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The Offenders


Fairness is only a word
 
Take the current Government, take the former Labour Government, it does not matter. They treat immigrants and returning Kiwis like parasites for demanding their share of NZ Super for their contributions to the New Zealand tax base and society.
 
The only difference has been the acknowledgement of the Labour Government under Prime Minister Helen Clark that Spousal Provision should be abolished because this would have stopped Kiwis who have stayed and worked in New Zealand all their lives from being denied NZ Super. But they did not go as far as to change the law because - surprise, surprise - this would have cost money.
 
(And remember: if we speak of the Government's money it is not their money or even a gift they would offer you. It is money gained from taxes from you and those retirees who in the end do not get a cent out of it.)
 
They did not, as Social Development Minister Ruth Dyson let us know, find any money for it in the Budget 2008. Then Labour was voted out of government, and things got even worse for superannuitants affected by the Direct Deduction and Spousal Provision policies. This applies to the economy and the attitude of the politicians in power as well.
 
Conclusion number one:
 
Justice is only done when the coffers are full - if at all.
 
The way politicians justify why justice is not done is cynical. The Prime Ministers, the Ministers for Social Development and Employment and, more recently, the Minister for Senior Citizens exposed themselves as bludgers by overusing the words "fair", "fairness", "egalitarian" and "equity".
 
New Zealanders are conditioned to these words and have an allergic reaction to anyone who asks for more, and the Government feeds this feeling by claiming that the Direct Deduction Policy and Spousal Provision are "fair to most New Zealanders". In their view, this means: the demand to abolish Section 70 of the Social Security Act is not fair because this would advantage a greedy few and, on top of it all, it would bankrupt the country. So it is in everybody's interest to keep the status quo and discredit this unreasonable minority as before.
 
Because, and this is conclusion number two:
 
Who cares about a minority?
 
Our answer is: because this would be the appropriate reaction of a fair and mature society that does not fall for cheap political slogans.
 
Yet the Government does not even make an attempt to acknowledge that it would be fair to leave immigrants' and returning Kiwis' overseas pensions untouched. It would be fair because:
1. they are not full pensions (except for Tier 1 pensions which are the only ones comparable to NZ Super but are a rarity) and
2. those people have paid for their overseas entitlements on top of their income taxes in those overseas countries - something nobody in New Zealand has ever had to do. 
 
A cheap political slogan: No-one should be better off...
 
Yes, some immigrants and returning Kiwis would be what the Government calls "better off". This makes the average Kiwi furious. Why should someone get more money?
 
Think again. It is more because these people had to pay compulsory contributions in order to receive the money at old age, and the money comes from other countries. No New Zealander who has stayed here all his life has to pay a cent for overseas pensions being paid to people living in New Zealand. Most overseas pensions are like saving schemes, administered by insurance companies or agencies and not even a foreign government, and they become due when those people who have contributed retire. New Zealanders can - if they want - save all this money and put it into a bank account, and invest it into shares, funds or property, to be better off at old age, too.
 
People who have not contributed to a foreign pension scheme do not get a cent out of it. Unlike in New Zealand where everybody over the age of 65 receives NZ Super provided he or she has resided here at least ten years since age 20, and five of those after age 50 - except those affected by Section 70, of course.
 
Foreign states pay benefits to top up insufficient pensions
 
And, here is another fact the New Zealand government does not represent truthfully: nobody in those foreign countries who receives no or only a small pension descends into poverty. Most states like Germany (and therefore the taxpayer) top up tiny pensions by a benefit, so everybody can live above the poverty line.
 
Those benefits are paid to people who have no realisable assets. Applicants are means-tested and their entire financial situation examined. This includes a house and other property, not just cash and money in a bank account. The benefit is topped up by supplements for accommodation, heating and health insurance. This, by the way, is similar to NZ Super, rather than a Tier 2 contributory pension.
 
Subsequent New Zealand governments have identified inequities (like in the 2005 Review of Superannuation and Retirement Policies, and the 2007 report based on this first Review) but have chosen not to follow up on them, with the exception of Labour suggesting to scrap Spousal Provision, as mentioned above.
 
The explanation is that the existing policy has "worked reasonably well" and is "fair to most New Zealanders". They repeat it over and over again; everybody has been using these precedents since they were first published in the 2005 Review. There is no difference between Labour and National - because the Ministry of Social Development's "Mandarins" have been writing the reviews and subsequent letters.
 
The policy that "works reasonably well"
 
Of course, Section 70 works reasonably well. The people in the WINZ offices who deal with applications for NZ Super only have to ask the applicants if they receive a foreign pension or if their partner/spouse does. Then they deduct this overseas pension from NZ Super. 
 
By deducting overseas pensions from NZ Super WINZ achieve miraculous calculations:

If a single person receives a 40% portion of an overseas pension because he or she has only worked 40% of his or her working life in that country, it is nevertheless considered a full pension by WINZ and deducted as a 100% pension payment from 100% NZ Super.
 
If a person is married to a New Zealander who would receive 100% NZ Super in his or her own right, his or her partner’s 40% pension from overseas is abated against the full couple rate of NZ Super. This means: one person’s 40% pension from overseas is deducted from two single-person NZ Super rates, each one equivalent to 100% NZ Super, so 200% worth of NZ Super. By wrongly weighting the percentage values of two pension entitlements, the dollar values arrived at through subtraction are truly wondrous. This is a prime example of wrong-headed logic and twisted arithmetic.
 
Twisted ideas of generosity
 
If the deduction leaves the couple with a nominal minus, WINZ top up the negative balance by the dollar amount needed to leave the couple no worse off than a pure Kiwi couple. This gesture is considered generous - and this leads the NZ government to believe that its superannuation provisions are generous. However, in fact the New Zealand taxpayer pays only a fraction of one full NZ Super to two people, if anything at all.
 
If the 40% overseas part-pension is higher than two full NZ Supers, the couple are allowed to keep the excess amount. This again is considered generous - as there is no existing law that would allow the Government to confiscate this foreign money.
 
The fact that overseas pensions, even apportionate pensions, from a range of countries are higher than NZ Super is easy to understand: if you earn a high income and make high contributions to your superannuation scheme you get more out of it than the relatively modest rate of NZ Super - because no-one has ever paid directly into it.  
 

The New Zealand government denies many Kiwis NZ Super.



Fair contributions
 
The NZ government argues that it is "fair to most New Zealanders" that overseas pensions are deducted from NZ Super. And it says that NZ Super should only be paid to people who have contributed to the NZ tax base and NZ society.


 
On 28 March 2010 the Sunday Stars Times reported on figures from the Ministry of Social Development:
 
"The ministry says the longest serving recipient of the unemployment benefit is a man in his 60s who has been on the dole for 23 years. He lives in a remote area and will qualify for superannuation later this year."
 
In the same article it was reported that "a single mother has been receiving welfare payments for 36 years". The woman in her 50s has had dependent children in her care throughout the period. Her total weekly benefit is NZ$ 500 to 580. The value over 36 years would approach NZ$ 1 million.
 
The woman will be eligible for NZ Super.