Lobbying for the 50+ age group
Grey Power is a lobby organisation promoting the welfare and well-being of all citizens aged 50+. They are well organised, well known to the general public, and have a relatively high profile in both the media and Government circles. This lobby group knows how to make its voice heard.
Grey Power has a dedicated policy on NZ Superannuation, details of which can be found here. They make it clear that Government terminology is basically marketing speak and misleading, especially when stating that NZ Super is 66% of the average wage, which is the married couple rate, but the amount paid to each individual is actually 33%.
However, Grey Power has not defined its position on Section 70 in its official policy. Media coverage suggests Grey Power supports a call for changes to legislation, but remains vague as to the details.
We will keep at the issue. We have contacted Grey Power but not received an answer.
Age Concern is another lobby group serving the needs of older people. In addition to providing practical support to individuals, Age Concern campaigns on issues such as age discrimination and pensions, and works to influence public opinion and Government policy. While Age Concern does not have a policy on NZ Superannuation, it does have a general policy framework. It reads:
"Policies that work for older people
Age Concern New Zealand plays an important role responding to government and non-government policy development initiatives. We are also proactive in addressing older people's issues directly with government.
If proposed policy changes affect older people we make submissions (written and sometimes oral) to the appropriate bodies, such as select committees for government consultations.
Proposed law changes may directly harm older people or may have indirect consequences. Age Concern New Zealand is experienced at spotting both.
Where an existing law causes problems or unfairness for older people, Age Concern New Zealand can engage with the relevant minister or agency to work toward a solution. Amendments of existing statutes or regulations is one of the solutions we can offer. Media comment on issues outside of the policy area can draw off our policy expertise."
As Age Concern is a charity and as such short of resources, they prioritise the issues they address, and Section 70 is not currently high on their list. They did, however, raise the problem with the Government in 2008, and we are delighted to say that Age Concern shares our opinion on the deduction of overseas pensions. Chief Executive Ann Martin wrote to a pensioner: "We are keen for overseas pensioners to receive what they are entitled to." In their 2008 exchange with the Government (Minstry of Social Development) Age Concern wrote, in the first place discussing pensions of the employee/employer-funded Canada Pension Plan (CPP) which is similar to many other contributory pensions:
"It seems strange that the CPP is considered to be analogous to NZ Superannuation when it is an employer/employee funded scheme which has the effect, not unlike KiwiSaver, of ensuring that individuals save for their own retirement.
Indeed this inconsistency is noted in paragraph 73 of the 2005 report to Cabinet on the treatment of overseas pensions and payment overseas: 'Currently section 70 authorises the direct deductjon of second tier earnings related pensions, despite the fact that, other than being administered by the state, they have little resemblance to NZS.'
New Zealand Superannuation is paid regardless of whether a person has worked, regardless of whether a person has saved for his or her own retirement - yet older New Zealand residents who have worked in Canada appear to be being penalised precisely for having worked and saved."
It might help to move the problem higher up on Age Concern's agenda again if more people write them and make it clear that it is still as pressing as it was in the past.
The Retirement Commission is an autonomous Crown entity, set up in 1993. The Retirement Commissioner's role was established under the NZ Superannuation and Retirement Income Act 2001, and he/she is appointed by the Minister for Social Development and Employment.
The commission’s statement of intent outlines its main purpose: “The Retirement Commission helps New Zealanders prepare financially for retirement through education, information and promotion.” Under the above-mentioned act, the commission is required to review the retirement income policies implemented by the Government. In 2007, it completed its first three-yearly review; the next was presented to Parliament on 7 December 2010. To be honest, we were positively surprised about it, as Diana Crossan recommended to discontinue Spousal Provision. More in the right column.
The fact that the Retirement Commission is a quasi-Government organisation suggests that it is not a lobby group whose primary commitment is to the aged, but that it is an extended arm of the Ministry of Social Development. It would not bite the hand that feeds it. Nevertheless, their website is a useful resource for background information, such as booklets and reports.
We have asked the Retirement Commission for a statement about their stance on Section 70. The answer was no answer to our question. We have posted it as a Letter from Wellington, so you can learn a bit about the art of avoiding hot topics.
Link to the 2010 Retirement Income Policy Review
The Review contains 17 recommendations.
The Retirement Commission's 2010 Retirement Income Policy Review (7 December 2010)
Retirement Commission recommends to discontinue Spousal Provision
Retirement Commissioner Diana Crossan has recommended changes to New Zealand Superannuation to keep it affordable over the long term and to strengthen the principle of universal individual entitlement.
Diana Crossan said changes were critical to preserve New Zealand Superannuation for the next generation. "We know that there’s a huge number of baby boomer superannuitants coming, and we can’t keep on ignoring this issue until it’s too late", she said.
The primary recommendation is a package of two measures starting in 2020, designed to keep New Zealand Superannuation affordable when baby boomers will make up the majority of superannuitants and the costs of New Zealand Superannuation are accelerating.
- Raise the age of eligibility:
From 2020, begin gradually raising the age of eligibility by
2 months per year, so that it reaches 67 in 2033. In parallel, a transitional means-tested benefit should be introduced for those aged 65 who are unable to financially support themselves.
- Adjust the formula used to calculate the annual increase: From 2020, the rate adjustment should be the mid-point between the percentage increases in the CPI and in average weekly earnings. The real purchasing power of New Zealand Superannuation would still be protected by ensuring that the annual adjustment is never less than the increase in the CPI.
- Strengthen the principle of universal individual entitlement
- Remove specific areas of unfairness in the current system that are all based on a person’s partnership status
1. Remove the non-qualified partner rate:
This would stop people under age 65 or who don't meet the residency test receiving an income-tested New Zealand Superannuation when their partners are superannuitants.
2. Equalise the unpartnered and partnered sharing rates.
3. Abolish the deduction of a person’s foreign pension from their partner’s New Zealand Superannuation when the partner's foreign pension exceeds the value of New Zealand Superannuation.
Diana Crossan said the second set of recommendations was based on the principle of fairness. “New Zealand Super is the entitlement of every qualifying New Zealander regardless of their income or partnership status", she said.
The full-length media text from above is available here. It contains the hilarious term of "overseas state pensions" - just exactly what the "overseas pensions" we are talking about are not. They are personal retirement contributions.