 some faces have changed but not much has happened regarding Section 70. A re-write of the Social Security Act has taken place; it came into effect on 26 November 2018. But don't get fooled. The intention was only to "translate" outdated language and overhaul the innumerable changes that have occurred over many decades. It did NOT mean that the legislation would be changed. Then, in June 2019, the Ministry of Social Development hid a fact sheet on changes to NZ Super where they said the Spousal Provision would be discontinued from 1 July 2020. 

Minister for Social Development:

Minister for Seniors:
Dr Ayesha Verrall: a.verrall@ministers.govt.nz

Chief Executive of the Ministry of Social Development:
Debbie Power
She succeeded Brendan Boyle in February 2019. Boyle was the successor of all overseas pensioners' arch-enemy, Peter Hughes. 


NZ Pension Protest 
on YouTube!
How the Rip-off works; Faces of the Great New Zealand Rip-off;  How the Government lied to the UN; and more.

20-year residency requirement is set to become law
The Third Reading of and Royal Assent for changing the residency requirement for NZ Super from 10 to 20 years is only a formality. Read the report on the Second Reading of the so-called New Zealand Superannuation and Retirement Income (Fair Residency) Amendment Bill here (click link).

Select Committee report on Fair Residency Bill
The Select Committee for Finance and Expenditure has delivered its final report on the  
New Zealand Superannuation and Retirement Income (Fair Residency) Amendment Bill to Parliament early this month. The suggestion is to raise the residency requirement for NZ Super from 10 to 20 years and phase it in over a period of ten years. However, it would have immediate effect on those who are 62 and 63 years old by 30 June this year. Despite lots of submitters requesting to abolish the Direct Deduction Policy under the new regime, the Select Committee didn't mention the issue at all. The rip-off will continue indefinitely.

Deductible and non-deductible pensions
MSD has released the lists of deductible and non-deductible overseas pensions under the Official Information Act. They read like a hap-hazard compilation with more typos than anything.

You find the list of non-deductible pensions on our "The Law" page.

Outlandish decision
by the HRRT on the Spousal Provision
More than two and half years after the hearing, the Human Rights Review Tribunal (HRRT) has published its unbelievable decision on the Spousal Provision. They think nothing is wrong with punishing a pensioner financially if he is in a relationship with a person who receives an overseas pension, while the rest of New Zealand is assessed as individuals regarding NZ Super. 

Lucky everyone that it has taken the HRRT so long to step back into the Middle Ages, as the law has been changed in the meantime and will come into force on 9 November 2020. 
More info here: click link.

What New Zealand's parties promise before
the General Election
With the General Election just a month away, you might want to know which party would fight on your behalf against the Direct Deduction Policy. The answer: probably none of those currently in government, and National either. Winston Peters has made new promises; we don't even mention them because they are only there to be broken again, as usual. Read all about the merits and hypocrisy of our parties and politicians on the subpages of this site: The Actors in Wellington

Law change postponed to 9 November 2020: Spousal Provision ends
In a scandalous move Carmel Sepuloni, the Minister for Social Development, has brought in a Supplementary Order Paper (SOP) in which all the changes to the NZ Superannuation and Veteran's Pension Legislation Amendment Bill that should come into force on 1 July 2020 but was then postponed to 9 November 2020. The explanation was MSD's huge workload due to the Covid-19 crisis. 

While the Government has pushed through laws under urgency without following the proper process, this bill had passed all stages correctly but only got its third reading in Parliament on 21 July 2020. The bill passed into law by receiving the Royal Assent on 24 July 2020. 

The changes to the legislation which includes the end of the Spousal Provision had been published on the MSD and WINZ websites since June 2019. The amendment bill doesn't include any suggestion to backdate the payments to 1 July. This just shows that the Government and its Minister didn't really care about ending this injustice and breach of Human Rights. 

More news on the News page in the Fight section, click here
For older news, click News Archive

Born-and-bred Kiwi has enough of New Zealand
One of the pensioners who challenged the Ministry of Social Development at the Spousal Provision hearing in front of the Human Rights Review Tribunal in 2018 had become so depressed about being punished for being married to a woman with an overseas pension, that he left his home country at the age of 83. The news so far in the Newsletter section, his personal story here in the Victims section of this website.

Debbie Power new CEO 
Debbie Power is the new Chief Executive of the Ministry of Social Development (MSD). She took up her role as the successor of Brendan Boyle in February 2019. Previously she was the Statutory Deputy State Services Commissioner, State Services Commission, from August 2015. More about Debbie Power on the MSD website. Click here.

New Act in Effect
The new Social Security Act 2018 has come into effect on 26 November 2018. It does not change the facts around the Direct Deduction Policy; in most places the Act has just been reworded and "translated" into plain English, as the authors claim. Section 70 has been split up into a raft of new numbers (see second paragraph, in green) in the main article on this page. Your overseas pensions are still stolen off you.

Winter Energy Payment
You find a comprehensive new page on the Winter Energy Payment on this website. The policy punishes pensioners who don't receive NZ Super due to the deduction of their overseas pensions. Pensioners who are not receiving NZ Super do not receive the Winter Energy Payment, adding insult to injury. The heating supplement is paid to millionaires and people who don't need it. This is a scandal of epic proportions.

06.03.2018 - 14.03.2018
Discrimination Hearing at Human Rights Tribunal
A hearing on Spousal Provision/Deduction has taken place at the Human Rights Review Tribunal (HRRT) in Wellington from 5 to 14 March 2018. It can take two or three years until the Tribunal makes a decision. 

Three plaintiffs were legally represented by the Office of Human Rights Proceedings (OHRP) in the case against the Ministry of Social Development/Attorney General, claiming the spousal deductions are discrimination on grounds of family and marital status.

Our report about the hearing is available in the "The Fight" section on this website, and directly via this link: Welcome to the World of Millionaire Beneficiaries.
Impact statement of the three  plaintiffs here: 

It was telling that only the New Zealand Herald attended two days of the hearing, the rest of the New Zealand media ignored it completely. 
Link to the NZ Herald story on the first day of the hearing: 
Story day four of the hearing:

Young Children Paid for their Stepfather's Pension
How was this possible? Read here (right margin)

26 January 2018
Time for Reminders
To prevent complete memory loss, a widespread phenonemon among politicians, we would like to remind Prime Minister Jacinda Ardern of her commitment to stop the unfair overseas pension deductions in 2012 and 2015. 

In 2012 She drafted terms of reference for a Social Security Select Committee inquiry into the issue, as she was  convinced an injustice was being perpetrated upon people who had worked in New Zealand for years, only to find their NZ Super payments dramatically reduced because of having earned KiwiSaver-like pensions overseas.

Among other things she said in the Sunday Star Times on 08 July 2012:

“There is a question of fairness.”

“I have seen some terrible cases.”

“I receive many letters on this issue and I am sure most electorate MPs do too.”

Full article in the Media section.

In 2015 Jacinda Ardern held an impressive speech in Parliament in which she labelled aspects of the Direct Deduction Policy "totally unfair" and in "violoation of Human Rights"

And look here what the Labour Party had to say while in Opposition.

As recently as before the General Election last September Jacinda Ardern told us her government would look into the issue if elected, and promised the same to several pensioners. However, we heard from NZ First that demands to changes to Section 70 (since Nov. 2018 Sections 187-191) "died during the coalition negotiations".

Letters to the PM are forwarded to Carmel Sepuloni, the new Minister of Social Development, and from there barely anyone who wrote to her has received a reply. We wonder if it is due to incompetence, ignorance or contempt.