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NZ Herald in 2008

Seniors protest against rules on foreign pensions
NZ Herald on 24 July 2008
By Simon Collins

Septuagenarian protesters greeted Social Development Minister Ruth Dyson at an Auckland Grey Power meeting yesterday with placards demanding their rights to foreign pensions.

Frank Dunn, 75, of Albany, and Willy Bocxe, 79, of Glenfield, held up signs saying "We save, you steal" and "Duped super" as Ms Dyson arrived at the meeting in Ponsonby.

Auckland branch president Donald Dunn forbade the pair from taking their placards into the meeting and refused to allow more than one question on any issue. But that did not stop questions from many of the 70 pensioners about the Government's "confiscation" of their foreign pensions.

Last month, Ms Dyson announced that the Government had completed a review of overseas pensions and decided to keep the existing policy, which deducts most overseas pensions from the pensioner's entitlement to New Zealand superannuation.

This saves about $200 million a year by denying full super to about 50,000 people who have overseas pensions - a tenth of all superannuitants.

Most are immigrants, but 7 per cent are New Zealand-born and paid into foreign pension schemes while working overseas.

British-born retired machine tool fitter George Childs, 73, told Ms Dyson inside the meeting that when he and his wife came to New Zealand in 1964, the Government promised that they would be entitled to a full New Zealand pension after 20 years.

When he retired, 35 years later, he found he could not get NZ super unless he paid his British pension of £20 ($52.50) a week, earned in his 13 years of working life in Britain, to the NZ Government.

Mr Bocxe, a former Air New Zealand aircraft engineer, said his Dutch pension for his initial years working in the Netherlands paid him more than his reduced entitlement to NZ super, even though he has lived here for 37 years.

New Zealand-born opera singer Barry Mora, 67, said he lost part of his NZ super because he paid into a super scheme when he worked in Germany.

But Ms Dyson said the Government could not let overseas pensioners keep their foreign pensions on top of full NZ super because that would be unfair to people who never worked overseas and paid taxes for their whole lives in New Zealand.

"We have a very short period of residency in New Zealand as a qualification for the NZ pension, 10 years," she said.

"Most New Zealanders wouldn't feel it's fair for a person who spent only 10 years in New Zealand to get a full pension in addition to a pension from their country of origin."

Documents obtained by the NZ Pensioners Abuse Association show that officials concluded early in the policy review process in 2004 that New Zealand's policy was "unsustainable" in view of growing migration both to and from this country. Already 26 per cent of those living in New Zealand aged 65 and over were born overseas.

Many countries, including Germany, Austria and Sweden, had refused to sign reciprocal social security agreements because of New Zealand's policy of confiscating pensions paid to migrants from those countries.

Officials recommended New Zealand should adopt the standard international policy of proportionality, paying one-40th of the NZ super for every year that a person lived in New Zealand between the ages of 20 and 65.

A Cabinet paper released last month shows this proposal was refined into a "dual system" which would have given superannuitants the option of either proportionality or the system of full NZ super with overseas pensions deducted.

The paper says this was rejected because "people with an overseas pension entitlement would be financially advantaged in comparison with people who lived all their life in New Zealand".