Home‎ > ‎The Fight‎ > ‎

HRRT Hearing March 2018

Welcome to the World of Millionaire Beneficiaries
The following article is not a transcript or unbiased he says/she says write-up of the Spousal Provision/Deduction hearing at the Human Rights Review Tribunal (HRRT). It is a commented report, with further research done on certain aspects that were presented and discussed at the Tribunal. We are biased, and one of our most important tasks is to reveal the spin used by the Ministry of Social Development (MSD) and Crown Law to justify Section 70 of the Social Security Act.

The bureaucrats are ruling the country

The hearing on Spousal Provision, named McKeogh & others vs Attorney General, at the Human Rights Review Tribunal (HRRT) in Wellington – which took place from 5 to 14 March 2018 – has been a display of what we already know, and in so many respects. But still – long before a decision is due in two months or in two years – it has left us in disbelief what is going on in New Zealand: the fact that the bureaucrats in the government departments are ruling the country and not the elected politicians.

We have seen how the Ministry of Social Development (MSD) and lawyers operate and tick. MSD respectively the Attorney General, as the defendants in the case, were represented by a counsel who defended the indefensible, justifying discrimination and unfairness imposed on New Zealanders married to or in a loving relationship with the “wrong” partners, namely partners who have lived in New Zealand for decades, contributed to the tax base and society in many different ways, but receiving an employer/employee-funded overseas pension they have earned before setting foot in New Zealand. 

This Crown lawyer made everything plausible to them: that it’s not their money they are losing, that they don’t understand why their and the “excess” of their partners’ overseas pensions need to be deducted from NZ Super dollar-for-dollar. He told them that black was white. 

Softly-speaking Crown lawyer selling "alternative facts"

You would have thought that an Auckland University law professor should be able to distinguish right from wrong. But Professor Paul Rishworth QC acted like a hired gun, as another observer called it. 

You wouldn’t think that one of the research interests of this former Dean of Auckland University’s Law School, as listed on the University’s website, is Human Rights, that he has worked for the Human Rights Commission in the past, that he is a Member of the Order of the British Empire (MBE) due his legal services as Attorney General of the Pitcairn Islands, an office which he held from 2007 to 2015. 

After these honourable roles he has been working as a Senior Crown Counsel in the Constitutional and Human Rights Section at Crown Law in Wellington and, as listed in 2016, held a fractional appointment at the Law School, teaching a course on Equality and Anti-Discrimination law.

But obviously there is no need for lawyers to have a moral compass. They distort the truth so much that not a grain of it remains. The one who pays them is always right, and they can be convincing. Paul Rishworth served MSD’s “alternative facts” softly speaking, with minimal gestures, like a teacher explaining the world to ignorant students, with the only difference that he didn’t try to convince some young idiots but three lawyers (Chairman and two Members) on the bench who didn’t know much or anything about the subject. 

The fog of misrepresentation

We wonder if the Tribunal’s Chairman, Rodger Haines QC, and the two female Members, Gillian Goodwin and Paolaga Selma Scott, have fallen for this spin on this complex issue or if they have seen through the fog of misrepresentations and distortions, or if the compelling evidence the three plaintiffs, two of their spouses and one further witness have given, was strong enough to convince the Tribunal that the Spousal Provision/Deduction is in fact a breach of Human Rights on the grounds of family status.

After the evidence of witness Jan Burke who receives zero dollars NZ Super because her non-qualified spouse’s US Social Security pension is deducted from her NZ Super alone, the Judge told the defendant that he could not see that these couples were advantaged over lifelong New Zealand couples “but significantly disadvantaged”. He also said: “We have heard clearly and loudly from the plaintiffs about the unfairness”, and that they had pleaded their cases in a “very dignified and compelling way”.

Unfortunately the jumpy presentation by Robert Kee, the Director of the Office of Human Rights Proceedings (OHRP), which provided free legal representation to the plaintiffs, didn’t always help, as did the occasional questioning of their own position by closing a statement with the words: “But I might be wrong.” While surely only rhetorical, it left uncertainty in the air.

Only one allowed means-test

The major fact that remains, regarding Spousal Provision/Deduction as an isolated feature of Section 70 (Direct Deduction Policy), is the definition of entitlement to NZ Super in the 2001 Retirement Income Act. In paragraph 7 it says that every person that fulfils the age (65 years old) and residency requirements (10 years between age 20 and 65, five of which after age 50), is entitled to NZ Super, making the New Zealand pension a universal and not a means-tested benefit for a core family (“economic unit”). 

The only allowed means-test regarding NZ Super is the provision when a non-qualified spouse is included in the application. And let’s not forget, NZ Super already contains a spousal element by paying out a different rate to married individuals (half married rate).

While the Direct Deduction Policy was not disputed in the HRRT hearing, with the deductions accepted for the sake of the narrow scope of the case, it was, of course, permanently mentioned and discussed, as it is the base for the particularly discriminatory unfairness of the Spousal Deduction. 

"Is the Spousal Deduction unfair or unlawful"

The point, according to the Judge, was the question if Spousal Provision is “unfair or unlawful”. And further: “If the law is clear, it just has to be tolerated and should be passed back to Parliament.” The plaintiffs’ evidence illustrated “the unfairness but doesn’t address the legal issue, the lawfulness”. He added it was “hard to compare one point of unfairness with another one”.

While the plaintiffs claimed that the spousal deduction was inconsistent with Section 19 of the New Zealand Bill of Rights Act 1990 (Bill of Rights) because it limits their right to freedom from discrimination (by reason of their family status, the fact that they are married to a particular person) and that this discrimination is not a justified limitation of that right (Section 5 of the Bill of Rights).

The evidence the two MSD bureaucrats, so called expert witnesses, gave for the Crown were considered pathetic and even an insult to the Tribunal by us and other observers. 

But their lengthy monologues about the history of everything that had remotely to do with social security since the 16th century in the United Kingdom, might have helped to fog the minds of the Tribunal, particularly on day three when the Policy Manager of the Income Support Team declared that the “unit of assessment” must not be the individual but the “economic unit” – despite NZ Super being universal and individually paid and not income- and asset-tested, “unless an overseas pension is included”.

"Economies of greater scale"

This is a contradiction in itself. He claimed that “married couples achieve economies of greater scale” than two singles living together, while everybody knows that pensioners affected by the direct deductions in general and spousal deductions in particular are at the bottom of the wealth scale. 

In their own 2005 Review on the treatment of overseas pensions, signed by Peter Hughes (then CEO of MSD), Mark Sowden (Manager Labour Market and Income for Secretary to the Treasury), Michael Cullen (Minister of Finance) and David Benson-Pope (Minister for Social Development and Employment), they confirmed on page 2: “The majority of these people [page 14: 85%] have been in New Zealand for more than 30 years and are living on modest incomes. Seven per cent of these people were born in New Zealand.” 

On page 14 it reads: “Overseas pensioners typically belong to low income households. Over sixty percent of overseas pensioners have an income level below the threshold which would preclude entitlement to a Community Services Card.”

While saving an annual NZ$ 336 million on exactly these people right now by deducting their overseas pensions from NZ Super, NZ Super is paid “as financial assistance” to New Zealand millionaire couples!

"Feeling like a much-diminished man"

The three plaintiffs and their partners can’t visit their families and friends overseas anymore. One of them, 82-year old Malcolm Larsen, said he feels like a much-diminished man because his Norwegian wife of 33 years receives all the money from overseas and he, with only a fraction of NZ Super, can only decide on small-ticket items. 

Their social life is changing, friendships have become more distant due to the inability of keeping up with others. “It is psychologically devastating”, he said, “one country confiscates money from another country, and it is the confiscation of money accrued by another person at another place and another time. This makes me very angry.”

The plaintiffs and other pensioners affected by the spousal deduction suffer, as the OHRP Director summarised it, material disadvantage, significant emotional harm, loss of dignity, stress, ill-health, feelings of guilt (for marrying their partner and causing the situation) and loss of financial independence. But no, said the MSD expert, as just mentioned, they “achieve economies of greater scale”! 

"Women should be treated as dependents of their husbands"

He explained every single social welfare benefit at length, going back several centuries and to the Maori hapu, and then to 1898 when social security officially started in New Zealand. He even quoted the Destitute Persons Act of the year dot to prove that working women should be treated as dependents of their husbands if those received an overseas pension. 

He explained how many shillings were paid at the time for which need. He put stress on the word “need” – and we still wonder why New Zealand millionaires would receive NZ Super if it is need-based and not an individual entitlement. Obviously there has been no shift in thinking at the Ministry of Social Development since the early days. Therefore just a little reminder: we are in 2018 now.

Paul Rishworth also dug out various other sections of the Social Security Act and said: ”You can’t pay twice for the same need” and “the same contingencies” (Section 72), therefore deducting an overseas pension from NZ Super was “not means-testing”. So what is it?

Earned entitlements vs social welfare benefit

Section 71 is about the “Deduction of weekly compensation from income-tested benefits”, and it says that if a person “is qualified to receive an income-tested benefit (other than New Zealand superannuation) […] where (b) the person’s spouse or partner receives weekly compensation, 2. the rate of the benefit payable to the person must be reduced by the amount of weekly compensation payable to the person”. 

This is clear when someone applies for an Accommodation Supplement or Disability Allowance while also receiving NZ Super. But contributory overseas pensions are not social welfare benefits like Jobseeker Support or Residential Support Subsidy. 

Overseas pensions are earned entitlements while social welfare benefits are paid to people in need who cannot support themselves. On top of it all, overseas countries don’t export means-tested social welfare benefits to foreign countries, including New Zealand; only earned pensions are exported. Therefore the need-based approach with double payment for the same contingencies can never apply.

Spousal deduction already applied before it was introduced

From MSD’s policy advisor Alexander McK. we also learnt that the spousal deduction was already applied – obviously illegally – before it was officially introduced in 1955. We were told that currently 588 couples are affected by Spousal Provision and that it would cost the ridiculous amount of about NZ$ 2.7 million a year to abolish it.

About 20 couples where only one partner is entitled to NZ Super suffer the deductions from one partner’s NZ Super, usually from half the married rate, leaving them with hundreds of dollars less than comparable lifelong New Zealand couples, and most with not a cent of NZ Super, forcing these people to work well into retirement to make ends meet. We know, and it was repeated, that the Social Security Appeal Authority (SSAA) has ordered the CEO of MSD after a hearing in November 2016 to defer the spousal deduction in such extreme cases.

But MSD can even force a person who doesn’t want NZ Super to apply for it by threatening to stop the payment of their partner’s NZ Super. This can then enable MSD to apply the spousal deduction, as happened in plaintiff Donna La Fauci’s case. The result often is the same. Zero dollars of NZ Super for a couple, forcing them to live on the overseas pension of a person who moved to New Zealand after retirement! How can this be fair?

The CEO has the discretion to defer deductions

The SSAA criticised in the November 2016 case that “the draftsmen and Parliament have overlooked the impact of deducting the overseas pension of a spouse or partner from the single or half married rate of NZ Super” and that the appellant in the specific case was “subject to differential treatment because she is married and she is married to a non-New Zealand resident. This amounts to discrimination under s 23 of the Human Rights Act 1993 and as such appears to be a breach of s 19 of the Bill of Rights Act 1990. […] This is an issue which Parliament clearly needs to address. […] The CEO failed to give proper consideration to the consequences of the deduction […] and it appears to discriminate against a person who is married without justification.” 

The CEO, we heard at the Tribunal, always has the discretion to defer deductions but clearly he doesn’t do so by default, and we wonder why not.

But we were not surprised that MSD stopped the deductions of two children’s (dependants’) US survivors benefits from their stepfather’s NZ Super one day after their case was discussed at the Tribunal. We heard this happened “because too many people got involved”, meaning the case had become public after being published on our website and presented by the OHRC Director at the Tribunal in an affidavit. 

The plaintiffs' evidence was compelling enough

The affidavit was finally not accepted as evidence because it would have widened the scope of the spousal deduction case and because the Chairman thought the plaintiffs’ evidence had been compelling enough. (Good on the mother of these children to go public despite the happy ending in her family’s case – because it is about justice for everyone, not about a few lucky individuals MSD is trying to keep quiet by deferring the deductions.)

It was particularly insidious that McK.said that several reviews on the treatment of overseas pensions – we call them “The famous Reviews” – have been made between 2001 and 2007, he didn’t go into much detail. He said MSD was unable to locate the scoping paper of the 2003 Review and then jumped to October 2007 when Cabinet agreed to discontinue the spousal deduction. (And then, as we know, the Labour government didn’t find the money in the 2008 Budget to scrap it.)

Between these dates there have been the telling reviews of 2004 (Portability) and 2005 (Treatment of Overseas Pensions and Payment Overseas) which were full of the terms “unfair” and “inequitable” and explained that many other countries refused to negotiate Social Security Agreements with New Zealand because of Section 70. 

Facts sold as perceptions

There was barely any mention of this, and facts were sold as perceptions: Pensioners perceived the deductions as unfair while they were not, according to their twisted or brain-washed minds.

They don’t see a contradiction in the application of the Direct Deduction Policy and Spousal Provision when pensioners live in New Zealand and the payment of proportional NZ Super without these deductions under the Portability rules when the same persons move overseas. 

Jan McKeogh and her husband would receive NZ$ 550 gross in NZ Super if they moved to Germany and spent all the money there; right now in New Zealand they receive zero. The MSD experts didn’t say it with these words but along the lines: by receiving proportional NZ Super only, these people are already punished enough. 

But fact is that a lifelong New Zealander receives full NZ Super if he moves overseas (but only to a country New Zealand doesn’t have a Social Security Agreement with…) and the person with the overseas pension receives proportional NZ Super while he/she wouldn’t receive any if he/she lived in New Zealand. The proportional payment is (relatively) fair as far as we are concerned – but definitely not logical.

"State-administered overseas pensions" and "benefits"

One interesting thing was that no-one used the term “overseas state pensions” but instead “state-administered overseas pensions” – as this definition has become the tool to deduct about any overseas pension (despite most of these pensions being administered more on behalf of the individual insured person than on behalf of the government). 

The exceptions are strictly private pensions and all the other inconsistencies we know about. They now avoid the term “overseas state pension” to hide the fact that MSD themselves had written in the reviews of the early 2000s that the overseas pensions they were deducting had barely any similarity to NZ Super, and that probably only pensions similar to NZ Super should be deducted.

But then again the overseas pensions became “benefits” – which is even more ridiculous because contributory – employer/employee-funded - pensions are exactly the opposite. They are work-related self-funded contributions to a social insurance scheme and not a social welfare benefit. 

People overseas who have not or not contributed enough to such an insurance scheme and need financial assistance to make ends meet, receive social welfare benefits which are funded from completely different sources. In some countries they are paid out of general taxation, in other countries by local or regional authorities from local taxes – but not by the pension insurance fund.

Social welfare benefits for the rich

So now we have millionaire beneficiaries in New Zealand who receive (social welfare) benefits in the form of NZ Super which is unrelated to previous work and earnings. 

Alex McK. confirmed under cross examination that no other income than overseas pensions is included in the Direct Deduction Policy: not income from well-paid employment, not income from investment, not income from private pension schemes, not income from KiwiSaver, not opted-out overseas pensions (like the one from the UK), or when the contributions made overseas are mandatory as in about all overseas pension insurance schemes but coincidentally not administered by the overseas government (like in Chile), or when so-called occupational pensions are paid to civil servants (who, in most cases, have never contributed to an insurance scheme – or to underfunded schemes like the New Zealand GSF). 

And still he insisted NZ Super was universal and not means-tested. And the government-administered Chinese pensions that are not deducted from NZ Super were not even mentioned at this point! 

"Rewarding older people for their contribution to society"

McK. also said that the purpose of NZ Super was “to ensure an adequate standard of living in retirement and reward older people for their contribution to society”. Yeah, right! So each and every pensioner in New Zealand is rewarded for paying taxes, other people’s NZ Super, raising children and future taxpayers, caring for their family and elders, volunteering, being good citizens – unless, of course, an overseas pension is included, while longtime criminals who have been nothing but a burden on the tax-base and society receive full NZ Super if they happen to be out of prison in retirement.

The real reason for fighting so hard to keep the Spousal Provision in place is the fear that after removing it, all other pensioners would question the deduction of their overseas pensions and jeopardise the Government’s income stream from overseas respectively the cost savings on NZ Super (just under NZ$ 340 million in 2017). 

“The removal of the spousal deduction would undermine the principle of the Direct Deduction Policy”, said McK., and: “If the spousal deduction was removed, there would be pressure from pensioners affected by the Direct Deduction Policy.” The same in lawyer Rishworth’s reply to the OHRC’s closing statement: “Every other person who suffers the direct deductions will ask: ‘What’s the difference to my deduction?’”

Direct deduction saved the government NZ$ 336 million in 2017 

After all, the direct deduction is nothing but a cost-shifting exercise to the strong advantage of the New Zealand government which is abusing other countries compulsory retirement schemes in order to save huge amounts on the cost of NZ Super.

The number of ripped-off pensioners, depending on the exchange rate, stood at 89,336 in October 2017 – but more people are affected because MSD’s statistics only catch those who receive a dollar or two of NZ Super at some point. 

Not included are those who do not receive or even apply for NZ Super because their overseas pension is so high that they wouldn’t receive a cent. So why bother. Where there is money to be made or saved, the means obviously have to be adapted to the end, leading MSD and Alexander McK. to the conclusion: “The spousal deduction is a necessary addition to the Direct Deduction Policy, and the Ministry thinks it is fair.” 

Unelected bureaucrats defend the discriminatory policies

The Retirement Commissioner’s recommendation to abolish Spousal Provision was dismissed because “it requires legislative change”. Which brings us back to the Government that is elected by the people of New Zealand but the policies are enforced by always the same bureaucrats who insist on keeping the discriminatory treatment of this group of pensioners in place.

Under cross examination McK. got under some pressure, looking uncomfortable and stressed, and answering questions with his face turning red. Regarding the needs-based principle of NZ Super he had championed earlier, the very well prepared second OHRP lawyer, Greg Robins, asked if there was any question about assets in the NZ Super application form, whether the person needed NZ Super or if a person enjoyed a basic standard of living. - Of course not.

He also tabled papers the Ombudsman had addressed to MSD and to the Social Security Appeal Authority (SSAA) in 1972 already – and this was mainly about the Direct Deduction Policy in general. 

People with overseas pensions "levelled down and cut down to size"

There it reads that the policy discriminates “against pensioners and not against persons in receipt of private means”, that it was a “levelling-down to the same position of a lifelong New Zealander”, that he could “not find any principle in legislation that any pension they bring to New Zealand should be cut down to size”, and that he was “not certain if our social security requires such a cut-down to size of people who happen to come here, bringing with them benefits from overseas to which they are fully entitled, and which in many cases they have most honourably earned”.

According to the papers the Ombudsman recommended an amendment to Section 70 but didn’t go further because it was outside his responsibility.

Interestingly enough, in February 2007 MSD themselves suggested to the Minister to amend the legislation and stop the spousal deduction. It said this would benefit 150 couples (and 588 now, as of Oct. 2017 ) and have minimal fiscal impact, then costing about NZ$ 1.5 million a year. 

"Arbitrary elements" and "inequitable aspects"

Other high-level conclusions were that the treatment of overseas pensions had arbitrary elements, particularly the spousal issue, and that the inequitable aspects should be removed. Which was all about the Spousal Provision. Then-Minister Ruth Dyson was quoted as saying that this would not be a fundamental change and that the removal of Spousal Provision would even “improve current policies”.

How the Labour government did not secure the funding of peanuts in the 2008 Budget defies belief. That nothing changed after Labour’s loss in the General Election – we all know in what a nasty way National under John Key ruled out any policy change – was hard to swallow. 

But to explain it, as Alex McK. did, with the global financial crisis and even with the Canterbury earthquakes (the first one happened in September 2010 and the big bang in February 2011) was more than just a little strange.

The ridiculous cost of the policy's administration

While the minimal cost – currently about NZ$ 2.7 million – was mentioned several times, OHRP lawyer Greg Robins once and for all listed the ridiculous administration cost of the spousal deduction and going through the complaints process, and he didn’t even include people involving the Ombudsman and the permanent need to answer the daily complaints and letters of pensioners:

- “Encourage” pensioners to apply for their overseas pensions

- Establish if someone has entered a relationship with someone who might receive an overseas pension

- Establish if an overseas pension is deductible

- Review of the decision

- Benefits Review Committee (BRC)

- Social Security Appeal Authority (SSAA)

- Check out changes of the exchange rate

- Write and send regular statements to affected pensioners

When the "unit of assessment" transforms individuals into "economic units"

If you had thought McK.’s lengthy tales were hard to bear, well, he was outperformed by his MSD colleague Bede H. who has been working for MSD since 2003 and as an advisor in the CEO’s office for 14 months. He spoke for hours on end about the “unit of assessment” that is used to transform two individuals into an “economic unit” – which then allows MSD to deduct the “excess” of one partner’s overseas pension from the New Zealand partner’s NZ Super. “It is a long-standing and well-established approach”, he said proudly.

He listed every single available benefit in New Zealand since 1898 and, as Alex McK. and Paul Rishworth, repeated that “NZ Super falls within the major benefits but is not income- and asset-tested – unless an overseas pension is included”. So what is it? Income- and asset-tested or not? A social welfare benefit or an entitlement? “Providing a basic standard” and giving “financial assistance”, he said – so why is it paid to millionaires? (Yes, I know, I am also repeating myself…)

It was B.H. who went back to the Maori hapu. We watched and listened in disbelief, B.H. talking about disability support, education and accommodation supplement and how many shillings were paid for which need in the early 1900s, that “married couples achieve economies of greater scale”, that “Maori and Pacific Islanders are disadvantaged because they live in larger family units”.

He said that it was all about the “core family” and that this family approach should “remain until women have the same income as men”. The wife as the eternal dependant. (Let’s just remind him that in Malcolm Larsen’s case it is the woman who brings in most the money in the shape of her overseas pension.)

An attempt to fool the Tribunal

What a transparent attempt to fool the Tribunal, mixing up all these benefits that – with the exception of NZ Superannuation – are means-tested with every right because they are social welfare benefits while NZ Super is an individual entitlement to every person in New Zealand who has lived here for ten years between age 20 and 65, five of which after age 50. If this is too generous is a totally different story.

But what if these MSD bureaucrats really believe what they are saying? In this case they have no idea about the distinguishing factors of employer/employee-funded pensions, universal pensions and social welfare benefits. Can’t they read their own New Zealand Superannuation and Retirement Income Act 2001 (http://legislation.govt.nz/act/public/2001/0084/117.0/DLM113986.html) which says that NZ Super is universal and not a core-family benefit: “Every person is entitled…”

But the Tribunal didn’t interrupt Bede H. and tell him that he was trying to fool them. While we and other observers thought his ramblings were an insult to the court, the Bench listened intently; not sure if they were impressed, mesmerised or confused. 

But the “core family” and “economic unit” theme carried on throughout the following days, and the Chairman who had been extremely polite, friendly and patient for a long time, seemed to lose his patience with the OHRP Director who at some point added “marital status” to “family status” to the grounds of discrimination, only to announce he might exclude it again and then perhaps re-include it. This was quite unfortunate.

A classic example of the Tall Poppy Syndrome

Later on, in the closing statements, the Crown tried to convince the Tribunal that no-one could complain about the deductions because with or without deductions all couples in New Zealand had the same amount of pension money: “Both couples have the same amount. The same amount flows into each of the households, just from different sources.” 

This is because – as the Ombudsman had said many years before, see above – the pensioners with overseas pensions are cut down to size. A classic example of the Tall Poppy Syndrome New Zealand is famous for. This way couples are compared – in technical terms the couple becomes the comparator - and not the individuals, despite the fact that NZ Super is an individual entitlement.

An important point was the resulting interdependence of a couple (where often both work before retirement) because suddenly one partner financially depends on the income of the partner with the overseas pension, taking away their independence.

Donna La Fauci, one of the plaintiffs, said she cannot even arrange a birthday surprise for her American husband because after the deductions they live on her husband’s US pension, all the money goes into the joint account and he can see all withdrawals or bank transfers she makes. She has worked all her life, is a ferociously independent woman, she met Mike late in life, and now feels she needs to ask him if she could have some pocket money.

The state robs individuals of their financial independence

Paul Rishworth pushed all this aside with his soft voice, nearly praising the Government for giving these couples the freedom to sort out their relationships themselves. “It is not possible for the state to reign into their relationship”, he said, “it does not force the couple how to arrange their finances. The state cannot move money from one account to the other. Their sense of grievance is not justified.” 

But, of course, the state can transfer NZ Super into each individual’s bank account because it is an individual entitlement – unless an overseas pension is involved – and create the opportunity for partners to remain financially independent, even if they then decide to put the money into a joint account. By applying the direct deductions even the possibility is eliminated.

The whole drivel became cringeworthy when Rishworth – instead of admitting that the policy is well and truly outdated - justified the deductions with the fact that the policy “goes back to 1938 and earlier” and to 1898: “It is a long-standing parliamentary matter, confirmed over and over again by Parliament, woven into the social security system.” All this with MSD noting already in their 2005 Review that “the OECD estimates that the average life of a pension system is 15 years”.

A pension law from 1938 in a world of mobility and globalisation

It was nearly funny when the Tribunal’s Chairman harshly interrupted Robert Kee in his final reply when the OHRP Director quoted from an Employment Taskforce paper from 1994. 

This paper said that women needed the opportunity and choice to have financial sources of their own, that they should not be reduced to core family entitlement, that non-earning wives of wealthy husbands didn’t have control over funds, no access to adequate resources, and this would lead to dependence and disparity of sharing. “The converse could be true for men”, said the OHRP lawyer. But the Judge discounted the paper, saying: “This was written 24 years ago. The world moves on.”

This is obviously only an argument when it is needed to diminish the evidence of one party – as obviously it is perfectly fine to apply a law from 1938 eighty years later in a world of mobility and globalisation. I could have screamed from laughing, had it not been such a sad indicator of things not going well for the OHRP and the plaintiffs. 

Mutual support and interdependence

The Chairman – who gave the impression of having enough of the over-and-over repetition of the same arguments and the hearing heading towards a seventh day – seemed to have taken sides when he asked the OHRC boss: “What is the reason for being together in a relationship other than mutual support?” This implied to this observer that it was justified to treat some individuals as part of an economic unit and others as individuals.

Another quote which pointed to the Chairman accepting MSD’s argumentation: “If the Government pays the money it has no control over it where it goes to.” But it could.

Or, when the OHRP lawyer said: “A relationship needs a degree of autonomy, otherwise there would be a high risk of power imbalance”, the Chairman countered: “Where do you take from that the state has to ensure that each individual has autonomy in a relationship? It is not about what people feel but what the state has to deliver.”

"The state delivers individually and then takes it away again"

Here the plaintiffs’ side had a very good reply and summed up the “world of absurdity” (Malcom Larsen) MSD has created with Section 70 and particularly the spousal deduction. “The state delivers individually and then takes it away again”, he said, “it is interfering with the equal distribution within the relationship.” 

He pointed to the big issue of family violence in New Zealand which “is an indicator for what can happen if there is a lack of financial independence”, as the dependent individual becomes more vulnerable and might have to stay with an abuser. This highlighted the “importance of financial independence within a relationship”.

However, after all these days at the Tribunal, we are hopeful but don’t expect miracles. The miracle of any court in New Zealand finding anything wrong with the legislation. But we would be pleasantly surprised if finally some court stated that Section 70 is legalised misappropriation of funds and discrimination.

The safest way to achieve justice is to convince politicians that a law change is needed and that social policies should not be anti-social towards a minority. Time to remind Prime Minister Jacinda Ardern of her principled support in 2012 and 2015 while in Opposition. Or does she follow the example of so many of her predecessors, with the promises of today becoming the lies of tomorrow?









Entrance to the Human Rights
Review Tribunal on Customhouse Quay in Wellington.

The decision:
Human Rights judges living on a different planet

Naming or not
We have decided to not name the two expert witnesses of the Ministry of Social Development (MSD) because MSD employees are sometimes subjected to abuse, and it doesn't help the cause. We have used initials instead.

However, not naming the lawyers and plaintiffs wouldn't make sense because the New Zealand Herald reported about the hearing several times, and everyone can google the articles and find the names.

588 couples affected
The number of pensioners affected by the Spousal Provision/Deduction was 588 in October 2017. The deductions save the New Zealand government about NZ$ 2.7 annually. 

Victims' Statements
You find the edited statements of evidence in the Victims section on this website:
Jan McKeogh: click here
Malcolm Larsen: click here
Donna La Fauci: click here

The Hearing in the Media
Only the New Zealand Herald followed the invitation to attend the hearing, this is the sad state and interest of the media in New Zealand on this topic. TVNZ called and asked some questions but then refrained from further contact and reporting.

Links to the NZ Herald articles:
Pensioners challenge 'evil' NZ super deductions at Human Rights Review Tribunal

Pensioners discriminated against because of who they are married to, lawyer tells super deductions case

After the hearing:
Kids' benefits deducted from stepfather's pension under 'disgusting' policy

Observations at the HRRT
The atmosphere is a bit more casual than in other courts, with the Tribunal's members appearing in suit and dresses, not in robes, as are the lawyers representing the plaintiffs and defendant, and they do not wear wigs.

The opposing lawyers refer to each other as "friend". When replying to the other lawyer, they say: "What my friend has just said..." 

The Tribunal's Chairman was very accommodating to the plaintiffs and the public, allowing them to move to the tables behind the lawyers, so they could follow the proceedings better.

While witnesses were required to speak into microphones, Tribunal and lawyers didn't use microphones, therefore some of the things they said were hard to understand - and this is not about the content...

The hearing went on for six and half days, every day from 10am to 1pm and 2pm to 5pm.

The HRRT on the internet

Links to interesting articles on the HRRT in general:

Human rights law change ‘repugnant’

'Access to justice is being denied to almost all': Human Rights Review Tribunal chairman Rodger Haines

Huge delays at Human Rights Tribunal as cases pile up

Chairman's letter to Justice Minister Andrew Little, as reported in the NZ Herald on 11.04.2018:

The Guardian, referring to the article in the NZ Herald:
New Zealand's human rights tribunal 'breaching human rights' due to delays
Tribunal’s chairman says system is on the brink of collapse and failing the most vulnerable because of an increase in cases