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PM Jacinda Ardern

"Injustice" - "Totally unfair" - "Human Rights Violation" - "Unfairness of this Scheme"
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 her office forwards 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 refuses to answer questions on her stance and even on her plans regarding the contentious issue, as this would be a request for the Prime Minister's opinion and not for "real" information like copies of information. We are also told that Section 70 falls within Sepuloni's responsibility, and that she has confidence in the Minister to address those issues in consultation with her officials. Wonderful!

Jacinda Ardern has held our all confidence and hope before the General Election in 2017. But as she has remained mum on the issue, we just want to refresh her and your memory - before the governmental brain fade sets 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 video of Jacinda Ardern's speech:
(unfairness of 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 (in Media Coverage on this website)

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...